How to Make Your Millions

Coffee

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."

Seniors
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."

Tech
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."

Like this article? Get this issue right now on iPad, Nook or Kindle Fire.

This article was originally published in the September 2007 print edition of Entrepreneur with the headline: How to Make Your Millions.

Loading the player ...

Tim Ferriss on Mastering Any Skill

Ads by Google

Share Your Thoughts