Why buy a home care franchise?
One of the first questions an entrepreneur will ask before buying a home care business for sale is what are the start-up costs for home health care business? The short answer is that there is no solid figure that we can offer because this will depend on the opportunity that you pursue. However, there are some factors to consider as you go about doing your research. These include:
Returns: Returns on home care franchises in the UK are generally quite generous. You are looking at net profit margins in the region of 22% to 24% (approximately), while the average gross margin (or the money that’s left after expenses are taken out) is in the region of 36.5%. This is a very high figure in an industry that’s growing exponentially with demand that’s not expected to wane anytime in the near future and beyond. Hence, as an investor, this is something worth considering.
Franchise fee and initial investment: As a home care franchisee owner, you will be asked to pay a franchise fee and prepare the initial investment. These costs can usually be financed by a lender that has a relationship with the parent company (up to 70%) if you don’t have the cash on hand. The amount that you’re most likely to pay will depend on the franchise opportunity that you pursue. However, it’s important to note that this investment is generally not as high as the investment you’d make if you were pursuing a business from scratch, starting it all on your own.
Intangible assets: Becoming a franchisee also opens up a lot of opportunities for you. For example, you’ll have access to use the intellectual property of the franchisor such as their brand and name, logos and benefit from their industry-recognised expertise and reputation. Hence, while a brand may be an intangible asset, it has inherent value and this is a cost factor that’s difficult to calculate but is valuable nonetheless.
Operational resources: Operational resources are the resources that help your business run smoothly. Luckily, in home care these are kept to a minimum. But, it’s also worth noting that you can take advantage of relationships that your parent company has established with suppliers and enjoy lower prices on certain essential items.
Ongoing training and support: Another aspect of the costs and profitability equation related to the value of a franchise business is the ongoing training and support that you will receive. This may be considered another intangible asset but it is invaluable for the success of your business. You’ll be taught all aspects of the business operations that you’ll be running and you can also take advantage of a strong support system of fellow franchisees who can help you overcome any challenges as well as give you ideas on how to improve your business within the parameters of the franchisor’s guidelines.
