Top 10 Businesses For 1997
Over the last 12 months, we've charted remarkable growth in 10 booming industries that are yielding some of the fastest-growing small businesses. To illustrate this growth, we've compiled staggering statistics and interviewed enthusiastic entrepreneurs in all 10 fields to show you just how hot they really are. So dive in, read up and get started!
So far, the '90s have been the decade for exporting. Exports of goods and services have been responsible for more than 40 percent of U.S. economic growth in the past five years, according to Nancy Larson of the Small Business Administration's Office of International Trade.
Contributing to this impressive growth is Steve Macri, owner of S&S Seafood Ltd., a live-lobster exporting company in Northwood, New Hampshire. "I was in Germany in 1988," remembers Macri, "and I treated a friend to a lobster dinner, expecting it would cost about $15.95. So when the bill came and I saw the $100 price tag, I realized there was a tremendous gap in the market that needed to be filled."
Macri started his exporting business two years later with only $5,000 in start-up capital. Today, the business exports between 35 and 40 thousand pounds of live American lobster to Europe each week, grossing close to $10 million in sales annually.
S&S Seafood Ltd. is a cooperative company that represents five local lobster dealers from the Northeastern seaboard. Sales are made to European importers and distributors, who then sell the lobsters to upscale restaurants in England, France, Italy, Switzerland, Spain and, not coincidentally, Germany.
"A lobster can live 48 hours out of water, so we transport them by air, packed in boxes filled with ice and seaweed, then re-tank them when they arrive in Europe," explains Macri. The journey from Atlantic ocean to European restaurant generally takes from three to seven days.
Because the lobster-exporting industry tends to have a fiercely competitive and seasonal market, S&S Seafood Ltd. places particular emphasis on their customer relations. "All companies have to sell lobsters at about the same price, so customer service and personal attention are what make the difference for a good operation," says Macri. "Because of the attention we pay to customer service, about 99 percent of our business is repeat."
At least twice a year, Macri and his three co-workers visit their customers in Europe to ensure that operations are running smoothly. The trips abroad may not be necessary, says Macri, but it is this personal attention to detail that has enabled S&S Seafood Ltd. to grow into such a successful international business. "It all comes down to this," concludes Macri: "Good business is still done person to person."
SBA's Office of International Trade, 8th Floor
409 3rd St. SW
Washington, DC 20416
From 1991 to 1995, the Direct Selling Association charted a 38-percent growth in direct-retail sales, and an increase of 41 percent in the number of people involved in the industry. Now, in 1997, the opportunities in the network-marketing industry-where products or services are sold through a network of distributors-are greater still.
Randy Sue Weiss, a representative for The Pampered Chef, a company that sells unique kitchen and cooking utensils, has witnessed a decade's worth of growth in the direct-selling industry.
"Ten years ago, I was a new mom looking to get a nursing job, and I stumbled across an advertisement for The Pampered Chef," says Weiss. "Little did I know that this would become a business where I would generate an income of well over six figures."
Today, Weiss is a senior executive director, the highest level in The Pampered Chef's sales strata. "When I first saw the products, I got so excited, thinking 'I want this and I want that,' " recalls Weiss. "I thought that if I felt that way, then maybe other people would, also. After all, everybody has to eat, whether they like to or not, and sometimes that means having to cook."
Some of The Pampered Chef's most popular specialty kitchen products include: baking stones, used for baking cookies and bread, which absorb moisture from the items being cooked to make them crispy without frying; the lemonaide, a spigot device that's inserted into a lemon to extract juice without seeds; and the food chopper, which chops vegetables quickly-a convenience Weiss believes encourages customers to eat veggies more often.
"We're the kitchen store that comes to your door," says Weiss. "It's really a great opportunity for people, whether they're involved full-time or part-time."
Direct Selling Association
1666 K St. NW, #1010
Washington, DC 20006-2808
Financial forecasters have been known to say that the first indication of an economy on the upswing can be seen in the public's travel expenditures. If so, the U.S. economy looks like it's getting better all the time.
"Travel has become much more of a staple product for Americans," says Shawn Flaherty of the Travel Industry Association of America (TIA). In fact, TIA estimates that travel volume, the total number of trips taken by Americans, increased 45 percent from 1985 to 1995, while the size of the U.S. population grew only 10 percent during the same time period.
