Rent a Grandma will be jumping into The Shark Tank on Friday; the big question on everyone’s mind is will Grandma get funded or will she be a “meal” for the Sharks? Founded by Mr. Todd Pliss, Rent a Grandma is a terrific example of the best entrepreneurial strategy of all: find a need and fill it.
Todd was working as a tutor in Hollywood (one of the Jonas Brothers was a student) when he heard the Hollywood moms chattering about the lack of quality childcare available to them. Older, mature women seemed to be the answer to unreliable teens and twenty somethings, so he started what is essentially an employment agency to match “grandmas” with families who needed reliable childcare.
The concept met with immediate success. He soon had a stable of grandmas, women over age 50, serving families in the greater Los Angeles area. He promises his grandmas won’t “tweet or text” while watching the kids and he believes they have a much warmer, fuzzier image than the typical young babysitter/nanny. The grandmas enjoy the opportunity too, with the economy being what it is these days, many of the grandmas in Rent-a-Grandma’s employ welcome the opportunity to have regular work. The grandmas also do other chores like cooking, light cleaning, and pet sitting. Todd’s even selling Grandma style home made cookies on the Rent a Grandma website.
Rent a Grandma Featured Fox News
The business was started in 2010 and got a huge bounce when they were featured on Fox News. Todd was inundated with phone calls from grandma wanna bees, national news outlets, even the AARP. Oprah Winfrey’s people even approached him about a reality show based on the business. The most interesting development was the over 600 inquiries about franchising the concept that came from all over the country. Quick to recognize an opportunity, Todd set up a Rent a Grandma franchise program and currently has two franchisees with 15-20 in the works to come online this year.
Based on the preview video, it would seem that the margin for Todd’s LA based business is too low for the Sharks. I do believe they will be intrigued by the franchising concept, especially if Todd can show proof of more franchisees waiting in the wings. The “Oprah factor” may have some juice in this deal too- regardless of an Oprah produced reality series being on the table or not, The Sharks like stuff Oprah likes.
My guess is they get the dough and roll out nationally- any time you fill a need, you win.
You can watch the preview video HERE
When I was growing up, that was just about the only baby sitters around. Everyone had their Grandma taking care of them when their parents had to be away, and it was just a lot less the parents had to worry about. The cost was low, or didn’t exist, while the kids were all to happy to have Grandma stay with them for a day or evening or even a weekend. The best of all worlds.
I can see the margins being very problematic and I have not even seen the model. The minimum wage in Ca. is $8.00 an hour. That is the very least your labor cost can be. Add onto that insurance plus the cost of onboarding each new employee (background checks) I would put your price point at around $18.00 an hour in Ca.
At this price point you will most likely have a high end low volume product. That is fine (think Rolls Royce) if you have high margins.
Komfort keepers have a similar model offering care to the elderly. There though the market is huge and the clients have more disposable income. The market of people looking to pay 18 buck an hour to have someone watch their kids will be much smaller.
They may be some money to be made for the franchisor, but if you are a franchisee you will need to first buy in than pay your franchise fees each month. To me this business is a headache waiting to happen with a huge staff turnover rate and razor thin margins. Also if my wife came home and told me that she was turned down for a job that she was highly qualified to do strictly on the basis of her being to young my first call is to my lawyer.
I remember seeing a story about this. Great idea.
Find a need and fill it. Being a solution provider everyone should understand this is the key to get you where you want to go. Well said I loved it.
If she wasn’t a granny, wouldn’t we call that… prostitution…?
That’s a different business :/
Figures – now the extended family is being franchised. Wonder if it will happen in reverse.