Healthcare Industry – Franchises and Businesses
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Healthcare Franchise & Business Opportunities
Healthcare Industry
General Healthcare Industry
The Healthcare industry consists of companies that provide good and services such as medical services, manufacture medical equipment and drugs, medical insurance, and more. The industry facilitates the provision of health care to patients, treating them with curative, rehabilitative, preventive, and palliative care.
The U.S. Healthcare industry has an estimated revenue of over $1.6 trillion, of which 64% of it was generated by patient care. The industry has over 784,000 open firms and supports around 17 million jobs. In addition, the U.S. is the country that spends the most with health care, over $10,200 per capita. In addition, the industry accounts for close to 20% of overall gross domestic product (GDP).
Healthcare Industry Trends
Companies within the U.S. Healthcare industry prioritize medical technology, research, and innovation. Health care companies are now implementing payment models that help not only providers but also payers and patients achieve the best outcomes at the lowest cost. In addition, the industry is seeing a change in patient demographics and consumer expectations. Consumers are demanding transparency, convenience, access, and personalized products and services. Thus, companies are investing in technology, enabling increased financial independence for patients and improving interactions with their health care systems. Internet of Medical Things (IoMT) has being used to help streamline health care delivery and align it with changing consumer preferences while lowering the costs of operational and clinical inefficiencies by $100 billion per year
Key Healthcare Industry Numbers
The Paid-in-Full RateReferring to the SBA 7(a) Loan Program, how many businesses in a particular industry paid their SBA loans in full including interest relative to all the businesses in that industry. Note that many businesses are exempt from sharing their loan statuses as part of the nondisclosure exemption, and not included in the paid-in-full rate.[p1]… is when the SBA loan is fully paid off by the small business owner including interestA payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum, at a particular rate. In Vetted Biz, it is typically the additional rate of a loan a business buyer would pay off over time to borrow in purchasing a business…., indicating financial strength.
The Charged Off RateAlso can be referred to as the SBA Loan Default Rate, the charged off rate is percentage of businesses in set field (e.g. industry) that defaulted their loan, are unable to pay their loan in full, and/or there is no confidence that they will be able to pay back the loan…. is the SBA loan default rate where loans have no confidence in being paid off by the small business owner.
For every 16 SBA loans fully paid including interestA payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum, at a particular rate. In Vetted Biz, it is typically the additional rate of a loan a business buyer would pay off over time to borrow in purchasing a business…., 1 SBA loan was unable to be paid back, or defaulted.
*SBA Loan Data from 2010-2019
*Non-Franchise Businesses taken into account: 43,447
Franchises in the Healthcare Industry
The healthcare industry can be a secure investment opportunity as the demand is more of a need rather than a want in the U.S. population. Over 96% of the U.S. population over the age of 75 has a chronic disease, and needs additional support by healthcare providers. Senior Care Franchises Many seniors now prefer living at home rather than transitioning to a traditional nursing home, but will require extra care from home senior care. Businesses in the home senior care industry have grown over 4% per year since 2011.
Different types of businesses in the healthcare space include but are not limited to urgent care centers, hospice, and medical staffing. The healthcare industry will continue to grow as baby boomers enter the maturing age. Senior citizens are the fastest growing population segment in the U.S. The services provided can vary between specialized nursing care, medical staffing, living assistance, and more.
Healthcare Franchises: Urgent Care
Urgent care services have also grown as it is more convenient for patients who cannot wait and need immediate care, especially as there has been a shortage of primary care physicians. There will also be an increasing demand for urgent care centers as more people will be insured due to healthcare reform. According to IBIS World, the total revenue for urgent care centers in 2019 was $28 billion.
Healthcare Franchises: Medical Staffing
40Medical staffing has also become a growing subcategory in the healthcare industry. According to the World Health Organization, there was a shortage of 7.2 million healthcare workers in 2013, and is only expected to grow.
