Starting a senior care business comes with a number of critical decisions. One of the biggest and earliest decisions that entrepreneurs need to make is whether to buy a senior care franchise or start their own business.
Choosing between a franchise and an independent business will have a fundamental effect on how you build and develop your business. On the one hand, you have a proven blueprint and the resources of a larger brand. On the other, you have the operational and financial flexibility of running your own business.
At Senior Helpers®, we’ve seen independent businesses succeed in the senior care sector. At the same time, we’ve seen how important a franchisor’s business model and resources can be for new home care providers.
Buying a Franchise vs. Starting Your Own Business
The pros and cons of franchises vs. independent businesses apply broadly to most industries. Whether you’re starting a restaurant, a retail store, or a service based business, you can expect the same core trade-offs between these two options.
Below is a summary of the advantages and disadvantages of each model. After that, we’ll explain how these pros and cons apply to senior care businesses specifically.
Buying a Franchise
The chief benefit of franchise ownership is the systems and resources of an established brand.
Rather than building a business from the ground up, you’ll start with a proven blueprint. You’ll also enjoy access to training and education from your franchisor, the branding and marketing assets of a larger company, and ongoing support from business development experts.
While a turnkey model will be attractive to many investors, this model will come with certain limitations. At the same time, the added fees and royalties of a franchise can increase business costs. These added costs may or may not be offset by increased revenue potential offered by a franchise.
Pros:
- Turnkey business model
- Improved access to financing
- Established branding and name recognition
- National advertising and marketing efforts
- Support with local marketing and lead generation
- Training and education for new owners
- One-on-one support from business development specialists
Cons:
- Cost of franchise fee and ongoing royalties
- Protected territories may come with service area limitations
- Requirements for how you operate and market your business
- Limitations or restrictions on third-party vendors
- Financial and legal obligations under franchise agreements
Starting Your Own Business
The main advantages of starting your own business are added freedom and the potential for lower business costs.
With a startup, you aren’t limited to a specific business model or service area. That means you can build your business however you envision it. At the same time, you won’t need to pay a franchise fee or ongoing royalties, which may allow you to start your business for a lower investment.
The trade-offs of a startup are the added risk of developing your own business systems and the lack of outside support. Building your own business model instead of relying on a proven system comes with inherent risks, and as an independent business, you’ll lack the resources of a larger brand.
Pros:
- Freedom to develop your own business model
- No franchise fees or ongoing royalties
- Fewer restrictions on how you operate your business
- Ability to define your own service area
- Lack of restrictions on third-party vendors
- No franchise agreement obligations
Cons:
- Access to financing may be more limited
- Lack of established branding or name recognition
- Lack of support with advertising, marketing, and lead generation
- Training and education will be self-directed
- Limited outside support when starting your business
The Right Choice for Starting a Senior Care Business
Buying a franchise and starting your business both have their own advantages and disadvantages. However, these pros and cons can become more pronounced in certain industries.
The senior care industry offers a perfect example. Home care providers face a number of challenges where a franchise can offer advantages over a startup.
Below are five areas where a franchise model makes sense for a senior care business:
- Establishing Trust. As a senior care provider, you need to establish trust between your business and potential clients. A recognized brand with an established reputation can be a valuable asset.
- Advertising & Marketing. How you advertise and market your agency will affect your ability to scale your business. Given the growth rate of the senior care industry, your business may benefit from an accelerated growth plan.
- Caregiver Recruitment. America’s caregiver shortage makes staffing a challenge for new senior care businesses. Some franchise brands, including Senior Helpers, offer support to franchisees for caregiver recruitment.
- Regulation & Licensing. Starting a senior care business means grappling with state regulations and licensing requirements. If you’re new to the industry, it can help to have one-on-one support in these areas.
- Local Competition. As the Baby Boomer generation ages into their 70s and 80s, competition in home care will accelerate. The operating systems and resources of a franchise brand can help you navigate this competitive landscape.
As helpful as a franchise model can be in each of these areas, the choice ultimately comes down to each investor.
If you prefer the freedom and control offered by a startup, or if you have a strong base of knowledge and experience in the home care sector, then starting your own business could be the best path.
If you want to start a senior care business but you don’t have industry experience, or if you think you would benefit from the resources, recognition, and systems of an established brand, then a franchise will be the best fit.
Want to learn more about senior care franchise opportunities in your region? Contact Senior Helpers today or book a one-on-one call for franchise details!