Aging Americans require more and more services--are you tuned in to their needs? A senior-care franchise could be your big break in this growing industry.
For many seniors, the golden years represent a period ofrelaxation--a breath of fresh air after a lifetime of work andresponsibility. For today's entrepreneurs, meanwhile, thegolden years also mean a golden opportunity. Visible on the horizonis an unprecedented demand for senior care, as the first wave ofbaby boomers turns 65 in 2010. Born between 1946 and 1964, thisunique market will soon push the number of Americans ages 65 andolder to 39 million. And as America grays, the senior-carefranchise industry is gaining new life.
In the next 30 years, the number of people 65 and older isexpected to double, and the number of people over age 85 willtriple, according to James Firman, president and CEO of The National Council on theAging, a nonprofit advocacy organization dedicated to improvingthe health and independence of seniors. "There will be a hugeexpansion in the need for services to help people stay at home orin whatever facilities they're in," he says. Thesenior-care industry will "definitely be a major growthindustry."
And growth in the demand for senior care should stay vital for awhile--seniors aren't just increasing in numbers, they'realso living longer. According to the U.S. Census Bureau, theaverage life expectancy in 2000 was 74 years for men and almost 80for women, compared to 66 years for men and 72 for women in1950.
The true impact of the aging of the baby boomers won't befelt for several years. Yet, due to Americans' changinglifestyles, senior-care franchises already have their hands full.Seniors are depending less on their families and more on outsideresources to receive the help they need. ComfortKeepers and Home Instead Senior Care, which each operate more than400 locations nationwide, are just two examples of franchises thatoffer the elderly nonmedical services such as companionship, mealpreparation and transportation. Comfort Keepers reported franchisegrowth of 17 percent in 2003; meanwhile, Home Instead's totalnumber of franchises grew by 24 percent.
The America that existed a century ago is not the same as theAmerica of today for seniors, due to economic issues, mobility andpeople choosing to have children later in life. Traditional familystructures have changed dramatically. According to the Bureau ofLabor Statistics, there were almost 29 million married, dual-incomecouples in 2002. These numbers have generally been on the risesince the federal government started tracking them a decade ago.For seniors, this means less help from family members who are busyworking. "Most care providers of this type of service are thefamily members themselves," says Jerry Clum, who co-foundedComfort Keepers with his wife, Kris, in 1998. And, says Jerry, thedual-income trend is "placing a great deal of stress anddifficulty on these families."
Another trend that's increasing the need for senior care isthe mobility of Americans. Education and careers often lure theyounger generation away from their parents. "Family membersaren't as near to each other as they used to be," saysJerry.
Another factor affecting care for elderly relatives is that manybaby boomers have in fact waited longer to have children, saysFirman. Consequently, a new generation has emerged, known as the"sandwich generation." "In the typical Americanfamily, people in the 40 to 55 age range have children and theelderly to take care of at the same time," says Paul Hogan,who founded Home Instead Senior Care with his wife, Lori, in 1994."That's causing a strain."
Getting Down to Basics
As American families become less interconnected andinterdependent, their primary challenge is providing the basicsnecessary to keep their elderly relatives at home."Eighty-eight percent of [seniors] say they want to stay athome as long as possible," says Firman. As long as they haveaccess to basic services, home also tends to be where the elderlyare healthiest and lead the highest quality of life.
Paul Hogan witnessed this firsthand when his 88-year-oldgrandmother, who was living alone, became so weak she couldn'tmove from her chair to her bed. She was not expected to live to theend of the year. Paul's mother started providing basicnonmedical care, and his grandmother lived 11 more years, almostreaching 100 before passing away. "I saw firsthand what basicservices, such as companionship, meal preparation, lighthousekeeping, errands, incidental transportation and medicationreminders, can do for the elderly," he says. "Thosethings have a very powerful effect on an elderly person."
Senior-care franchises are being called upon to provide thesebasic necessities. Companies like Home Instead and Comfort Keepershave noticed that companionship, the most basic of services, isoverwhelmingly in demand. Paul says companionship accounts forabout 75 percent of what Home Instead provides. Jerry Clum hasnoticed the same need among the 8,000 clients Comfort Keepersserves. "On a national basis, companionship is the number-oneservice," he says. "About 40 percent of the hours that webill out nationally are for companionship." Following closelybehind, says Jerry, is a demand for housekeeping, meal preparationand transportation.
