In my franchise consulting work, I often place clients in the in-home senior care field. If it is the right fit, a candidate can do very well and build a business with great long-term potential. There are currently 36 million people in the US over the age of 65 and this number will nearly double over the next twenty years as the Boomer generation ages. This is the fastest growing segment of the population and 80% of seniors prefer to stay at home even if they require assistance. This is causing an enormous growth in senior-related services, which now includes over 7 million people who receive in-home care, according to the American Association of Homes and Services for the Aging. As the elderly population climbs, families are relying more and more on in-home care for help. These services provide the elderly or infirm with assistance in their daily lives, including nonmedical duties such as companionship, bathing, cooking, light housework, running errands and even dispensing medication, to skilled nursing care.
The number of people requiring care will double within fifteen years. This is a huge domestic market. We won’t be outsourcing our senior population to China and a worker in Bangkok cannot give an elderly person in Cleveland a sponge bath. If Mom needs help, the kids will come up with the money to pay for care, even if that means cutting spending elsewhere, so the demand for this service is relatively inelastic. How many other industries will have that kind of growth curve? Not many. Long-term care in a nursing home ranges from $110 to $210 per day or $40,000 to $75,000 per year. By contrast, the cost of in-home care senior care averages $20,000 to $35,000 per year. That is a +50% savings for seniors who prefer to stay at home. They pay out of pocket or use long-term care insurance to pay for in-home care, though some with lower incomes qualify for help from Medicaid. Private home care costs an average of $18 per hour nationwide
There are currently over 11,000 licensed home-care businesses and in-home aids or care givers are one of the fastest-growing job categories, with the number of caregivers growing from 750,000 to 1.2 million by 2020. The “mom and pop” business model has dominated home care, but this is rapidly changing as franchises become more common. Home-care and other service-based franchises are very attractive to entrepreneurs because both the start up capital required and the on-going operational costs are much lower than “brick-and-mortar” retail franchises, such as restaurants. Two reasons why in-home care works as a franchise are technology and training. Though the product may be a service involving assistance and compassion, franchise owners (franchisees) rely heavily on systematic training programs and software products that ensure all units are operated in a standard, proven manner. Fundamentally senior care relies on tools very similar to those at the Neighborhood McDonalds. The earning potential for these businesses is high, with many franchisees earning six figures after several years of operation. Re-sale values in the years ahead should also be high, given the enormous size of the market 15-20 years form now.
Franchisers are responding to the demand for senior services and the appeal of the business model to would-be entrepreneurs. . Between 2002 and 2007, the number of in-home health-care franchise units in operation more than tripled to 3,400 from fewer than 1,000. At the same time, the overall number of franchise concepts increased by about 20%. In-home senior care is now one of the top business models in the franchising and it should remain so for many years.
Jack Kuykendall www.Franchiseguidepost.com Office 909 980 0698 E-Mail: JackKuykendall@msn.com