How to Make Your Millions
Making a million is a milestone--the defining moment of success for many entrepreneurs and an attainable goal for those tapped into today's hottest trends. Entrepreneurs are keeping their fingers on the pulse of what's hot in today's marketplace. They are the trendsetters, the pioneers, the ones to watch as they lead the pack, followed closely by franchisors poised to capitalize on winning ideas and spread concepts nationwide.
Already dreaming about living the good life as a millionaire? We've compiled the most lucrative trends across seven industries. But keep in mind that regardless of the route you choose--whether it's going solo or buying a franchise--arriving at your first million in sales will require persistence, strategy and, in most cases, multiple locations. And in case you doubt it's doable, we got the scoop from savvy entrepreneurs who went from zero to a million.
Fountain of Youth
With the first baby boomers starting to hit 60, America is fighting tooth and nail to stave off the signs of time. In 2004, Americans spent about $44.6 billion on anti-aging products and services, according to Business Communications Co. Inc., an information resource company. But that's nothing compared to the $72 billion market it's expected to mature into by 2009.
Why the sense of urgency? Vanity is part of it, and the fact that we're living longer adds to the need for enduring youth. But there's also the fact that many baby boomers won't be financially able to leave the work force as early as their parents did and will have no choice but to stay vital and active, says Maddy Dychtwald, co-founder of Age Wave, a think tank focused on boomers and the aging of the population. According to a study by the National Association of Realtors, the median age at which baby boomers expect to stop working is 70, but 27 percent say they never intend to stop working. Dychtwald predicts that this will open up all kinds of opportunities to entrepreneurs--such as those who can create wellness centers and bring together a variety of health and nutrition specialists under one roof.
Jeni Garrett is one of those entrepreneurs providing a mind and body oasis to baby boomers desperate for rejuvenation. In 2001, after enjoying the benefits of spa visits herself, Garrett, now 28, founded The Woodhouse Day Spa, a luxury spa in Victoria, Texas. A year and a half later, she set her sights on turning the brand into a household name. She first planned to open more company-owned locations, but Garrett soon turned to franchising to spread the concept. "With our business model, you really need an owner/operator present because of the staffing issues and to do the marketing initiative," she says. "Franchising lent itself very well to that."
To move forward, Garrett knew the foundation had to be solid. She chose a top-notch franchise lawyer and streamlined operations, even ordering the fixtures for the franchisees. With her franchise system in place, she has positioned herself perfectly to accommodate the growing clientele of baby boomers. To further meet the needs of this segment, she added a menu of services that boasts 15 holistic, all-natural treatments that focus more on wellness than pampering. She is enjoying success with a multimillion-dollar business as more boomer women--and men--make the spa experience part of their lifestyles. Says Garrett, "We're seeing [spas] move from a level of luxury to a level of necessity for wellness."
The Sweet Life
The nation's sweet tooth is becoming more insatiable, driving everything from the franchising industry, where cookies and ice cream concepts are growing categories, to the fine-dining industry, where diners are staying more often for the grand finale.
Dessert has become such a significant portion of the food industry that it's warranted its own annual trade show since 2003. Meanwhile, according to Hudson Riehle, senior vice president of research at the National Restaurant Association, almost 1 in 3 fine-dining operators reported that consumers bought more desserts last year than in the two previous years. In an increasing number of cases, high-end desserts are stealing the spotlight, as entire independent restaurant concepts are being founded on the premise of tasty, upscale indulgence.
Paul Conforti and Kim Moore, 36 and 40, respectively, researched the restaurant industry for a year while attending Harvard Business School before they opened the doors to their first upscale, dessert-focused restaurant, Finale Desserterie & Bakery, in Boston in 1998. Offering an exquisite menu featuring Valrhona chocolate, honey caramel gelato, nougat mousse and cherry almond Florentines, they are often credited with the distinction of starting the first high-end dessert concept. Their focus is as much on high-quality ingredients as it is on the overall experience. Says Conforti, "Making sure [customers] have the best dessert of their life is important, but it's also about the atmosphere, service, background music [and] cleanliness of the restaurant."
