From the February 2007 issue of Entrepreneur

Cities are booming again as suburbanites, fed up with high gas costs and long commutes, are flocking to city centers. These new downtown consumers need stores, restaurants and a variety of specialized services to meet their needs, says Nabil Nasr, assistant provost and director of the Center for Integrated Manufacturing Studies at the Rochester Institute of Technology in Rochester, New York. "[Entrepreneurs] have to look into the demographics in cities and look for opportunities to serve those communities," Nasr says.

After assessing the needs of the downtown St. Louis populace, Linda Loewenstein founded Niche, a fashionable furniture showroom, in 2004. At the center of a revitalized area, Niche's first-year sales passed $1 million, and 2006 sales surpassed $1.4 million. "It's been exciting," says Loewenstein, 46. "You feel like you're contributing to growing a neighborhood."

To expand your business to these growing neighborhoods, think about this varied demographic's special needs, says Vicki Kunkel, author of the forthcoming book The Velcro Effect: How to Master Mass Appeal. For example, because city dwellers need to maximize space, think small products, from storage to small pets. The new city dweller fits many profiles, but many are affluent, and generally they don't have kids, she notes. And if you have a downtown storefront, being within walking distance is a good selling point. Says Kunkel, "Many people are moving to the city for a renewed sense of community."