Who cares wins

If you’re looking for a recession resilient business, with rising demand from a growing marketplace, then a care franchise could be for you

The UK’s population is growing in size and becoming increasingly older, with the number of over 65s climbing steadily – a trend set to continue, according to the ONS (Office of National Statistics), which projects 3.5 million people over 85 by 2035, with over 65s making up a staggering 23 per cent of the total population.

Against this background of accelerating requirement for elderly care, is a health and social care system simply unable to provide the necessary support, now or in the future. Hence the introduction this year of the new Health & Social Care Bill, which emphasises the importance of integrating care, and aims to offer more choice to individuals.

In short, the NHS and Local Authorities will be providing fewer care services themselves and be tasked with developing partnerships with private and third party providers to deliver a range of complex services, not only to the elderly, but to anyone requiring care.

According to Steve Welsh (pictured right, top), Managing Director of Kare Plus, these seismic changes in health and social care services spell major opportunities for franchise owners in the sector.

Excellent prognosis

“Kare Plus is unusual within the franchise industry, in that we provide medical as well as non-medical care,” he points out. “So, although we have existing links with some of the largest private nursing homes and care facilities in the UK, we see the NHS as the biggest opportunity for Kare Plus right now.

“We are re-negotiating our current tender with the NHS nationally, where the annual spend on agency procured staffing is in excess of £250 million, with the potential for franchise owners to make around 40 per cent margins by providing specialist nursing staff. The recruitment and supply of such staff represents a quick win, generating early income for franchise owners while they develop the domiciliary care side of the business.”

The wide spectrum of services offered by Kare Plus ranges from specialist nursing for those convalescing after a spell in hospital, to caring for mental illness or dementia sufferers, and looking after the frail elderly, who simply need assistance with day-to-day living and whose family are too far afield to cope.

“We are actually providing a much appreciated and highly valued service,” Steve says. “As well as making money and building a profitable business, our franchise owners are making a difference to people’s lives, which creates great job satisfaction and a real feeling of fulfilment.”

Winning formula

Pat Thompson (pictured right, centre), Franchise Recruitment Manager at Caremark, agrees. “We look for franchise owners who enjoy being with people, who want a community based business and understand the value of what we do,” he says. “A typical Caremark franchise owner would have 60 staff to deal with and around 200 customers. It’s that ability to build local relationships and provide a high quality service that is at the heart of our success.”

Caremark currently operates in 63 locations across the UK. Top performers are turning over up to £2.25 million per annum, with healthy net profit margins of around 15 per cent.

“We have some very large businesses and some much smaller,” Pat continues. “Franchise owners enjoy fixed overheads. They operate from an office base with a core staff of care supervisors and a bank of personnel who are only paid when they are used. It’s highly profitable, hugely rewarding, and you can build a successful business very quickly.”

Perfect prescription

The care marketplace is highly fragmented, with around 5,800 service providers throughout the UK. Outside of the franchising industry, these tend to be large public limited companies (PLCs) that have expertise and resources but lack the necessary local infrastructure to deliver consistent, high quality service or, at the other end of the scale, small time businesses struggling to recruit staff and stay abreast of changing compliance regulations.

“This is what makes the care business perfect for franchising,” Pat Thompson maintains. “As franchisors, we can provide the necessary support in a complex marketplace, with training and advice, keeping our franchise owners compliant and up-to-date with the latest research, policies and documentation, enabling them to deliver excellent service and build a sustainable and effective business.

“A report in 2010 by Laing and Buisson confirms that the average Caremark franchise owner is out-trading the market average by almost 80 per cent. No wonder franchise units are gaining market share both from PLCs and independent operators.”

Bluebird Care is one of the longest established of the care franchisors, with 145 franchise owners in the UK and Ireland, providing £55 million per annum of non-medical care in the home, not only for the elderly, but also for children and younger people with special needs, such as a disability or learning difficulties.

Healthy profits

With 22 years of experience in the franchise industry, Bluebird Care Director Simon Dalziel (pictured right, bottom) believes few franchise opportunities can offer the long-term scope for success that a care franchise can.

“Everyone knows this is a growing market and, of course, our success is based on repeat business. Once we have secured a customer, we provide ongoing services, often for the rest of that person’s life. As state funding becomes increasingly squeezed, more and more people are looking for private care providers able to deliver high quality services, with who they can build a strong, long-term relationship.

“Bluebird Care has experienced massive growth over the six years since its first franchise was launched, and is still growing at a rate of six per cent month on month,” says Simon.

“Twenty of our franchise owners now turnover in excess of £1 million per annum, a couple turn over more than £2 million and average profit margins are between 15-20 per cent. This level of success has been achieved, in most cases, within three to four years of operation and there are not many businesses sectors that can offer an opportunity like that!”

Highly regulated

The care industry is highly regulated and so entering the marketplace is no easy matter, he adds. Jumping through the various compliance hoops and achieving CQC (Care Quality Commission) accreditation are just some of the barriers to setting up a business. Funding is another, as Simon Dalziel points out: “We all know that banks are unwilling to lend to new business start ups right now and this industry is no exception, unless you are investing in a franchise business, in which case the banks look very kindly on you.

“They know our track record and recognise the sustainability and longevity of the business model, that’s why potential franchise owners can obtain up to 70 per cent funding, subject to status.”

Empathy is key

Although all franchisors agree that empathy is key, previous background, age and gender is immaterial.

“In a nutshell, we don’t sell franchises, we recruit business owners with entrepreneurial flair and add experience and expertise,” concludes Simon Dalziel.

There is no typical Kare Plus franchise owner, concurs Steve Welsh. “We are not targeting a particular group. Although some of our franchise owners have a background in nursing or social work and have been drawn to run a business for themselves in a sector they know, others are simply business people who recognise the potential opportunity to make money.

“We welcome anyone who is prepared to work hard and has the necessary determination, vision and commitment to succeed.”

Written by Megan Dunmore