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For many seniors, the golden years represent a period of relaxation--a breath of fresh air after a lifetime of work and responsibility. For today's entrepreneurs, meanwhile, the golden years also mean a golden opportunity. Visible on the horizon is an unprecedented demand for senior care, as the first wave of baby boomers turns 65 in 2010. Born between 1946 and 1964, this unique market will soon push the number of Americans ages 65 and older to 39 million. And as America grays, the senior-care franchise industry is gaining new life.
In the next 30 years, the number of people 65 and older is expected to double, and the number of people over age 85 will triple, according to James Firman, president and CEO of The National Council on the Aging, a nonprofit advocacy organization dedicated to improving the health and independence of seniors. "There will be a huge expansion in the need for services to help people stay at home or in whatever facilities they're in," he says. The senior-care industry will "definitely be a major growth industry."
And growth in the demand for senior care should stay vital for a while--seniors aren't just increasing in numbers, they're also living longer. According to the U.S. Census Bureau, the average life expectancy in 2000 was 74 years for men and almost 80 for women, compared to 66 years for men and 72 for women in 1950.
The true impact of the aging of the baby boomers won't be felt for several years. Yet, due to Americans' changing lifestyles, senior-care franchises already have their hands full. Seniors are depending less on their families and more on outside resources to receive the help they need. Comfort Keepers and Home Instead Senior Care, which each operate more than 400 locations nationwide, are just two examples of franchises that offer the elderly nonmedical services such as companionship, meal preparation and transportation. Comfort Keepers reported franchise growth of 17 percent in 2003; meanwhile, Home Instead's total number of franchises grew by 24 percent.
The America that existed a century ago is not the same as the America of today for seniors, due to economic issues, mobility and people choosing to have children later in life. Traditional family structures have changed dramatically. According to the Bureau of Labor Statistics, there were almost 29 million married, dual-income couples in 2002. These numbers have generally been on the rise since the federal government started tracking them a decade ago. For seniors, this means less help from family members who are busy working. "Most care providers of this type of service are the family members themselves," says Jerry Clum, who co-founded Comfort Keepers with his wife, Kris, in 1998. And, says Jerry, the dual-income trend is "placing a great deal of stress and difficulty on these families."
Another trend that's increasing the need for senior care is the mobility of Americans. Education and careers often lure the younger generation away from their parents. "Family members aren't as near to each other as they used to be," says Jerry.
Another factor affecting care for elderly relatives is that many baby boomers have in fact waited longer to have children, says Firman. Consequently, a new generation has emerged, known as the "sandwich generation." "In the typical American family, people in the 40 to 55 age range have children and the elderly 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 and interdependent, their primary challenge is providing the basics necessary to keep their elderly relatives at home. "Eighty-eight percent of [seniors] say they want to stay at home as long as possible," says Firman. As long as they have access to basic services, home also tends to be where the elderly are healthiest and lead the highest quality of life.
Paul Hogan witnessed this firsthand when his 88-year-old grandmother, who was living alone, became so weak she couldn't move from her chair to her bed. She was not expected to live to the end of the year. Paul's mother started providing basic nonmedical care, and his grandmother lived 11 more years, almost reaching 100 before passing away. "I saw firsthand what basic services, such as companionship, meal preparation, light housekeeping, errands, incidental transportation and medication reminders, can do for the elderly," he says. "Those things have a very powerful effect on an elderly person."
Senior-care franchises are being called upon to provide these basic necessities. Companies like Home Instead and Comfort Keepers have noticed that companionship, the most basic of services, is overwhelmingly in demand. Paul says companionship accounts for about 75 percent of what Home Instead provides. Jerry Clum has noticed the same need among the 8,000 clients Comfort Keepers serves. "On a national basis, companionship is the number-one service," he says. "About 40 percent of the hours that we bill out nationally are for companionship." Following closely behind, says Jerry, is a demand for housekeeping, meal preparation and transportation.