They have since grown their restaurant concept into a $6 million-plus business and are about to open their fourth location this month. Planning to open three more locations in Massachusetts next year and to reach Washington, DC, by 2009, they are working toward their ultimate goal of going nationwide. With an idea as divine as upscale desserts, $1 million in sales can be achieved with only one location, and the proof is in the pudding: One of Conforti and Moore's locations makes twice that much annually.
Starbucks revolutionized the coffee industry by transforming the beverage into the most necessary of luxuries, but numerous independents and ambitious franchisors have profited from coffee's popularity and are riding on their own caffeine high. According to Rob Stephen, immediate past president of the Specialty Coffee Association of America, a coffee trade association, opportunities in the industry abound. In fact, according to the SCAA and Mintel Group, the industry grew to an estimated $12.27 billion last year. So if you thought Starbucks had the market locked down, think again--many are drinking in their own share of the profits.
Eric Schmidt, 43, is the owner of a Dunn Bros Coffee franchise in Lawrence, Kansas, and although he just opened his coffee drive-thru in March, he's already working on opening two more coffee kiosks and estimating total year-end sales to be in the low seven figures. While he believes he could have reached this point with his own coffee concept, he has no doubt that buying a franchise helped him avoid many of the initial difficulties. The wealth of information available to him and the one-on-one assistance with finding the right location enabled Schmidt to get off to an impressive start.
But in moving forward, the defining strategy for success has simply been Schmidt's own commitment and constant presence in the business and his community. From personally making sure that customers' needs are met to being involved in local civic organizations and the nearby university, Schmidt makes sure all his bases are covered. "That's probably the single biggest thing about it," he says. "You have got to be completely involved in it from the day you open [your] doors."
For those looking to establish their niche, Stephen identifies two trends taking place in the industry: product differentiation and point of view. In a market once defined by regular or decaf, coffee consumers now pay attention to the very farm where the beans are grown. Says Stephen, "You're seeing coffee labels growing to three lines."
Customers are also looking to retailers for opinions and overall expertise, so it is important for coffee entrepreneurs to be knowledgeable about the products they're selling. Stephen believes that quality products, knowledge, point of view and a good location are the defining factors of success for both independent coffee entrepreneurs and franchisees.
So what's ahead for the industry? Says Stephen, "We're seeing a renaissance in iced and frozen beverages as a way to get to a part of the market that's interested in soda or energy drinks."
While the industry to preserve vitality and youth among baby boomers is thriving, so are the businesses one generation ahead in the senior-care industry. Millions of Americans currently make up the "Sandwich Generation," a generation of people raising their children while taking care of their aging parents. This is already creating a demand for assistance, both medical and nonmedical, but that need will skyrocket as the baby boomers approach an age in which they, too, will need outside help. "People 65 and over will increase from 12 percent of the U.S. population to 20 percent by 2030," says J. Kevin Eckert, dean of the University of Maryland, Baltimore County's Erickson School of Aging Services. "It's almost a no-brainer that the whole need for senior housing, for adaptive housing, for all kinds of services, businesses and products will be burgeoning."
Topping things off, a large number of baby boomers won't have their own families to turn to for assistance. According to a 2004 U.S. Census report, 19 percent of women aged 40 to 44 were childless--twice the percentage reported in 1976.
Having watched his father struggle to care for his own brother, his aging grandmother and himself, Adam Brown was inspired to purchase a Home Helpers franchise. Getting the word out about his nonmedical and personal-care business was the most crucial step to securing his success. He did so by advertising, visiting local businesses and hospitals, and joining networking groups to educate the community about his services. Says Brown, 28, "This is a referral-based business, particularly because you're working with people's family members, so there has to be trust."
