Let’s face it, we all have to get old at some point. For millions of Americans each year, this means the time to think about senior care facilities has arrived. The senior housing industry is expected to explode in popularity within the next decade due to one simple fact – Baby Boomers. That’s right, an estimated 74 million Americans are Baby Boomers and they’re not getting any younger. As a large portion of boomers begin to approach their mid-70’s, the need for more assisted living options continues to grow. The senior care industry already totaled $400 billion in revenue in 2018!
Who are the Baby Boomers?
The baby boomer generation is now the second largest generation in the U.S. behind only Millennials. Boomers are those Americans that were born between 1946 and 1964. When the millions of American soldiers returned from WWII in 1945, the government provided educational and housing subsidies. The government support veterans received made it possible for millions to purchase homes in newly constructed suburbs and find steady work. As a result, Americans could start to have children minus the worry of having enough to provide for them.
Between 1956 and 1960, an astonishing 21.2 million boomers were born, nearly 1.5 times the number born between 1941 and 1945. This total is the largest for any 5-year period in the 20th century. In general, boomers enjoy a much higher standard of living than their parents. Boomers came of age with the rise of consumerism in the marketplace. They are often associated with the hippie, counter-culture movement of the 1960’s and 70’s although many harbor more conservative beliefs than their children. While boomers constitute the largest percentage of the American workforce, approximately 10,000 retire every day.
What’s Driven the Senior Care Industry the Last Few Decades?
A Senior Housing Construction Boom
Ever notice that senior care facilities seem to pop up everywhere? A quick drive around your town or city and you’ll likely spot a fancy, new building with lush landscaping, and a friendly demeanor. Over the past few years, low interest rates and the growth in the elderly population has led to a major rise in retirement homes.
In Atlanta alone, the fastest growing market for senior housing, 4,003 units were under construction in just the first quarter of 2019! Even secondary markets such as Salt Lake City, Columbus, and New Orleans have experienced a 40% growth in construction over the last three years.
Senior Housing Offers More Opportunities to Socialize than Ever Before!
For many senior citizens, loneliness can feel like the worst part about getting old. Friends and family begin to pass away and deterioration of the body and mind can make it difficult to go out. Not to mention, children often feel anxious about their elderly parents continuing to live on their own. While senior living facilities are not new, many now incorporate a major societal aspect to combat this overall sense of loneliness.
It’s clear that seniors are not interested in the same old bingo-hall type of environment that their parents sought out. Seniors now enjoy tai chi, yoga, and massages. Research has shown that horse therapy, an activity that several senior care facilities offer, may be beneficial in the fight against dementia, Parkinson’s, and depression.
Some facilities like Kendal at Ithaca offer life-long learning classes. These classes include current events, the art of making wine, and multiple cooking courses. All of these activities may come at an increased price, but the data proves it – seniors are willing to pay for these great options! One recent survey found families pay between 15% and 20% more than their stated budget.
Life Expectancy in the U.S. has Shot Up the Last 60 Years!
As Americans routinely make it past their 80th birthdays, its notable to think where we came from only a few decades ago. In 1955, the average life expectancy was roughly 69 years. The average American can now expect to live 78 years. The reasons are clear – major advances in healthcare, education, technology, and infrastructure have resulted in a healthier population.
In your parents and grandparents day, American diets largely consisted of meat and carbs, but hardly any vegetables (not great for your heart). Exercise was not yet part of mainstream thought, working and living conditions were often much more hazardous for longterm health, and oh yeah – you could smoke any and everywhere.
Not quite convinced: According to researchers at The Hamilton Project (an economic policy think tank), 50 years ago, a 65 year old man had an 81 percent chance of reaching 70, a 41 percent chance of making his 80th birthday, and a 10 percent chance of getting to 90. By 2015, those percentages have risen to 90, 62, and 22 respectively. That’s right, a 65 year old man is 50 percent more likely to see 80 than in 1965!
Entrepreneurs See the Massive Growth Potential in the Senior Housing Industry and Continue to Invest
With growth expected to be exponential in the industry, entrepreneurs continue to weigh their options. The fact is, elderly population growth won’t slow anytime soon within the next decade. The market is sure to expand to new heights. There are many trusted, notable names in the senior care industry. Some entrepreneurs with high levels of capital and valuable business connections choose to construct their own facilities. This process can take years as permits need to be secured, architecture and design plans must be approved and staff positions need to be filled.
Rather than start from scratch, some entrepreneurs prefer to seek senior care franchise options instead. In the franchise system, the franchisee buys the license to operate a business under the name of a more established brand. Under this model, franchisees can gain valuable advice on design, layout, staffing, techniques… etc. Our picks for the best elderly care franchises are listed below.
Right at Home
Right at Home provides personal-care, non-medical care, and companionship-care for seniors. As an in-home care assistance company, Right at Home care providers are trained in a variety of nursing techniques to make sure they can meet each senior’s specified needs. Right at Home consists of 471 franchisees as of its 2020 FDD and projects to onboard another 35 in the coming year.
- Approx. Initial Fee: $49,500 (per 2020 FDD)
- Approx. Startup Cost: $80,150 – $147,150 (per 2020 FDD)
- Approx. Revenue Range: Median of Revenue $1,276,001 (Per 2020 FDD)
Touching Hearts at Home
Another of the many in-home senior care franchises on the market, Touching Hearts at Home offers a helping hand to seniors when their loved ones aren’t there. Touching Hearts provides non-medical services such as meal prep and transportation. Care-givers can provide service for a few hours or 24/7.
- Approx. Initial Fee: $22,500 (per 2020 FDD)
- Approx. Startup Cost: $33,950 – $50,000 (per 2020 FDD)
- Approx. Revenue Range: See FDD (per 2020 FDD)
Golden Heart Senior Care
The goal of Golden Heart Senior Care is to make a senior’s transition from independent living to assisted living as easy as possible. Golden Care provides expert analysis on which doctors are right for you. They also provide house cleaning, meal preparation, and caregivers specialize in dementia and Alzheimer’s care. There were 24 outlets operating in 2018 and five more are projected to open by the end of 2019.
- Approx. Initial Fee: $35,000 (per 2020 FDD)
- Approx. Startup Cost: $49,325 – $80,650 (per 2020 FDD)
- Approx. Revenue Range: $154,395 – $1,936,359 (per 2020 FDD)
BrightStar Senior Living
BrightStar Senior Living operates assisted living and memory care facilities around the country. Residents can choose a studio apartment all the way up to a 2 bedroom. All facilities are well furnished, provide social activities, and are designed to be easy for seniors to navigate.
- Approx. Initial Fee: $50,000 (per 2020 FDD)
- Approx. Startup Cost: $1,031,700 – $1,627,800 if you intend to lease the land and buildings (per 2020 FDD)
- Approx. Startup Cost: $6,293,700 to $10,336,800 if you intend to purchase the land and buildings (per 2020 FDD)
- Approx. Revenue Range: See FDD
The Senior Care Industry Will Only Grow in the Future as America’s Baby Boomers Grow Older
Baby Boomers may catch some flack for their overzealous interpretation of Millennial culture, but they still deserve the best care in their golden years. Statistically, baby boomers have acquired the most amount of wealth out of every American generation. The majority has enough money to spend on excellent senior care and housing. The senior care industry will surely continue to grow in the next few years!
By Tyler Dikun and Jim Notaris