Updated and reposted from March 2019.

You’re thinking of opening your own adult care home for seniors and individuals with disabilities. Congratulations! This is an exciting decision. Maybe you’ve worked as a caregiver for several years in an adult care home, assisted living facility, nursing facility, or as an in-home caregiver. Perhaps you've worked as a nurse and would like to take it to the next level and be your own boss.

You’ve now decided you’d like to take the next step and become an adult care home provider with your name listed on the license. You most likely feel passionate about caring for seniors and individuals living with disabilities. This is great, though this is not a decision to be made lightly. Owning your own adult care home business and being a caregiver for someone else are two very different experiences with their own unique challenges and benefits. 

When I started my own business in 2018, I had a vague idea of the level of commitment it would take, but in retrospect, I really had no idea. I consistently work more than I've ever worked before in my life. I haven't taken a true vacation in four years, and I regularly work 12-14 hours per day and work at least six days per week. Like most small business owners, I work a lot, but I also recognize I have the luxury of having some down time because I'm not caring for others. I've heard this same feedback from new providers, as well. They didn't realize how much time owning their own business would take, especially a business where you're providing 24/7 care to other people. ​

​Frankly, running a small business is not for everyone. Sometimes the best advice I can give someone is to consider a different path. Often, providers mention they spend a lot of time on business management, rather than solely direct caregiving. If you simply love being a caregiver, you might want to consider remaining a caregiver and working for someone else, but working in a capacity with more responsibility, rather than owning your own business. If you have management and leadership skills, you're highly organized, have strong ethics, and you're business-minded while also passionate about high-quality care, then owing a care home business might be the right move for you. It's an added benefit to have prior experience running a small business.

By Guest Author Yohannes Zewudie with Yohannes Tax & Accounting

The Oregon Department of Human Services identifies adult foster care home licensees as independent business owners. Owners, who are responsible for Adult Foster Home (AFH) businesses are usually expected to wear so many hats to discharge their responsibilities and achieve their company’s vision. Trust and relationships created with owner(s), customers, employees, government (federal & state) agencies and the society determine the success of businesses.
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Small businesses, including adult foster homes, deserve the opportunity to be successful in their line of business. Regardless of the business size, accounting as a profession plays a significant role in creating a conducive environment for success. It is with this in mind that I argue small businesses should consider having an accountant if not a certified public accountant (CPA) to achieve their ultimate goal. 

1. Effective and Efficient Business Management

​Businesses need historical, current and projected financial information to make the right decision in their business. Without complete and accurate financial recordkeeping and reporting, a small business owner cannot say for sure the true profitability of his/her business. Small businesses that tend to measure their profitability and success based on available cash flow or bank balance are only looking at one criterion. Business owners who rely on incomplete or wrong information usually make decisions that impact their business negatively.  
 
Accounting, as a support function to owners, is tasked with recording business financial data, analyzing them and generating timely and reliable financial reports to show the true picture of business status and profitability. It is for this reason that small businesses need accountant who can assist them in running and evaluating their business.  

2. Peace of Mind

In the ever increasing federal and state regulatory environment, small businesses are required to comply with various tax laws and regulations. Among other, businesses including AFHs have to report:  

• Federal Payroll & Income Taxes
  • Social Security and Medicare Taxes (FICA taxes)
  • Federal Unemployment Insurance Taxes (FUTA)
  • Federal Income Taxes
• State Payroll & Income Taxes
  • State Payroll Taxes
  • Transit taxes (Tri-County Metropolitan Transit District (TriMet) and Lane Transit District (LTD)
  • Employment Taxes (State Unemployment Insurance or SUTA):
  • Workers’ Benefit Fund Assessment (WBF)
  • Workers’ Compensation Insurance
• Local and City taxes
• Periodic Payroll Reporting
• W-2, W-3, 1099 and other annual reporting

​Many AFHs are not well-equipped to meet these and other regulatory and compliance requirements. Having an accountant who properly handles these mandatory compliance requirements gives AFH owners peace of mind for them to focus on other important business matters. 

3. Ease of  Annual Business and Personal Income Tax Reporting

The United State Internal Revenue Service (IRS) and the State of Oregon expect taxpayers to:

• File a timely return;
• Make accurate reporting; and
• Pay the required tax amount by the due date. 