Healthcare Franchises Industry Cost and Analysis
At Vetted Biz, we have reviewed and analyzed over 2,900 businesses and franchises. For the businesses we have studied in the healthcare space, we have seen a range of investment amounts that can start at $2,000 and can go all the way up to $1,964,000. For these businesses, the average royalty fee is around 6.4% of the gross revenueThe total amount in dollars made in the business before expenses are deducted. See also Sales…., and the average marketing fee is 2.4%. When conducting the SBA analysis for the 7(a) loans disbursed from 1991 to 2019, franchises in the healthcare industry had a paid in full rate of 40.1% and a charged off rateAlso can be referred to as the SBA Loan Default Rate, the charged off rate is percentage of businesses in set field (e.g. industry) that defaulted their loan, are unable to pay their loan in full, and/or there is no confidence that they will be able to pay back the loan…. of 5.5%.
Average Healthcare FranchiseA franchise is when a business (franchisor) allows a party (franchisee) to acquire its know-how, procedures, processes, trademarks, intellectual property, use of its business model, brand and rights to sell its products and services. The franchisee signs a contract (franchise agreement) with the franchisor to acquire the franchise and generally has a territory granted to operate. What is a Franchise?… More Industry Percentage Fees
Standard Healthcare FranchiseA franchise is when a business (franchisor) allows a party (franchisee) to acquire its know-how, procedures, processes, trademarks, intellectual property, use of its business model, brand and rights to sell its products and services. The franchisee signs a contract (franchise agreement) with the franchisor to acquire the franchise and generally has a territory granted to operate. What is a Franchise?… More Industry Investment
This metric is the standard industry investment amount for a single unit franchise investment in this industry. Our research and analytics team analyzed over 80 franchiseA franchise is when a business (franchisor) allows a party (franchisee) to acquire its know-how, procedures, processes, trademarks, intellectual property, use of its business model, brand and rights to sell its products and services. The franchisee signs a contract (franchise agreement) with the franchisor to acquire the franchise and generally has a territory granted to operate. What is a Franchise?… More concept investment breakdowns in order to calculate this figure.
SBA FranchiseA franchise is when a business (franchisor) allows a party (franchisee) to acquire its know-how, procedures, processes, trademarks, intellectual property, use of its business model, brand and rights to sell its products and services. The franchisee signs a contract (franchise agreement) with the franchisor to acquire the franchise and generally has a territory granted to operate. What is a Franchise?… More Loan Data
The Paid-in-Full RateReferring to the SBA 7(a) Loan Program, how many businesses in a particular industry paid their SBA loans in full including interest relative to all the businesses in that industry. Note that many businesses are exempt from sharing their loan statuses as part of the nondisclosure exemption, and not included in the paid-in-full rate.[p1]… is when the SBA loan is fully paid off by the franchisee including interestA payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum, at a particular rate. In Vetted Biz, it is typically the additional rate of a loan a business buyer would pay off over time to borrow in purchasing a business…., indicating financial strength.
The Charged Off RateAlso can be referred to as the SBA Loan Default Rate, the charged off rate is percentage of businesses in set field (e.g. industry) that defaulted their loan, are unable to pay their loan in full, and/or there is no confidence that they will be able to pay back the loan…. is the SBA loan default rate where loans have no confidence in being paid off by the franchisee.
For every 10 SBA franchiseA franchise is when a business (franchisor) allows a party (franchisee) to acquire its know-how, procedures, processes, trademarks, intellectual property, use of its business model, brand and rights to sell its products and services. The franchisee signs a contract (franchise agreement) with the franchisor to acquire the franchise and generally has a territory granted to operate. What is a Franchise?… More loans fully paid including interestA payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum, at a particular rate. In Vetted Biz, it is typically the additional rate of a loan a business buyer would pay off over time to borrow in purchasing a business…., 1 SBA loan was unable to be paid back, or defaulted.
