Think it’s too late to start a business? Think again. It’s never too late. Indeed, the fact that entrepreneurship is even alive and kicking these days is largely thanks to America’s seniors. According to a 2009 report by the Ewing Marion Kauffman Foundation, in every single year from 1996 to 2007, Americans between the ages of 55 and 64 had a higher rate of entrepreneurial activity than those aged 20 to 34. The report even goes so far as to predict that the United States is on the cusp of an entrepreneurship boom and that seniors will be driving the movement. It’s no surprise, therefore, that not only are seniors active franchise investors, but they’re also a target group for many franchisors’ recruiting efforts.
“We have definitely noticed more seniors investigating and investing in franchises,” says Victoria Conte, vice president of operations for Matchpoint Franchise Consulting Network, a firm that specializes in matching franchisors with franchisees. “We are an aging society, and the older population is now more active. Seniors also have the desire and need to generate additional retirement income due to economic factors.”
Art Koff, founder of RetiredBrains.com, a website designed for older baby boomers, seniors, and retirees, has also seen a growing interest among seniors in starting their own businesses. “We have had substantial traffic to our ‘Start Your Own Business’ pages as many older job seekers have given up on finding employment and are looking for other ways to make money in order to live the lifestyle they had hoped to live during their retirement years.”
While the recent downturn in the economy is currently driving even more seniors to look towards business ownership, there are other factors that have nothing to do with the recession. “We have found an increasing number of franchise candidates drawn to our brand as a way to ‘give back’ as well as help enable their own pursuit of the entrepreneurial dream they have often suppressed for many years while in Corporate America,” says Jeff Bevis, founder and president of FirstLight Home Care, which specializes in non-medical care for those in need of in-home care including seniors, disabled adults, and new mothers.
Not only are seniors attracted to franchise opportunities, but they also make excellent franchise candidates – so much so that FirstLight Home Care is actively recruiting them as franchisees by highlighting seniors as business owners in their online advertising efforts and speaking directly to the interests of seniors or retirees during their initial prequalification discussions. And FirstLight Home Care is isn’t the only franchise company reaching out to seniors. Conte says franchisors recognize that the baby boomer population is a huge market and are taking the time to actively recruit this age group.
What Seniors Bring to the Table
“Older franchisees have a wisdom in their years,” says Bevis. “They often better understand how to work effectively with others. They often have deep experience building teams, possess a successful track record managing people, and have weathered the ups and downs of economic cycles. They are resilient. They bring their experience in knowing they do not have all the answers. They see and often value more quickly the benefits of following a system while blending their own learning to make their business even better.”
Seniors are also more financially secure and capable of investing in a franchise. “They bring stability and they are more likely to have assets that they can leverage,” says Conte.
Finally, seniors know how to better react to risk as well as plan accordingly. “They are many times more open to risk since they’ve calculated the scenarios and seem to know their risk tolerance level,” says Bevis. “They tend to err [on the side of] a conservative approach, thereby increasing their working capital ‘just in case,’ but still create a methodical plan and approach to strengthen their chances for success.”
And these aren’t just anecdotal observations. A study by researchers at the University of Michigan found that older people were more likely than younger or middle-aged ones to recognize that values differ, to acknowledge uncertainties, to accept that things change over time, and to acknowledge others’ points of view.
What Types of Franchises Work Best?
“Home-based senior-care franchises, as well as those that utilize expertise in business or business coaching, [are] better for older investors,” says Conte. “These have lower overhead costs and do not require physical labor.”
Joel Libava, a franchise consultant and marketer, agrees that home-health-care opportunities can be a good fit. He also recommends service franchises and multi-unit retail, noting that franchise concepts that require strong management and human resource skills tend to be good matches for more mature franchise owners.
On the other hand, seniors need to be wary of franchises that require a lot of physical effort or involve long hours. “Some business-to-business franchises, like a sign business, for instance, which requires physically calling on prospective customers all day long, may not be the right thing,” says Libava.
Koff agrees, saying that seniors should avoid restaurant franchises: “Fast-food franchises, for example, require a great deal of time spent at the unit, and much of this time is standing and often involves physical activity.”
Before making any final decisions or handing over any money, seniors need to enter into the investment with their eyes wide open. Libava recommends seniors start by thoroughly researching different franchise concepts, investigating what the day-to-day activities of a franchise owner entail, and, finally, having an exit strategy securely in place.
Seniors are fundamentally impacting the franchising industry. And while many franchisors are working hard to design products and services that meet their needs, many others are realizing the value that seniors can bring to the table as franchisees. As the franchising industry regains its footing following the recession, perhaps it’s only appropriate for those who have lived and learned to lead the way.
For a complete list of franchise opportunities, visit the AllBusiness.com Franchise Directory.
Sara Wilson is a freelance writer who specializes in issues related to small businesses. Contact her at email@example.com