Examining Healthcare Franchises
I read with great interest the healthcare articles in the September-October 2015 issue of Search & Employ®. Those articles made the point that there is a world of opportunity in the healthcare sector of the economy. As the headline of the main article said, “Growth in demand means more jobs.”
Being a business guy myself, I could not help wondering: Who is going to manage all the new employees? To me, the obvious answer would be entrepreneurial veterans seeking out franchising opportunities.
I was impressed to read that two occupational categories alone will grow by more than a half-million jobs each between 2012 and 2022: registered nurses and personal care aides. The number of home healthcare aides is expected to increase by nearly 425,000 during this time frame, too. All this is hardly surprising. The nation is aging, and people are living longer. In addition, people with disabilities who rely on healthcare have made impressive gains that have given them the right to select their own care providers and the places where they receive care.
If you are interested in healthcare, or you are already working in the field and want to broaden your horizons, consider buying a healthcare franchise.
Home healthcare is a particularly hot business right now, because many aging people and people with disabilities prefer to be cared for in their homes. In 2014, Forbes magazine named three home healthcare brands to its Top Ten Best Franchises List requiring investments under $150,000.
Home healthcare services are also a godsend to caregivers who need an occasional break (called respite in the industry), are unable to master some of the skills for patient care, and may be elderly themselves.
There are more than 50 home healthcare franchises operating in the United States right now, up from just 13 in 2000. Here is why I think they make particularly attractive opportunities for veterans:
- They require relatively low upfront investments that many veterans can make – with or without loans. The Small Business Administration (SBA) has added a program targeting veterans to its 7(a) loan program.
- Revenue is quite high relative to the investment, Forbes notes, and territories are still pretty broad.
- Many insurers already do business with established franchises.
- If you decide to investigate home healthcare, keep in mind that different franchises feature different services. Some offer skilled nursing, while others specialize in assisting people with everyday activities, such as bathing, dressing, and feeding. (People who are familiar with healthcare will recognize this as Activities of Daily Living, or ADL.) Still others provide companionship, which includes rides to the grocery store, doctor appointments, light housekeeping, and meal preparation.
If home healthcare is too broad for your taste, there are also plenty of services that are provided in homes and other facilities that care for elderly people. Some of these have been franchised as well:
- Physical and occupational therapy
- X-ray services
- Radiation – provided in mobile units
- Specialized wound care
- Mental health
Assistive living facilities, which provide aging-in-place services, have become very popular in recent years. But opening and running an assistive-living facility is pretty expensive because such facilities require unique construction or extensive remodeling. Depending on where the facility will be located, you could be looking at anywhere from $700,000 to more than $2 million.
An assistive living franchise can be a great opportunity for a group of like-minded investors interested in senior care. Some franchises have created strong partnerships with financial lenders, including private equity firms. The SBA is also an option.
Keep in mind, too, an assistive living facility does not have to be a spacious high-rise. Many seniors and families prefer smaller, homier facilities.
Adult day care. Many elderly people live with family members who work. Some adults and families turn to adult care centers to ensure that their loved ones are cared for, fed, and occupied with activities during the day.
The term “adult day care” may conjure unsettling comparisons with day care for young children. But adult day care services are entirely appropriate for, and beneficial to, elderly people whose needs vary from needing companionship and some ADL’s to those with dementia. Many facilities operate like senior centers, offering the same kinds of activities:
- Art classes
- Game rooms featuring card tables, mah-jongg, and board games
- Reading rooms
- Discussion groups.
This concept sells itself: You don’t need me to tell you how important it is for a person to remain as active as possible throughout his or her days, regardless of ability level.
Freestanding centers. As medicine becomes more specialized, franchises have followed suit. Many supplemental services are also offered in freestanding outpatient centers. Examples include:
- Dental services
- Massage therapy
- Orthotics/foot care, with retail arms
- Hearing aids
- Vision care
- Urgent care centers
Urgent care is just starting to specialize for services. OrthoNow is a South Florida franchise that treats bone injuries such as sprained ankles and broken arms. The area has a heavy senior population that makes up a sizable percentage of walk-in patients.
STAFFING A HEALTHCARE FRANCHISE
More healthcare professionals, particularly those in allied healthcare, are willing to turn to healthcare franchise facilities instead of large settings like hospitals. Why? Because smaller, more focused healthcare service businesses can be more flexible places to work.
I recently had a conversation with the owner of an adult group home with 15 residents. He told me that he doesn’t even make a staff schedule. Instead, he lets the staff decide what shifts they will work. “It works out better for them,” he said, “when they can make arrangements themselves. All I need is to review the schedule to make sure there are enough people on each shift, and that no one is working too many hours.”
Franchises that accept payment from Medicare and Medicaid need to adhere to staffing rules from the Centers for Medicare and Medicaid Services. Every state has additional staffing rules for all healthcare facilities to follow as well.
Good management can overcome many staffing issues, including turnover. PreCheck, a company specializing in running background checks on healthcare professionals, says high turnover and staffing shortages can be avoided by creating a workplace culture that works closely with new hires in particular.
- Create onboarding programs that outline your business’ mission. State what is expected from employees, what the business will do to support them, and the options they can use when something is not right.
- Train employees for success to help them envision their future with the business. More training also leads to better patient care.
- Engage employees. Listen to what they have to say about everything from time off to new patient care guidelines to another staffer’s performance. Be sure to recognize their individual accomplishments.
David E. Omholt is a franchise advisor with Veteran Franchise Centers (VFC) – a RecruitMilitary strategic partner. His company offers a free service to veterans looking to learn more about the franchise buying process and options in the market. Omholt is a Certified Franchise Executive (CFE) and a frequent speaker on the subject of franchising on talk shows, at industry conferences, and on college campuses. He has been both a franchise licensor and a franchise licensee. Omholt is available at (866)246-2884 or email@example.com.
By DAVID E. OMHOLT on Tuesday November 3, 2015