With 170 employees, Brown has positioned his franchise as a strong competitor in the Philadelphia area. After two years, he purchased a second territory and has since secured the "right of first refusal" for two other territories, which gives him first dibs before any other buyers. After working from home for two years, Brown has moved his business into an office, has just opened a satellite office and plans to open additional satellites in the future. Although having a physical presence isn't required, it has paid off: His franchise looks more established, and the neighborhood where the office is located is bringing in even more business. By reaching out to the community and expanding his territory, he has successfully grown his franchise to 350 clients and is projecting year-end sales of approximately $3.5 million.
Eckert sees a bright future on the horizon with the development of new homegrown communities where baby boomers can "age in place," as well as new services and technological products to help individuals remain at home. Says Eckert, "We're in for an exciting array of possibilities and real opportunities for people who are creative, innovative and have entrepreneurial sense."
Calling all geeks: Have you got a mind for technology and a passion for business? This could be the industry for you. If franchising is your tech dream, consider starting a tech support or consulting company--industrywide, franchise units in our most recent Franchise 500 grew 13 percent in 2006 over the year before. If you're a true maverick, though, you can jump into the exciting world of Web 2.0--where advances like social networks, blogs, podcasts, wikis, RSS feeds and the like have turned the dotcom business model on its head. Today, web innovators are coming up with better ways for end-users to share information and are creating applications and websites where shared video or user-generated content is king. Just a glimpse of the marketplace: The web gained a record 30.9 million sites in 2006--a 41.5 percent jump from a year earlier, according to data from research firm Netcraft. And according to data from Hitwise, in early 2007, visits to the top 20 social networking sites like MySpace and Facebook grew 11.5 percent in one month alone.
Although a lot of hugely successful companies are already out there, a startup can get in with the right niche. "The web is the great equalizer," says Jeff Stibel, CEO of Web.com, a provider of websites and services that has created over 4 million websites for small businesses. "It's the only place where a small business can compete nationally." He suggests starting a company with a great Web 1.0 foundation--a solid web address with an appealing design that works well for customers and first-rate search engine optimization to point users to your site.
Most important, though--fill a need. "If you say, ‘I'm going to do what Facebook or YouTube does,' it won't work," says Stibel. "But if you solve a market need, you conquer that niche and expand from there."
Conquering a niche is precisely what Greg Demetriades did when he founded WhiteBlox, an IPTV software suite, in 2005. The company sells IP video solutions so businesses can broadcast interactive IPTV content under the banner of their own brands. It's a subsidiary of his parent company, Continental Vista Broadcasting Group Inc., an IPTV provider that delivers interactive broadband TV content globally, started in 2003. Demetriades, 46, sells his WhiteBlox technologies to media, entertainment and sports-related companies--even contracting with the Indy Racing League to broadcast all its races online through 2009, including the famous Indy 500. "We allow [customers] to mix and match and build their own broadcast networks," he says. WhiteBlox also enables interactivity with tools for polls, contests, chats, forums, blogging and even sending live messages to the announcers at an event. Located in The Woodlands, Texas, the company projects 2007 sales of $16 million.
To make your mark in the tech space, be on the lookout for trends. Says Stibel, "It's a matter of keeping your eyes wide open."
If you're a pet lover, consider getting into the fast-growing pet products and services industry. Pets are a part of the family in 63 percent of U.S. households. In fact, in 2006, Americans spent $38.5 billion on pet products and services--a figure expected to rise to over $40 billion in 2007, according to the American Pet Product Manufacturers Association. Traditional pet lovers might consider a pet franchise business like pet grooming, pet products, pet walking or training. In fact, in our 2007 Franchise 500, the number of pet-related franchise units grew 23 percent from 2005 to 2006.
