From the April 2008 issue of Entrepreneur

When toddler Kayla Peri was diagnosed with multiple chemical sensitivities, her dad, Jeff, commenced a search for all things nontoxic, including a carwash. Lisa, 37, sent her husband off with a wisecrack: "While you're at it, see if they have a waterless carwash."

Talk about a watershed moment. Jeff, 39, actually did find spray-on, waterless carwash products--but they all had chemicals. Working off a hunch and $100,000 in investments from family and friends, Jeff, who is now president of Lucky Earth LLC, and Lisa, its CEO, developed an organic version with a chemist: When sprayed on, Lucky Earth "Waterless" Carwash emulsifies and lifts dirt from a car's surface, which can then be wiped down--water-free.

The Inglewood, California, company, which launched last June, projects sales of $2 million this year. "It's all happening so fast," says Lisa, who credits a "perfect storm of circumstances" for their rapid success. One circumstance is market need: Cities both in the east and west--beset by water shortages and runoff pollution--have considered or have already imposed restrictions on residential car washing.

And the market is poised to expand. According to a study released by the EPA, 36 states anticipate water shortages by 2013. "Increasingly, communities are realizing that the best 'new' source of water is actually better conservation," says Steve Maxwell, managing director of TechKnowledgey Strategic Group, a water industry management consultancy. "You can see entrepreneurs tapping into this shift toward conservation everywhere these days."

Take the bathroom, where the toilet accounts for 30 percent of residential indoor water consumption. Louisville, Kentucky-based WaterSaver Technologies developed the Aqus system, which recycles sink water into toilet-flush water, reducing water usage by up to 5,000 gallons annually. In landscaping--a particularly hot sector, according to experts--Houston-based water management consultancy WaterLogic installs efficient watering technologies to help its increasingly eco-conscious clients save water and cash.

Says Maxwell, "There's no doubt that as water becomes scarcer, any business that creates more efficent uses of water will have a market."