"We consider the growth of adventure travel to be part of the trend toward niche marketing," says Flaherty, "in which many companies are able to tailor their product. Nowadays, people can search lists that describe people's preferences and habits, so they can target very specific markets."
One of the specific travel markets most commonly being targeted is the adventure tourism market-with a particular emphasis being paid to mountain biking. But this is no secret to Jared and Heather Fisher, who operate Escape the City Streets!, a mountain-biking and hiking adventure touring company in Henderson, Nevada.
Started as a marketing project in 1992, when the Fishers were students at the University of Nevada in Las Vegas, Escape the City Streets! has since taken more than 8,000 travelers on mountain-biking and hiking excursions. "We initially wanted to do bike tours out of Las Vegas, marketing to conventioneers," says Jared. But when their local, one-day trips started filling up faster than they could schedule them, they soon expanded to multi-day, out-of-town trips to Southern Utah and the Grand Canyon.
Despite their commendable growth, the Fishers' business is still a very bare-bones operation. "We produce our own in-house brochure, scout all the locations, plan the routes, and get the required permits," says Jared. On the trips, the Fishers and up to eight other tour guides lead the biking and hiking tours and even do the outdoor cooking. "Most people in our company sooner or later wear every single hat there is to wear," he continues, "except the financial hat, because we have an accountant who wears that one."
Travel Industry Association of America
1100 New York Ave. NW, #450
Washington, DC 20005
Web advertising revenues totaled nearly $312 million in 1996, estimates AdSpend, a World Wide Web advertising tracking service of New York City-based market research firm Jupiter Communications. "It's expanding fast," says Peter Storck, group director for online advertising at Jupiter Communications. "Revenues for advertising are on track to reach Jupiter's projection of $5 billion by the year 2000."
The majority of these advertising dollars are spent on ads placed at frequently visited Web sites. With more than 42 million adult Americans currently online, the Internet is gradually positioning itself as a powerful advertising medium-and a great place to start up a business. Because of this growth potential, Web-site designers are flocking to the Internet to stake their claim in the booming cybermarket.
Raj Khera has experienced this growth firsthand. As the owner of Khera Communications, a Rockville, Maryland, firm that designs Web sites and sells online advertising, Khera garnered sales of nearly $600,000 in 1996.
When he started his business in 1994, Khera invested just $10,000 in networking equipment and a UNIX server to host the Web-site information necessary to create an online presence. Then, with the assistance of his brother, Vivek, Khera launched his first Web site.
Since then, he has created a number of Web sites, including GovCon (http://www.govcon.com), which features the latest bidding opportunities and regulations for obtaining government contracts.
The Web-site-design industry has changed since Khera started his business. "When we first got started, you had to know a bit of programming to set up a Web site," he recalls. "But now you don't have to know as much. There are tools out there that make it easy for people to set up their own Web sites." But even this ease-of-use for the general public doesn't put many Web-site designers out of work; for people who are either too busy or too overwhelmed to learn new software, Web-site designers can be an essential source of assistance to create an online business presence.
"Web sites have become the modern equivalent to a full-color brochure," says Khera. "Consultants, small manufacturers, product retailers and financial services are all able to use our services."
Internet Developers Association
According to Rob Hainsworth, CEO of the National Child Transport Association (NCTA), the child-transport industry is gaining momentum as never before; NCTA's membership increased threefold in 1996 alone.
"Based on the calls we receive, we estimate that there are about two new kids' transportation businesses starting up each week across the country," says Hainsworth. "Our records also indicate that there are now kids' transportation businesses operating in 44 states."
Yvette Betancourt, owner of The KidMover Inc., a child-transport service in Miami, was initially interested in the industry as a consumer. "As a mother with young children, I found that there was nobody who could guarantee that my children would be able to ride with a car seat," says Betancourt. "I heard about the kid cabs that were popping up across the country, and thought it was a much-needed concept."
So, in February 1996, after conducting demographic market research and finding an affordable insurance plan, Betancourt quit her job as a hotel-marketing manager and started her own business with one van and one passenger. By the next month, she had purchased a second van, hired another driver, and had a customer list of 25 scheduled riders.
"Every parent I spoke to believed in the concept because they, too, needed the service," recalls Betancourt, whose operation now consists of six vans which deliver more than 100 students to school, day care, soccer practice and orthodontist appointments. Rider contracts are established for a semester at a time: One-way daily service to or from school costs $150 a month, while round-trip service is $230 monthly.
