Founder and CEO of ERG Enterprises. Nationally recognized thought leader on entrepreneurship, investing and leadership.
You’ve built a viable business but are struggling to find your way. Maybe you’re focused on food service, fitness wearables, HR software, etc.
Your business is unique, but your need is universal. That need is growth, and the question remains where to find it. There’s no shortage of opportunities, but I think one in particular deserves your attention: senior living.
Consider the facts: Seven out of 10 seniors will need assisted living care in their life, a population that is expected to balloon to almost 81 million by 2040. Harvard’s Joint Center for Housing Studies forecasts that 12% of households will be headed by someone aged 80 or older, leaving them at risk of receiving the care and supportive assistance they may need.
That explains why my private investment firm launched a new fund to establish new communities throughout the country. We own and operate businesses in five different industries, but senior living has become a key focus in the past several years.
Here are four important reasons business leaders should consider targeting this industry.
1. Technology adoption is lacking.
Smart devices are in abundance. Today, we can monitor our vital signs with accuracy and ease. We can also track and automate the management of our living accommodations from anywhere in the world, at any time in the day. I can set the temperature for my parents on the other side of the country, not to mention help them find their preferred source of television entertainment.
Still, I’ve found that the technologies that we can find by simply taking a trip to the store have yet to find their way into senior living communities. Yes, adopting these innovations at scale present more difficulty than embracing them as independent consumers, yet the industry’s lack of technological progress remains head scratching.
And the problem isn’t isolated to senior-living communities. We lack an industry that can support a far greater segment of seniors who choose to age-in-place—whether out of necessity or desire. These individuals need the power of smart systems, but many have physical, mental or know-how limitations.
Both predicaments present a market opportunity for entrepreneurs in technology. We need innovations that providers can readily embrace and implement in their communities. We also need service providers who can install, configure and manage smart innovations for seniors who live at their personal residence.
2. Assistive services are in demand.
Senior living providers are being squeezed by the overwhelming demand for services and not enough resources to fulfill it. This spells opportunity for entrepreneurs running service-based businesses. Without the talent capital for directly and indirectly supporting senior living, operators must look to partners who can—for landscaping, healthcare and housekeeping, etc.
It also spells opportunity for senior-living operators beyond the supply-and-demand problem. Communities looking to compete in highly competitive and upscale markets can differentiate themselves by partnering with food service providers that can offer a premium culinary experience.
For service-based businesses, I think ignoring senior-living as a vertical will prove a bad idea. The math tells us that demand will outpace supply for many years to come, likely promising a lucrative and sustainable source of revenue.
If you’re a service-based provider, research the senior-living providers in your area, tailor your value proposition to their needs and contact them directly.
3. Human resources is a crucial need.
Turnover and insufficient recruitment are chronic issues for senior living operators. Almost seven in 10 assisted living providers report a significant or severe labor shortage. Between February 2020 and December 2022, skilled nursing facilities lost more than 200,000 workers, with staffing levels reaching their lowest point in nearly three decades.
That creates opportunity for businesses that specialize in the recruitment and retention areas of human resources. Who exactly stands to gain?
Technology providers that can digitally empower communities to expand their hiring pool and evaluation processes—or improve engagement with existing staff through benefit services. Staffing companies that can provide temporary relief to organizations in desperate need or provide a long-term alternative to conventional hiring arrangements. Any company with expertise in talent sourcing and management.
4. Healthcare is in desperate demand.
While labor remains a problem for senior living providers, healthcare looms as perhaps the most impactful and costly problem. Seniors remain the most at-risk population when it comes to healthcare issues, including chronic conditions. Nearly all seniors (85%) deal with one chronic condition. Having direct and efficient access to healthcare is essential.
Healthcare providers, including independent physician clinics, could benefit from partnering with senior living communities to serve them as an exclusive partner. For healthcare providers, competition for patients is significant, and this would provide a consistent and convenient channel for growth. After all, healthcare is a critical need in senior living communities and an essential service that assisted-living facilities don’t provide.
Senior living may be your next frontier.
Starting a business is hard. Growing one to viability is even harder. Success often comes down to choosing the right market at the right time.
To make the transition to senior living, entrepreneurs should take time to carefully research the industry. Leverage your network to make introductions, form partnerships or gain valuable knowledge.
Like healthcare, senior living is tied to geography. That’s why I suggest to also contact local associations, communities and those working in senior living—and look to partner where possible and mutually beneficial.
Throughout this process, it’s important to keep in mind the focus of your business and how it connects to the problems inherent in senior living. That’s the approach I leveraged. I dove deep into industry research, leveraged deep and existing relationships with commercial developers and operators, and actively opened a dialogue with senior living leaders in the communities I sought to serve. I only wish I had discovered this path sooner.
If you’re an entrepreneur, senior living could be the perfect space for your time, talent and capital. The industry has critical vulnerabilities and weaknesses, but it’s among the most important to our economic and societal well-being.
So don’t close your mind to the possibilities that senior living may present. Envision how you can make a difference. For your business, employees, clients and you.
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