With the New Year upon us, millions of people examine what is important in their lives and set about making fresh starts and amends. Sometimes these evaluations are about relationships or personal habits, but thousands of people also tend to re-evaluate their careers and futures.
For many workers, taking the plunge into owning their own business seems like an unattainable goal, but franchising has made it easier than ever to make this dream a reality. Currently, franchising spans 75 different industries provides 18 million American jobs and generates an overall economic output of $1.53 trillion, according to a study conducted by PricewaterhouseCoopers for the International Franchise Association.
A study by FranData recently found that all industries, with the exception of travel, are experiencing an increase in the number of franchise concepts ranging from four percent in personnel services to 67 percent in retail food. New concepts are being added with increasing frequency. Over the past three years, almost 900 concepts began franchising.
With thousands of possible businesses to go into, how do you pick one? How do you know if the business you choose is a good investment? How do you know if the concept is the right fit for you and your market? Essentially, where do you start?
Joel Libava, works with would-be entrepreneurs in the Cleveland, Ohio area to help them find the franchise that meets their needs, goals and personality. Libava has identified some of the hot franchising trends and concepts for 2007
to help local entrepreneurs in their search for the perfect business.
Hot Trends
1. Baby Boomers and Franchising: It’s growing increasingly more
common for this generation to opt for the working rather than
retirement route. According to HRMS.net, while 76% of boomers intend to keep
working and earning in retirement, on average they expect to "retire''
from their current jobs/careers at around 64 and launch into an entirely new
job or career. Those who are disillusioned with corporate life, have been
downsized, or are simply looking for a new challenge, want a form of safe
self-employment that will sell when they’re ready to let the business go.
2. Buying out from distressed industries: Distressed industries like automotive and airlines offer “buyout” packages and employees are able to seize the opportunity to transition it into their own business by using the funds from the buyout to finance all or a portion of their franchise.
3. The “Semi-Absentee” Owner: Running a franchise as a business on the side is becoming very popular. With the use of technology like online real-time tracking of store activity, absentee owners are able to have a business that doesn’t tie them down. Since 9/11 people have begun to prioritize quality of life above income. For these people, semi-absentee ownership is an attractive option because it allows them to pursue other interests like time with family and hobbies.
4. Female Business Owners: Nationwide, female entrepreneurs have found increasing fortunes. The Center for Women's Business Research estimates that between 1997 and 2004, women-owned firms with no employees grew at 18 percent, twice the rate of all non-employer firms. During the same period, the revenues for women-owned firms without employees grew 66 percent, compared with 42 percent for all firms without employees.
5. Low Cost / Low
Overhead: Entrepreneurs are becoming more averse to risk and investing in
low cost opportunities with low overhead like businesses that they can run from
home or with relatively few employees or inventory. According to the Counselors
to
America
’s Small Business, there are currently over 40 million
SOHO
enterprises in the
U.S.
, and more than a million individuals are expected to join the ranks this year. Also, Micro (garage) business owners earned about $102 billion in 2004, according to a U.S. Small Business Administration, reporting the most recent available statistics.
Hot Concepts
1. Coffee Houses: According to the Specialty Coffee Association of America, specialty coffee was an $11 billion industry in 2005, up from $9.6 billion in 2004. The cafe segment of the specialty coffee continues to grow. And, even in a world where Starbucks is king of coffee, franchises are reaching for their share of the (coffee) pot. If you think there's no room left for you to be a part of the specialty coffee market, think again. "We expect it to continue to grow," says Libava. "Saturation must exist theoretically; we just don't know what it looks like.”
2. Staffing and Business Services: “Staffing and human resources services are on the rise” says Libava. According to the Bureau of Labor Statistics, staffing services will be one of the fastest-growing industries over the next five to ten years. “Finding and recruiting talent is not a skill that most businesses excel at, but one that greatly affects a business’s performance. Businesses that provide these services are in high demand, especially as the pool of talented workers shrinks,” explained Libava. Other business services franchises will also be hot in 2007. “These franchises allow small businesses to outsource their needs for everything from signage to IT services.” Since small businesses play such a big role in our economy, business services franchises continue to grow. Anything a small business owner might need to run his operation, this sector offers.
3. Niche Gyms: Fitness Centers specializing in kids, teens, seniors and even 24 hour gyms for the all around busybody are big. People are investing more time and money into organizations which specialize in accommodating them. “These gyms do not target the general population. Rather, they focus on one group, like people who prefer to exercise at times when most gyms are closed, and then builds their facilities and services around this demographic,” says Libava.
4. Non-Medical Healthcare: According to the Census Bureau, 13 percent of the population will be over the age of 65 by 2010. That figure jumps to almost 20 percent in 2030. “Many older people want to remain in their home as long as they can. Several franchises help people fulfill this preference,” asserts Libava. For the aging baby-boomer, in-home personal care is becoming more popular. Services are now available which can provide not only in-home care, but also provide other home needs such as yard care, general cleaning, and all around handy work.
5. Education and Tutoring: Another concept which grows exponentially as schools become more competitive. Whether it’s online tutoring, subject specific, or even for the youngest bunch of pre-schoolers, parents are willing to throw down big bucks to ensure their child has the extra edge. “Many of these tutoring franchises are even being hired by schools as the No Child Left Behind Act which requires schools to provide tutoring services if their programs don’t meet performance standards,” explains Libava.
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