NEW YORK (CNN/Money) -
Business owners strive to aim their goods or services at growing markets. If their targets have significantly more potential customers every year, it increases their chances for success.
That's why many businesses have targeted the vast, 77 million-strong baby boomer generation.
But the baby boomers stand on the threshold of a big change. The oldest of them are nearing their 60th birthdays and their needs and wants are in flux. Their purchases will begin to revolve more around health care and housing than on rock and roll and athletic gear.
All businesses must adjust to these changing demographics and franchise operations are not immune. Steve Hockett, of franchise business referral consultant FranChoice, says, "Many new franchises are springing up to meet the needs of an aging population. In the future, health franchising will be huge."
At one time, a franchise broker, most franchise companies sold products like hamburgers or hotel rooms. That is changing.
"Today, what we're seeing is a boom in the service area," says Thom Crimins of FranNet,.
He cites two main factors for this:
- Two family incomes common among boomer couples provide ample income but little time for routine household chores. Service franchises can take up many of the tasks that couples used to do themselves.
- Beyond elder care. An increasing number of the elderly couples and singles are living fulfilling lives on their own. As they age, however, they may require more and more services to help them deal with day-to-day living.
Some of the most successful franchise businesses of the next few years will be ones that will provide cost-efficient services, both medical and non-medical, for the aging population of the United States.
A man's home . . .
That is not to say that manufactured goods will not do well, but the mix of products people buy most of will change. Much of that change will be driven by the fact that more Americans own homes (69.1 percent, up two percentage points in the last five years and nearly five percentage points since 1995, according to the Census Bureau) than ever before.
The ranks of homeowners will almost certainly expand further over the next few years.
Home ownership peaks among Americans at around age 60, according to Doug Duncan, chief economist with the Mortgage Bankers Association, when about 80 percent of Americans own their own homes. The rate for boomers is still only about 70 percent, which means more boomers may soon join the homeowner ranks.
Along with the real estate boom has come a trend toward bigger, more luxurious, and better furnished houses. Crimins says many Americans have turned inward; they have gotten increasingly more interested in building a comfortable home environment.
This "cocooning" includes increasingly posh home amenities. Granite counter tops, stainless steel appliances, and home theaters, are all part of the trend and businesses offering cocooning goods or services are sitting in a sweet spot right now that should only grow bigger as the number of affluent home owners continues to swell.
Plus, many boomer couples are starting to face the empty nest syndrome for the first time. "We're shoveling the kids' stuff out the door," says Crimins "and looking at new carpeting, furniture, and other home furnishings."
Aging Americans and homeowners are two of the most important of the many growing demographic groups in America. As these groups expand, businesses will arise to provide goods and services tailored to these needs and desires.
Click here to see a few franchise operations expected to benefit from growing target markets.