There are many niches in which to start your profitable pet business, according to APPMA president Bob Vetere. Natural and organic pet food is a particularly hot area, he notes. Much like in the human world, where green products are all the rage, green pet products are quickly gaining in popularity. "Any trend you see in human foods, about six months later, it pops up on the pet food side of the ledger," says Vetere. "This is what's happening with organics and naturals. It's finally dawned on marketers that the same person who's buying food for the family is buying food for the pet."
Convenience products are heating up as well--from automatic feeding devices and timed watering devices to automatic pet doors--anything that allows owners to have a busy lifestyle while still taking care of their pets is hot, notes Vetere. On the same convenience trend, consider pet services--pooper scoopers, for instance--to do the dirty work that many pet owners would rather pay someone else to do.
And just as moms buy top-notch products for their children, many pet owners are all about luxury for their precious pets. If it's high-end or a treat, pet parents will want it. That's what Janet McCulley, 39, and Georgia Goldberg, 44, found when they started Muttropolis, a chain of upscale pet boutiques based in Solana Beach, California. Janet McCulley, a proud pet parent herself to dogs Lulu, Sepia and Zoltan, knew she wasn't alone in wanting to pamper her dogs. She researched the market and opened the doors to her first store in 2002; four more locations and an online store have followed.
McCulley describes the business as "retail meets the dog park." Aside from offering upscale products such as Swarovski crystal dog collars and eco-friendly chew toys, McCulley designed special fixtures in her stores to appeal to the discerning pet lover. Photographic tiles on the ground look like grass, a fountain in the center is full of dog toys, and tree graphics on the walls complete the look.
Winning the "Hottest Retail Concept of 2006" award from the International Council of Shopping Centers was a coup, but it's at the monthly Mutt Meet-Up events, where owners bring in their pets for fun and mingling, that McCulley sees the fruits of her success. "We have created a brand that resonates emotionally with the pet parent," she says. With 2007 sales projected at more than $4.5 million and plans to open 150 more locations within the next five years, Muttropolis is sure to become a household name among the two- and four-legged alike.
Marketing and Advertsising
Companies always need new clients, so if you've got a knack for getting customers to buy, think about starting a marketing and advertising business. Aspiring marketers can go the franchise route with diverse opportunities ranging from direct mail and coupons to promotional products and outdoor media.
But if you want to be a trendsetter, check out the online ad marketplace. It's a booming market--online ad spending alone hit $16.9 billion in 2006, a 35 percent leap from 2005, according to a joint report from the Interactive Advertising Bureau and PricewaterhouseCoopers. Trends shaping the industry include the use of audio and video technology in online marketing campaigns as well as integrating online and offline marketing for clients, notes Chip Cummings, a marketing consultant and author of Stop Selling and Start Listening! Marketing Strategies That Create Top Producers. "It's not just being on top of the technology, because the technology itself isn't going to sell anybody products or services," Cummings says. "It's the creative use of that technology."
Finding a creative use of technology is exactly what has catapulted Blue Lithium Inc., an online advertising network in San Jose, California. Founded by Gurbaksh Chahal in 2005, the company provides specifically targeted marketing for clients, using data from 145 million consumers worldwide. "That [online] advertising model is focused on display media--banner ads, [etc.]. The model I wanted to recreate was using different ways to add data and using data to create sophistication around individual users," says Chahal. "So when you're serving an ad, it's actually relevant to that user--because you know they're male or female or you know something about their lifestyle through different data sources you can aggregate over time."
Chahal's expertise in providing targeted online ads has grown his startup at least 100 percent per year, pushing 2007 sales projections to nearly $100 million. Working with clients like Anheuser-Busch, Best Buy and Verizon, Chahal, 25, is looking to grow his company into international markets such as Germany, Italy and Spain in the near future. Staying ahead of this rapidly changing market is the order of the day. "You've got to make sure you continue to evolve with it and [that] you're evolving faster than the industry is evolving," says Chahal. "Every couple of years there's a bigger company out there. Before it was Yahoo!; now it's Google. There's a trend going on, and whoever is creating the trend ends up being the winner."