Running a home care business is about helping people, but it’s also about making sure your business stays healthy.
With the economy changing, taxes going up, and National Insurance rising, care business owners need to understand their numbers more than ever.
Let’s talk about something called the break-even point, and why it matters to your domiciliary care or live-in care agency.
🧮 What is the Break-Even Point?
The break-even point is the moment your business:
Makes enough money to cover all your costs, but no profit yet.
It’s the line between losing money and starting to make money.
Imagine you run a care agency. You pay for:
- Carer wages
- Office rent
- Care management software
- Training
- Insurance
- Petrol/travel
- Taxes and NIC
All of these are your costs.
You need to make enough from your care clients to pay all those bills.
That point, where income = costs – is your break-even.
👉 Why It’s More Important Than Ever
Right now, many home care businesses are feeling the pressure.
📈 Taxes are rising
💸 National Insurance contributions are higher
👩⚕️ Care staff wages are increasing
🚗 Fuel and travel costs are up
🛒 Suppliers are charging more
If you don’t know your break-even point, you might:
💷 Charge too little for your services
📉 Take on unprofitable care packages
👥 Over-hire or under-hire staff
🔻 Run into cash flow problems
That’s why financial control is just as important as delivering great care.
🧠 What Home Care Business Owners Should Do
Here’s how to stay on top of your care business finances:
Know Your Costs
Make a list of every monthly cost in your business. Include care staff wages (including travel time), office salaries, rent, NIC, pensions, software, training, and recruitment.
Work Out Your Break-Even
Ask your accountant, or use this simple idea:
Total Monthly Costs ÷ Average Hourly Profit = Break-Even Hours
This tells you how many care hours you need to sell just to break even.
Review Prices
If you’re not covering rising costs, you may need to adjust your care package rates. This isn’t being greedy, it’s protecting your service.
Track Weekly
Look at your income and costs every week. In home care, problems grow fast when left unchecked.
💬 Real Example (Simple Maths)
Let’s say your monthly costs (rent, office staff, training, systems, etc.) are £25,000.
You charge clients £25 per hour, and it costs you £20 per hour to deliver care (carer pay, NIC, travel, etc.).
That means you earn £5 gross margin per care hour.
To cover £25,000 in business costs:
£25,000 ÷ £5 = 5,000 care hours per month
So you need to deliver at least 5,000 care hours per month just to break even.
🧯 Don’t Wait for Trouble
Many home care agencies are running close to the edge and don’t even know it.
But with smart planning, you can:
- Stay ahead of rising costs
- Make sure every care package helps your business grow
- Keep paying your staff well
- Protect your business for the future
🧭 Final Tip
You can’t control the economy, tax changes, or fuel prices…
But you can control your numbers.
Knowing your break-even point is like having a map for your care business, so you don’t get lost, even when times are tough.
📞 Not Sure About Your Break-Even Point?
If you’re a home care business owner and you’re running on tight margins or you’re not sure what your break-even point is, then partnering with someone like us could be the best thing for your business.
We buy care businesses or take a share in them to help improve the way the business is run, especially the financial side.
We can:
- Work out your break-even point
- Improve your margins
- Help your business grow stronger, even in a tough economy
👉 Get in touch today by using the contact form below.
Let’s make sure your care business is built to last and succeed.