Home-based service businesses offer a relatively affordable alternative for those in career transition or working through retirement.
Jamie Schlender doesn’t think he’ll ever stop working, and he certainly wasn’t ready to when he got laid off from his management job in a 2011 corporate reorganization.
He looked for similar jobs but opportunities dried up, it seemed to Schlender, when companies found out his age, then 55. With a wife, a daughter starting college and another at home, however, he had to keep making a living.
Schlender’s solution was business ownership, in the form of a Novus Auto Glass repair and replacement franchise that he bought two years ago.
“I’ll work in one form or another until I die, probably,” said Schlender, now 57. “I’m kind of wondering about retirement and not sure how that’s going to work out for me. There is a lot of potential, and I’m thinking of maybe in a year or two hiring people to do the work and then running the marketing and the rest of the business. That would basically be my idea of retirement.”
Consultants play key role
Schlender bought his franchise with advice from Mike Accurso, a Twin Cities-based franchise consultant with the Entrepreneur’s Source, a national franchise and business consulting company that uses what it describes as an education-based method to help clients identify franchise opportunities. Clients pay no fee; consultants such as Accurso receive placement fees from franchisers.
Franchises offer an often-overlooked option for those seeking a post-corporate livelihood, a way to finance retirement or a source of income to reduce pressure on retirement savings, Accurso said. As the slow recovery continues, Accurso said, some are turning to franchises not only for income but also to manage working hours, to give back or to have something meaningful to do every day.
“When you talk to people today, their vision of retirement isn’t what it used to be,” Accurso said. “They want options; they want to be in control of their schedule and their income. A lot of retirement now is about control and flexibility.”
Part of Accurso’s work involves dispelling myths about franchises. They offer more than “tacos and hamburgers and oil changes,” he said.
A growing number of home-based service business franchises don’t require storefronts or employees and don’t involve food or retail, Accurso said. Many home-based franchises are available for a total investment — franchise fees, start-up costs and operating capital — of $50,000 to $100,000, making them more affordable than many people assume.
Financing for 60 percent of his clients comes from 401(k) rollovers invested in their franchises, Accurso said, a transaction that other consultants can help carry out. (Consult a tax expert or other professional adviser).
Finding the right franchise
Also important, Accurso said, is finding a franchise that is the right fit for the client’s interests and goals. A franchise buyer doesn’t necessarily have to know anything about the business. Franchisers offer training and support to help navigate some of the risks of starting the business.
“I want to know what they’re passionate about, although that may not have anything to do with the specific business,” Accurso said. “There are certain transferrable skills that people have … I try to find out what those skills are and match them up with the skills of the business.”
Finding the right match mattered to Bill Kuros, who worked with Accurso to buy a Budget Blinds franchise in March 2012. Kuros struck out on his own after his former employer was sold, leaving his future uncertain. He now oversees the business side of his blinds franchise while a contract worker does installations.
Franchise consultant Bill Fruen, who works with Eden Prairie-based consulting company FranChoice, said the pace of franchise buying rose last year after slow going since 2008.
“In many cases, they’re looking for some escape hatch from the corporate world, something they can operate concurrently with their job and then move into on a permanent basis. Or they want to quit their current job altogether and start the next chapter,” Fruen said.
The expert says: Mark Spriggs, associate professor and director of the Schulze School of Entrepreneurship at the University of St. Thomas’ Opus College of Business, said “corporate refugees” are driving business for franchisers.