Starting a Business Over 50
Here are 5 franchises that may be a good fit for older workers
We've all seen statistics on how new businesses tend to crash and burn, which is probably the last thing you want to think about if you're over age 50 and thinking of going from employee to entrepreneur.
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Not that the appetite for risk disappears at age 51, but most people starting a business at this point in their lives are in it for more than the adventure. Being your own boss is a satisfying concept. Control of your destiny is another. And you may have dreams of padding the retirement income and having a profit engine to pass on to your children.
For many dream chasers, opening a franchise may be a smart career move, allowing them to open a business and draw on the experience of those who have already run it.
Doug Schadle, the CEO of Rhino 7 Franchise Development Corp., a franchise consultancy in Apex, N.C., believes that the odds of failure for a franchise are low. "If you follow the system the franchisor has set up for you, you're probably going to make a lot more than by trusting the stock market," he says.
1. Floor covering
- Service: provides floor coverings for homes
- Founded: 1988
- Number of franchises: more than 80
- Headquarters: Smyrna, Ga.
- Investment costs: $160,000 to $250,000
- Fit for 50-plus? The business can be run from your home or the store. No 3 a.m. phone calls for service.
- But: It's not recession-proof and requires energetic marketing for customers.
Spotlight: Cindy, 53, and John Henson, 52, Ocean Isle Beach, N.C.
Cindy and John first talked about owning a business decades ago, when they were dating. In 2005 they made good on that dream. They moved from New Jersey to their favorite vacation spot, Ocean Isle Beach, and opened Floor Coverings International locations in two counties. Cindy has kept her job at an education company, working the franchise part-time. John carries the bulk of the day-to-day responsibilities.
"It's been fantastic for us," says Cindy, even though they're a long way from achieving their goal of being more or less absentee owners and seeing some financial returns.
"I've always wanted to be on my own," says John, "and yet at the same time, there are 90 other franchise owners who I can bounce ideas off of, and that's been nice, too."
Her advice: Set a dollar amount that you're willing to invest and never exceed it.
2. Tax services
Roni Deutch Tax Center
Service: preparation of tax returns
Founded: 1992
Number of franchises: 80
Headquarters: Sacramento, Calif.
Investment costs: $85,000 to $119,000
Fit for 50-plus? Limited physical labor; comparatively quiet, cerebral business year-round except for January to April; mature employees.
But: You need to know and enjoy tax work and be good at marketing for new clients. If you don't like doing your own taxes, this is probably not for you.
Spotlight: Edward Ritter, 75, Knoxville, Tenn.
Three years ago, shortly after his wife died, Ritter moved to Knoxville to be close to his daughter. He had time on his hands and wanted something new to do with his life. A tax preparation service seemed like a good fit for the former CPA. He liked Roni Deutch, both the chain's founder and the franchise itself. "There's isn't a lot of stress involved," says Ritter. "There is a learning curve, but it's not that complicated"
The franchise encourages clients to drop off and pick up their tax materials, and any questions that arise are dealt with on the phone. So the system minimizes the number of people sitting in chairs waiting for their turn, he says.
His advice: Be passionate about what you're doing. Also, do some projections, run the numbers and make sure everything makes sense, so you don't wind up cash-strapped. Of course, that's typical advice for any new business starting up. Invest what you can afford to lose. And not any more than that.
3. In-home senior care
Service: in-home, nonmedical care to older people
Founded: 1997
Number of franchises: 600-plus
Headquarters: Cincinnati
Investment costs: $47,150 to $86,400
Fit for 50-plus? As boomers get older, the need for services like Home Helpers will continue to expand. The business can be run from your own home, and there is not a lot of inventory to manage.
But: Business can be difficult because it touches on sensitive subjects, like age and personal independence. Employee turnover can be high.
Spotlight: Myles Showers, 71, Columbus, Ohio.
Ten years ago, a downsizing put Showers, a general plant manager, out of a job. He decided to buy a franchise, considered — and rejected — several retail services, partly because he was concerned about cash register stickups. He settled on Home Helpers.
At the start, he worked more than 40 hours a week. He built up the business, hired staff and bought four additional territories. Today he serves the entire Columbus metro area and works about 30 hours a week. On occasion, he's run his business from his laptop in Hawaii or in the middle of Lake Erie.
"I've had more fun the last 10 years, earning a living, than I ever had," says Showers. More importantly, he says, he's now financially ready to retire.
His advice: Have an exit plan. "Am I going to want to be doing this when I'm 82? Possibly, but I'm thinking maybe not," says Showers. He plans on eventually selling off his territories one by one and serving as a standby consultant to his buyers.
4. Auto finance
Service: used-car sales and financing
Year founded: 1989
Number of franchises: 130
Headquarters: Indianapolis
Investment costs: $671,000 to $5,180,000
Fit for 50-plus? The business is relatively quiet. Most of the action happens behind a desk, although there is plenty of interaction with customers.
But: The economy is troubled, and you're working with customers who haven't got the best credit.
Spotlight: Ward Griffith, 61, Baltimore.
Ten years ago, Griffith was a CPA with nearly 30 years in the business and wondering what he would do when he reached his firm's retirement age of 62. One day he joined two auto-dealer clients to meet with a representative from J.D. Byrider.
"At the time, I thought it was the stupidest thing I had ever heard of, loaning money to people who can't get traditional bank financing," says Griffith. But he ended up being "mesmerized" with the business and decided to buy a franchise.
Next July, he'll turn 62, happily employed as his own boss.
Griffith spent three years "working really hard" but now goes to the office when he feels like it. He vacations in Florida and Europe.
He and his silent partner have 30 employees and are planning to add a second location to their mini-empire in 2011.
His customers are "blue collar," he says, not nearly as smooth or sophisticated as some more affluent people he knows, "but I'd much rather work with them than ... lawyers I've dealt with."
He says it feels "tremendously good" to help people who couldn't otherwise buy a car.
His advice: Choose a business where there's not a lot of competition. Drive down any street and you'll see lots of fast-food restaurants, but not used-car finance companies.
5. Car service center
Express Oil Change & Service Center
Service: oil change and other auto service
Founded: 1979
Number of franchises: more than 170
Headquarters: Birmingham, Ala.
Investment costs: $300,000 to $1.5 million
Fit for 50-plus? Your staff oversees the cars; you oversee the business.
But: Investment costs are high.
Spotlight: Bill Ross, 64, Birmingham
Ross bought his first Express Oil Change franchise in 2000 as an existing business; he was able to keep his day job as a CFO for a manufacturing company. "I was looking for something to invest in, mostly for retirement," says Ross, who left his CFO position in March 2010.
He now has two centers and a third opening in April. He plans on sticking with the business for a while — "as long as my health holds out. Maybe another 10 years."
Ross now puts in 20 hours a week, much of it from his homes in Pensacola, Fla., and Birmingham.
His advice: Be patient. Most franchises are "not an overnight success, and you have to put some money into the operations."
Geoff Williams writes about business and personal finance. He lives in Loveland, Ohio.