All of The KidMover Inc.'s vans are equipped with hand-held, two-way radios, allowing the drivers to be in constant contact with a main-office dispatcher, who can troubleshoot for the driver by calling parents to confirm scheduling cancellations or see if the child is running late.
"I have a responsibility which I take very seriously," says Betancourt. "Parents are often shocked when I call to confirm their children's schedules. But we really care about the kids, and I think the kids and their parents know that."
National Child Transport Association
381 Hidden Valley Dr.
Naples, FL 33962
Medical house calls may be a thing of the past, but when it comes to taking care of many Americans' dearest possessions-personal computers-everything old is new again.
Home doctors, consultants who make house calls for computers, are especially hot, says Joyce Burkard of the Independent Computer Consultants Association (ICCA). "If you think about it," says Burkard, "most homes have a computer these days, whether for personal use or for business. And how many of those computer owners know how to fully operate and maintain their machines?"
Not many, which is great news for those in the know about computers. Arthur Ellingsen, owner of Arthur Ellingsen & Co. in Arlington Heights, Illinois, is an independent computer consultant who has made a great business for himself by helping those in need with their computers.
As personal computers skyrocketed in popularity in the early '80s, Ellingsen was employed by a large firm as a PC specialist, doing part-time consulting on the side. "When I found that I was earning as much from my part-time assignments as I was from my full-time job, my part-time business turned into my full-time income," says Ellingsen about his transition from corporate employment to entrepreneurship.
An independent computer consultant since 1983, Ellingsen has seen an increase in the number of house calls he makes. "About 50 percent of my projects are now home computer doctor assignments," says Ellingsen, "but they generally last only a day or two. Other jobs, such as implementing a financial system for a large company, can last five or six months at a time."
Describing some of his typical house calls, Ellingsen says, "Sometimes, when clients purchase a new piece of software or install a new piece of hardware, they get it running and find that other applications no longer work. Various other errors also often come up that they just can't understand. That's when they call me."
Attorneys, college students and small-business owners have all benefited from Ellingsen's computer expertise. "There are four basic ways that I find clients or they find me," explains Ellingsen. "The first is through the Yellow Pages. The other three ways are through trade shows, mailing lists and referrals-both from previous clients and contacts at the ICCA."
Independent Computer Consultants Association
11131 S. Towne Sq., Suite F
St. Louis, MO 63123
Continuity companies, more commonly known as "of-the-month" clubs, have grown in popularity among gift givers and business owners, according to the National Mail Order Association (NMOA).
"Most products can lend themselves to this type of marketing," says John Schulte, chief manager of the NMOA. "You could take almost anything-even jigsaw puzzles-and turn it into an of-the-month club."
Mail order entrepreneurs nationwide are tapping into the unique marketing potential of making sales to a membership of clients on a repeat, regular basis. "There's a uniqueness in giving a gift that keeps on giving," says Doug Doretti, who, with his brother, Dirk, started Clubs of America Inc. in 1994. "We thought about localized products that needed national distribution. And then we thought to ourselves, 'Why not deliver unique items right to the customer's door?' "
The first branch of Clubs of America Inc. was the Great American Beer Club, which now provides nearly 9,000 members with hand-crafted microbrews from small breweries across the country each month. Since the success of the beer club, the Doretti brothers created the Worldwide Cigar Club and the Gourmet Pizza Club, as well.
"We envision Clubs of America Inc. to be the customer's one-stop shop for a whole variety of unique products that are delivered on a monthly basis," says Doug. "So, after three years in business, we're beer, cigars and pizza. In another three years, it could be beer, cigars, pizza, coffee, tea, herbs, cookies, etc. It could be anything, really. We want to position ourselves as a well-diversified company, fit for every demographic."
But not every item will produce successful results using the continuity sales format. The key, according to the Doretti brothers, is to offer your customers something out of the ordinary-something they can't go out and pick up for themselves at the corner store.
Finally, first-rate customer service, say the Dorettis, is tantamount to success in this industry. "Word-of-mouth is very big in this business," says Doug. "If you don't deliver on time, or send that gift letter out, people aren't going to buy from you again so quickly. It's important that you maintain your reputation-with both customers and suppliers-because it will control your destiny."