*SBA Loan Data from 2010-2019
*FranchiseA franchise is when a business (franchisor) allows a party (franchisee) to acquire its know-how, procedures, processes, trademarks, intellectual property, use of its business model, brand and rights to sell its products and services. The franchisee signs a contract (franchise agreement) with the franchisor to acquire the franchise and generally has a territory granted to operate. What is a Franchise?… More Businesses taken into account: 1,584
Sample Healthcare Franchise Income Statement
| Year 1 | ||||
|---|---|---|---|---|
| Base | % of Revenue | High | % of Revenue | |
| SalesThe total amount in dollars made in the business before expenses are deducted. See also Gross Revenue…. | $ 242,000 | 100% | $ 311,00 | 100% |
| Cost of Goods SoldAlso known as Cost of Sales, Cost of Goods Sold includes the direct costs associated with generating revenue. Depending on the business, it can be physical products, supplies, and/or payroll…. More | $ 121,000 | 50% | $ 155,500 | 50% |
| Gross ProfitThe profit a business makes after deducting the costs involved in making, providing, and selling the goods and services. In an income statement, it is the sales minus the cost of goods sold.Gross profit = Revenue – Cost of Goods Sold… | $ 121,000 | 50% | $ 155,500 | 50% |
| Expenses | ||||
| Rent | $ 12,000 | 5% | $ 12,000 | 4% |
| Utilities | $ 2,400 | 1% | $ 2,400 | 1% |
| Marketing / Advertising | $ 9,700 | 4% | $ 15,600 | 5% |
| Insurance | $ 25,200 | 10% | $ 25,200 | 8% |
| RoyaltiesFees paid by a franchisee to their franchisor in order to operate a franchise location. They are usually on a weekly or monthly basis…. More | $ 17,000 | 7% | $ 21,800 | 7% |
| Salaries / Wages | $ 29,200 | 12% | $ 29,200 | 9% |
| Repairs and Maintenance | $ 500 | 0% | $ 500 | 0% |
| All other expenses | $ 5,900 | 2% | $ 5,900 | 2% |
| Total Expenses | $ 101,900 | 42% | $ 112,600 | 36% |
| Owner BenefitThe amount of money a business owner receives before taxes from a business’s operations over the course of a year…. More | $ 19,100 | 8% | $ 112,600 | 14% |
| Net Profit MarginThe net profit margin shows how much a business is generating profit for every dollar of cost, expenses, interest, and taxes involved. It is displayed as the percentage of how much of each dollar collected by a company as revenue translates to net profit. The calculation is similar to gross profit margin, but the formula also subtracts expenses, interest, and… | 8% | 14% | ||
| Year 3 | ||||
| Base | % of Revenue | High | % of Revenue | |
| Sales | $ 564,000 | 100% | $ 787,000 | 100% |
| Cost of Goods Sold | $ 282,000 | 50% | $ 393,500 | 50% |
| Gross Profit | $ 282,000 | 50% | $ 393,500 | 50% |
| Expenses | ||||
| Rent | $ 12,000 | 2% | $ 12,000 | 2% |
| Utilities | $ 2,400 | 0% | $ 2,400 | 0% |
| Marketing / Advertising | $ 22,600 | 4% | $ 39,400 | 5% |
| Insurance | $ 25,200 | 4% | $ 25,200 | 3% |
| Royalties | $ 39,500 | 7% | $ 55,100 | 7% |
| Salaries / Wages | $ 58,400 | 10% | $ 58,400 | 7% |
| Repairs and Maintenance | $ 500 | 0% | $ 500 | 0% |
| All other expenses | $ 5,900 | 1% | $ 5,900 | 1% |
| Total Expenses | $ 166,500 | 63.9% | $ 198,900 | 25% |
| Owner Benefit | $ 115,500 | 19% | $ 194,600 | 25% |
| Net ProfitAlso known as net income or net margin, the net profit is the net income on an income statement. It is the revenue minus the cost of goods sold, expenses, interest, and taxes.Net Profit = Revenue – Cost of Goods Sold – Expenses – Interest – Taxes… Margin | 19% | 25% |
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Learn more about the Health Care Industry
Are you interested in owning a franchiseA franchise is when a business (franchisor) allows a party (franchisee) to acquire its know-how, procedures, processes, trademarks, intellectual property, use of its business model, brand and rights to sell its products and services. The franchisee signs a contract (franchise agreement) with the franchisor to acquire the franchise and generally has a territory granted to operate. What is a Franchise?… More in healthcare services?
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