Small businesses and their owners face challenges in compiling the necessary business records during tax season. Without a good recordkeeping and tracking method, it is daunting for small businesses to fully meet the tax reporting requirement.

Lack of proper accounting system could result in understated business income and/or deductions that may result in higher taxes, interest and penalties.  If the owner or business deliberately attempt to evade taxes or willfully fails to file or pay taxes, they could be subjected to criminal tax fraud cases.
 
AFH owners can ease the stress associated to tax return filing by hiring an accountant who:

• Maintains proper financial recordkeeping throughout the year;
• Maintains proper classification of taxable income and non-taxable income;
• Claims all available and qualifying business deductions;
• Files annual & quarterly tax returns in a timely manner; and
• Pays timely quarterly estimated payments.

4. Utilize Available Business and Financing Opportunities

More than large and medium businesses, small businesses tend to miss out on available business and financing opportunities due to lack of information or poor financial recordkeeping. The missed opportunity to utilize the Small Business Administration Paycheck Protection Program (PPP) is a very good example. Significant number of small businesses failed to utilize federally available PPP. An accountant comes handy to assist small businesses to have the necessary records and enable them seize these available business and financing opportunities.

5. Quality of Life

AFH owners assume so many duties and responsibilities (manager, receptionist, purchaser, accountant, janitor and many others) in a single day to be successful. Since AFH owners are not expected to be knowledgeable or proficient in every task, they might have to work more than 12 hours a day to accomplish all these tasks. These business burdens make the owners unhappy and inefficient. The opportunity cost of spending too much time at work may also negatively impact their health, family dynamics and other social life.
 
An accountant can shoulder one burden and perform the accounting-related duties in the right way. Delegating the accounting tasks to the right professional would result in the following:

• Improved quality of work.
• Standardized financial reporting.
• Reduced owner work-related stress.
• Increased owner productivity and job satisfaction
• Potential long term cost reduction.

6. Financial Consultation

​Based on available company financial data and their business environment, a certified public accountant can provide knowledge-based financial consultation to AFH businesses. These consultations could have a significant impact on tax savings and business growth.

7. Representation in Federal and State Audits

In case of federal or state audits, a CPA can represent an AFH to handle their audit. Unlike an accountant, which is limited to the return prepared by him/her, a CPA can represent any business in federal or state audits. 

"While all CPAs are accountants, not all accountants are CPAs”. A CPA is an accountant that passed the rigorous testing and strict licensing requirement to practice in the state. CPAs are expected to abide by the code of ethics and must update themselves by taking the required continuing educations every year.

​The benefits listed above are not an exhaustive list as to why adult foster care homes need an accountant, if not a CPA. It is always advisable for small businesses to reach out to professionals and seek advice on how they can achieve their ultimate business goals.

Article by Alyssa Elting McGuire, MA, MPA

I was recently sitting in a class on the topic of website marketing offered through the Small Business Development Center, and I started thinking to myself, “why do so many adult care home businesses not have websites?” I’ll be the first to admit I’m no marketing expert, but I can say I recognize the value of a small business having an online presence.

Why, as an adult care home provider, should you invest the time and money into having a website or an alternative web presence for your adult care home business? I’d like to give you seven reasons why you need an online presence that showcases you and your adult care home.
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• It’s part of your overall marketing plan. This is your passion, but it is also your business. You need a marketing plan, and you can’t ignore the fact an online presence can be an important marketing tool.
• Families are looking online for housing options for their loved ones. A business website probably won’t come up first on search engines, but you can make your presence known by using services such as Laria Care Finder where people can find detailed information about your home. Additionally, you can create a Google My Business account to be found through Google and on Google Maps. Also, Google My Business allows you to create a free basic website for your business.
• It lends you some credibility. In this day-and-age, if nobody can find your business online, they can become a bit skeptical about your business. This is also true if they visit your website, and it’s obvious you haven’t updated it since 2005.
• You have control over the content. You can post beautiful pictures of the inside and outside of your home, and offer any details that might be of interest to people looking to move to your adult care home.
• It gives people a personal connection to you, as a caregiver. Post photos of yourself and give information about your approach to providing care, and why you chose to go into this business.
• It gives you a forum to post client testimonials. Let people know about the great care you provide by posting client and family testimonials (while always keeping confidentiality in mind).
• Make it easy for people to find you. You want to make it as easy as possible for people to find information about your care home and your contact information.