A Ripe Opportunity
Jim Woolford was one of 91 franchisees to open a Comfort Keepersin 2003. He and his wife, Pamela, were inspired after searching forin-home care agencies to provide help for his mother. Through theirresearch, they discovered a lack of quality agencies in their homestate of Washington. "We felt there was a lot of need for itout here and a lot of potential, and we were right," says Jim,46.
Starting the franchise in February 2003 with $32,000, Jim ranpart of the office out of his home and the other part from anexecutive suite. A retired naval officer, he had no previousfranchise or in-home care experience; but with hard work andsupport from some of the other Comfort Keepers franchisees, he gotit off the ground. A key piece of advice came from the corporateoffices: Hire adequate staff to allow for growth. In the beginning,he was trying to do all the work himself. "Once we [brought onadditional staff], it relieved me of administrativeresponsibilities, and it allowed me to do more marketing and[meeting] with the agencies that provide care for the seniors inour industry," he says. "Since then, it has just beenreally busy. It's been exploding." Currently, he servesapproximately 40 clients and employs 55 caregivers, although thenumbers change constantly. Jim offers his own advice: Bepassionate. "[Potential clients] have to see in your eyes andhear in your voice that you are there to take care of mom anddad," he says.
Jim focuses on reaching 55- to 60-year-old baby boomers whoseschedules don't allow them to take care of parents in their80s. And even with 55 employees, he continues to invest a lot ofhis time and money in the franchise. Eighty-hour workweeksaren't abnormal, and even now, Jim says, he has about $75,000tied up in the franchise.
But the payoff is worth it. The Woolfords' 2003 salestotaled $325,000, and Jim projects 2004 sales at $1.1 million. Morethan just the financial payoff, the emotional rewards are whattruly get him through each day. "When we have the opportunityto bring [clients] home from rehab or a nursing home, and when theywalk in the house and their faces light up, it's like thankyou, thank you, thank you," says Jim. "What's thatworth? It's great."
On the Horizon
As the needs of seniors change, so do the services offered bysenior-care franchises. For more than a year, the Clums have beenworking with their individual franchisees to obtain state licensesfor additional services such as bathing and feeding. Futureprojects may include introducing electronic devices to help trackand locate Alzheimer's patients who wander away from home.
The Internet enables franchisees to better serve seniors byhelping them stay connected and access information. In the future,Jerry Clum is considering equipping Comfort Keepers caregivers withlaptops so they can give clients the option of using the Internetfor recreation or learning. "We think [the Internet] is anincredibly cost-effective way to deliver really sophisticatedinformation to people," says Firman, with The National Councilon the Aging, which has created a Web site thatexplains federal and state assistance programs for olderAmericans.
As seniors enter a new phase of life, the senior-care franchiseindustry keeps pace. "Right now, we're serving a segmentof the population that is very independent," says Paul Hogan."They remember the Depression, the World Wars. They are veryself-reliant. [The younger seniors], the 60-year-olds, are so muchmore used to services that when they move into this age of needingcare, they'll be more readily accepting of services." Theseniors of tomorrow will be looking for providers who are moreservice-oriented, and they will be quicker to seek help.
They will also be less financially prepared to pay for in-homecare. According to a demographic profile of baby boomers compiledin 2003 by MetLife's Mature Market Institute, younger boomersspend 10 percent below average on life insurance and don't seemas concerned about the future. However, the lack of financesdoesn't worry those in the senior-care industry. "Eventhough there may be some different financial challenges for theboomers," says Jerry, "we still feel that, when it comesto our services, it will be important enough to them that they will[find the resources] to help pay for them."
Firman predicts that in the next five years, elder care willreplace child care as the number-one family issue of the baby boomgeneration. Opportunities abound on the not-so-distant horizon.
"If you're going to do this, make the commitment bothpersonally and financially, and go and do it," says Jim."I'm here on the other end saying it's worthit."
|GOLDEN YEARS: If you'reinterested in starting a senior-care business, check out thefollowing franchises:|
(866) 731-2273/(520) 577-4825
ComForcare Senior Services Inc.
Griswold Special Care
Home InsteadSenior Care
(888) 484-5759/(402) 298-4466
Rightat Home Inc.
Sarah Adult Day Services Inc.
Superior Senior Care