Starting A New Care Business Must Be A Really Exciting Adventure
Starting a new care business should be an adventure and there will, no doubt, be challenging but familiar roads along the way, doing things where your previous experience has provided the expertise to do them better than the competition; designing person centred care packages; working with the CQC on registration and compliance; recruiting skilled and experienced care managers and care assistants; and delivering excellent care.
Some of this adventure will be in uncharted territory and the responsibilities that go hand in hand with running your own business, especially a new care business. For example corporate governance, employment and company law; compliance with unfamiliar business regulations and perhaps regular cash forecasting and management and meeting the consequent director’s responsibility for ensuring your new care business does not take on any liability or accept credit that it cannot repay; which at its worst can result in a director having personal liability or going to jail.
As a Chartered Accountant filling both Finance Director and CEO roles I have on, thankfully few, occasions had responsibility for managing the cash flows for businesses in circumstances where the consideration of cash forecasts; credit taken and staying the right side of corporate law; and then payment management was a twice daily event. This was almost all consuming for the businesses concerned and, whilst we tried to contain the operational impact, other company responsibilities such as customer service, quality, or operational effectiveness all took second place. Quite how a new care business, with all of the additional human pressure and care responsibility entailed, would manage in such circumstances I shudder to think.
In the first 5 years of life, the financial failure rate of UK businesses is almost 50%. Unfortunately, the failure rate for newly established care businesses is worse than the average and reaches more than 20% in the first 12 months and, whilst statistics are not available, the rate within domiciliary care businesses would seem to be higher.
Obviously with these market characteristics the collection of debts is one of our key performance indicators. We therefore also have a direct measure of company failures within our customer set. What is interesting is that from our experience of newly registered care businesses who are our customers the failure rate is c.4%. The conclusion we have drawn is that using PASS is a strong indication of a successful business not only in terms of the quality of care but also in the operational and financial control in that business.
Bruce Hiscock, CEO, everyLIFE Technologies