The future grows older – a generation turning elderly presents opportunities to franchisors
The Future Grows Older
Significant demographic trends present unique opportunities for franchising in the coming 25 years. The fact that the population is aging is not news, but the number of soon-to-be-senior citizens means franchisors can expect a very different customer base in the future.
In the 1990s and beyond, older Americans will make up a larger market for products and services than they do today. Some statistics: According to the U.S. Census Bureau, more than 53 million people–about 21 percent of the U.S. population–are now 55 or older. By the year 2010, 75 million, or approximately 26 percent, will be 55 or older, and one in seven will be 65 or older.
The Conference Board, a New York-based business-research organization, says those 55 or older currently control more than 50 percent of this country’s discretionary income and 80 percent of all financial assets of savings and loan institutions.
George Moschis, director of the Center for Mature Consumer Studies, at the State University of Georgia in Atlanta, says success will belong to those businesses that anticipate the needs of the aging consumer. “Franchisors have to look at how the changes in the demographic makeup of this country are likely to create needs for certain products and services,” he says.
Research conducted through the center, Moschis says, suggests that the market for products and services for seniors in the coming years will be different from what it is now because senior boomers will have fewer children 20 percent will have one child, and another 20 percent will have no children. “That means that this change in demographic composition is going to require a larger number of care providers for older people,” says Moschis.
The implications of Moschis’ research are clear: Franchisors must direct the thrust of their products and services toward this group to ensure success. Likewise, anyone thinking of buying a franchise should make sure the franchise has a strong appeal to the older population.
Following are products and services that attract a mature customer. Most offer convenient to-your-door delivery.
Home-care services such as visiting doctors and nurses, prescription delivery, physical therapists, and general companion care givers will be popular. The rule of thumb for this category is to focus on any type of service that makes life easier for older people.
Rental businesses that offer recreational vehicles and medical equipment for home use will gain in popularity.
Take-out food will continue to have a strong showing. Older people spend more money on food at home than they used to, but they don’t want to cook as much as they did when they were younger.
Independent living centers may be a boom business of the future for franchising. Also called case-management businesses, living centers resemble today’s retirement communities, but they are turnkey operations that offer the same sets of conveniences and services in all locations. They are affordable facilities with cluster housing, so residents can have independence and privacy without feeling isolated. On-site services include emergency medical care, hair salons and other personal-care facilities, and transportation. Nearby are grocery stores and health-care facilities. Entertainment is available on the premises and in the vicinity.
Home remodeling services will flourish. The senior boomers will have more money and a desire to stay at home rather than move frequently. They will choose a lifestyle, invest in a home, and stay there. Choosing to repair rather than sell is already a strong force and will continue in coming years.
For would-be-franchisors and franchisees, there are a few guidelines that may help in your choice of a business. Consider if the franchise offers its customers a secure feeling. Older people are usually averse to risk, and anything that does not give them a certain level of comfort is likely to fail.
Consider franchises whose products and services can help older consumers with their changing physical needs examples include eye-care and hearing-aid businesses.
Finally, be aware of what the older consumer needs, wants, and will pay for. Keep in mind that older Americans are healthier and financially more secure than ever before and are attracted to products and services that provide comfort, convenience, reliability, security, and a sense of self-worth.
Les Rager is president of Rager and Associates, a franchise and small-business consulting firm based in Roswell, Ga.
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