A Ripe Opportunity
Jim Woolford was one of 91 franchisees to open a Comfort Keepers in 2003. He and his wife, Pamela, were inspired after searching for in-home care agencies to provide help for his mother. Through their research, they discovered a lack of quality agencies in their home state of Washington. "We felt there was a lot of need for it out here and a lot of potential, and we were right," says Jim, 46.
Starting the franchise in February 2003 with $32,000, Jim ran part of the office out of his home and the other part from an executive suite. A retired naval officer, he had no previous franchise or in-home care experience; but with hard work and support from some of the other Comfort Keepers franchisees, he got it off the ground. A key piece of advice came from the corporate offices: Hire adequate staff to allow for growth. In the beginning, he was trying to do all the work himself. "Once we [brought on additional staff], it relieved me of administrative responsibilities, and it allowed me to do more marketing and [meeting] with the agencies that provide care for the seniors in our industry," he says. "Since then, it has just been really busy. It's been exploding." Currently, he serves approximately 40 clients and employs 55 caregivers, although the numbers change constantly. Jim offers his own advice: Be passionate. "[Potential clients] have to see in your eyes and hear in your voice that you are there to take care of mom and dad," he says.
Jim focuses on reaching 55- to 60-year-old baby boomers whose schedules don't allow them to take care of parents in their 80s. And even with 55 employees, he continues to invest a lot of his time and money in the franchise. Eighty-hour workweeks aren't abnormal, and even now, Jim says, he has about $75,000 tied up in the franchise.
But the payoff is worth it. The Woolfords' 2003 sales totaled $325,000, and Jim projects 2004 sales at $1.1 million. More than just the financial payoff, the emotional rewards are what truly get him through each day. "When we have the opportunity to bring [clients] home from rehab or a nursing home, and when they walk in the house and their faces light up, it's like thank you, thank you, thank you," says Jim. "What's that worth? It's great."
On the Horizon
As the needs of seniors change, so do the services offered by senior-care franchises. For more than a year, the Clums have been working with their individual franchisees to obtain state licenses for additional services such as bathing and feeding. Future projects may include introducing electronic devices to help track and locate Alzheimer's patients who wander away from home.
The Internet enables franchisees to better serve seniors by helping them stay connected and access information. In the future, Jerry Clum is considering equipping Comfort Keepers caregivers with laptops so they can give clients the option of using the Internet for recreation or learning. "We think [the Internet] is an incredibly cost-effective way to deliver really sophisticated information to people," says Firman, with The National Council on the Aging, which has created a Web site that explains federal and state assistance programs for older Americans.
As seniors enter a new phase of life, the senior-care franchise industry keeps pace. "Right now, we're serving a segment of the population that is very independent," says Paul Hogan. "They remember the Depression, the World Wars. They are very self-reliant. [The younger seniors], the 60-year-olds, are so much more used to services that when they move into this age of needing care, they'll be more readily accepting of services." The seniors of tomorrow will be looking for providers who are more service-oriented, and they will be quicker to seek help.
They will also be less financially prepared to pay for in-home care. According to a demographic profile of baby boomers compiled in 2003 by MetLife's Mature Market Institute, younger boomers spend 10 percent below average on life insurance and don't seem as concerned about the future. However, the lack of finances doesn't worry those in the senior-care industry. "Even though there may be some different financial challenges for the boomers," says Jerry, "we still feel that, when it comes to 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 will replace child care as the number-one family issue of the baby boom generation. Opportunities abound on the not-so-distant horizon.
"If you're going to do this, make the commitment both personally and financially, and go and do it," says Jim. "I'm here on the other end saying it's worth it."
|GOLDEN YEARS: If you're interested in starting a senior-care business, check out the following franchises:|
(866) 731-2273/(520) 577-4825
ComForcare Senior Services Inc.
Griswold Special Care
(888) 484-5759/(402) 298-4466
at Home Inc.
Sarah Adult Day Services Inc.
Superior Senior Care