There is an increased trend where more and more people are engaging in side gigs, including home healthcare franchises. The life expectancy is going up, and we are faced with a situation whereby we will have older people than children. With the increasing proportion of life expectancy and older people, important questions arise. Will this increase in population be accompanied with extended periods of good health, social engagement and productivity and a sustained sense of well-being? Or will it be linked with more disabilities, illnesses and dependency?
In order to manage population aging, there is need to build infrastructure and institutions. This is something that should be done as soon as possible as any delays may lead to a less effective and costly solution.
Overview of Aging Population
The aging population of people aged 65 years and over is expected to rise up to 1.5 billion by 2050 globally. In the US, it is estimated that the number of aged people will be 81.2 million by 2040. In developing nations, the aging population is higher. For the next two decades, the population of people over 60 years is projected to increase with over three percent per year.
In the US, elder care is estimated to be worth about $400 billion with most seniors aging in place at their homes rather than in live-in home care facilities. According the US census, only around 3% of senior citizens reside in nursing homes.
People Living Longer
The great increase in average life expectancy during the 20th century is seen as one of the top achievements in the society. While most children born in 1900 didn’t make it past 50 years, life expectancy at birth today exceeds 81 years. Countries that are less developed have experienced a steady increase in life expectancy. This change is part of a major transition in human health trending around the world along different paths and rates. The transition covers a broad set of changes that includes declines form high fertility to low fertility rates; increased life expectancy at birth and during old ages; and a move in the major causes of death.
In the early nonindustrial communities, death risk was high at average age, and only a small percentage reached old age. In the 19th century, more people lived past their middle ages and the deaths were more prevalent at the older ages. It wasn’t until the 20th century that mortality rates begun falling in this group. Recent research shows continued improvement in life expectancy among seniors aged 80 and above.
Why Home Healthcare Franchises are Gaining Popularity
For the past 60 years, the franchise industry has experienced immense growth. Out of the all the different types of franchise business that exists, there is one that is growing extremely rapidly – the home health care or senior care franchise. The top three home healthcare franchises are BrightStar ®Care, Right at Home® Care , and Synergy ®Homecare. In 2000, there were only 13 home healthcare franchise brands. Today, this number has increased to 56 companies according to FRANdata report.
Here is a quick highlight of the pros of home healthcare franchise:
High Revenue
Home healthcare facilities require very low investment. You can reap a lot of benefits from this franchise especially after the first year of making connections with major referrers like social workers and elder-law lawyers. According to research reports, franchise home healthcare franchise brings in revenue close to $2M.
Low Investment
Opening a fast-food franchise will cost $500,000 or more. This is different from home health-care franchises that cost $150,000 or less to start up. The investment capital is basically for hiring, recruiting and training staff, marketing and office space.
International Opportunity
Currently most of the US franchises are starting to search for overseas opportunities. People all over the world are aging, so there are plenty of growth opportunities in new markets.
Giving Back to the Community
Helping seniors to stay in their homes at affordable prices is more than just business. It is community service.
Disadvantages of Home Healthcare Franchise
Staffing
The effectiveness of a home healthcare facility depends on the quality of the staff. A facility can ensure it establishes and maintains good reputation by hiring the best and most qualified staff. However, it can become a challenge to hire the best candidates.
Licensing
While formal education is not a requirement for opening a healthcare agency, an operating license is required. The licensing requirements vary according to states depending on the type of license that one must obtain, this may pose a challenge for some people. Many laws require one to include a detailed package along with the licensing application. You will be required to submit a detailed business plan, in-depth description of planned operational policies, along with the resumes of prospective employees. There are some locations that require the entrepreneur passes a criminal background check.
Business Development
Home healthcare startups are faced with the challenge of finding clients. While this may not be a problem to individuals with entrepreneurial experience, it can be a hurdle for those without professional networks.
Estimated Startup Costs
The financial requirements for home healthcare financial startups depend on the different alternatives available for this franchise. The options include:
- Creating an Independent Home Care Agency
- Buying into a Home Care Franchise
- Purchasing and Existing Home Care Agency
When applying for the franchise, one is required to have proof of financial capability. You should have a liquid cash of between $25,000 and $150, 000. To buy a franchise license, the amount required is between$20,000 and $150,000. The franchise license gives you the ability to use the home care franchise name and run the business in a negotiated location.
Other costs that you must think of are the ongoing costs. To start a home healthcare business, there are ongoing monthly loyalties that one will pay. These range from 3 – 7%. Other regular ongoing fees include marketing charges, software, audit fees, software and training.
Conclusion
Before opening a home healthcare franchise, it is important that one researches and clearly reviews the available franchises. There are several home health franchises on the rise, and thus the need to choose the right one. It is a very competitive landscape, so choosing the right partner is imperative.