National Mail Order Association
2807 Polk St. NE
Minneapolis, MN 55418-2954
Here's a pinch of sage advice: If you've got a green thumb and a mind for business, the thyme is right to start an herb-farming business. "Consumption of herbs is up 10 to 15 percent," says Maureen Rogers, director of the Herb Growing & Marketing Network in Silver Spring, Pennsylvania.
"As the general public becomes more and more interested in and accepting of alternative health remedies, we're finding a larger number of people taking natural supplements, most of them plant-based," says Rogers, who has also witnessed an increase in the number of people interested in getting into the business side of the industry. "We had requests for information from well over 1,000 people in 1996 alone," says Rogers, "about 25 percent of whom started up a business."
Becca Prager, director of Urban Herbals, an offshoot project of the San Francisco League of Urban Gardeners (SLUG), has helped to turn herb farming into a successful community-based project for teens.
"SLUG has built more than 100 gardens throughout the city, located in women's shelters, hospitals, schools, recreation parks, public housing developments, and nursing homes," explains Prager. "Urban Herbals employs more than 100 teenagers every year who work 10 hours a week during the school year and 20 hours a week during the summer to produce a selection of herbal vinegars: Spicy Tarragon, Balmy Basil, and Mediterranean Red Wine."
The teens, who learn all of the different steps of gardening-including soil preparation, planting, watering and harvesting-currently grow about 25 percent of the herbs used to make the products, including tarragon, oregano, basil and garlic. Prager estimates that more than 5,000 units of herbal vinegar were produced by the Urban Herbals program in 1996-the profits from which went directly back into growing the community-based program.
Raichele Richardson, an 18-year-old who has been with Urban Herbals for almost three years, now works there full-time. "When I first came here, there was no such thing as Urban Herbals," says Richardson. "Then we started with the vinegars, and it grew into producing fruit jams, as well."
"We'd like to foster a base of self-reliant teens who can operate a small factory where we're creating new products," concludes Prager, "and grow this into a sustainable business."
Herb Growing & Marketing Network
P.O. Box 245
"With all of the changes in health care, the emphasis now is on the bottom line," says Pat Forbis, associate executive director of the American Association for Medical Transcription (AAMT). "In an effort to cut expenses, many hospitals have begun to outsource their transcription responsibilities, so a lot of new medical-transcription businesses are starting up."
No longer are just physicians privy to the convenience of dictating patient medical records; now, dentists, chiropractors and even veterinarians are starting to dictate records, creating a competitive playing field for medical transcriptionists, who transform these dictated records into written copy. The records are then used to bill insurance companies, as evidence in a court of law, and as a source for continuing patient care-whether for humans, canines or felines.
Pat Lowery Segura, owner of Physician Assistant Transcription Service (PATS) in Houston, started in the medical-transcription industry in the early '70s, and now runs her own transcription service from her homebased office, transcribing records for a local hospital and a general family-practice clinic.
"I guess, after 25 years, I'm just hard-headed and set in my ways, so I decided to do my own thing," says Lowery Segura. "I like working for myself and calling my own shots. I like using the software and equipment that I want to use."
A certain amount of independence is indeed available when operating your own medical-transcription business, but knowing the industry vocabulary is essential for operation; schooling and dedication are both needed to succeed in this field. AAMT recommends a two-year training program, which includes the study of pharmacology, disease processes, anatomy and physiology.
"You've got to lay the groundwork for this kind of business," stresses Lowery Segura. "You can't go from being an executive secretary at some oil company to doing transcription. Clients aren't paying us for our keyboarding skills, they're paying us for our medical knowledge. In addition to knowing the terminology, you've got to be good at spelling and linguistics, and, if you work in a multicultural part of the country, you've got to have an ear for accents."
American Association for Medical Transcription
P.O. Box 576187
Modesto, CA 95357
Busy diners across the country are having their favorite restaurant dishes delivered to them in record numbers: The National Restaurant Association shows a marked increase in the number of restaurants sourcing outside delivery services. According to a recent study, about one out of 10 tableservice operations had meals delivered by an outside service in 1995, compared with practically no operations at all in 1992.
More restaurants have started to offer what has recently become known as "home meal replacement," to assist busy customers by bringing their meals directly to their front doors. In addition to being delivered to patrons' homes, restaurant meals are also being delivered to the workplace-to accommodate convenience-driven consumers who are working longer hours.
As the owners of A La Carte Express in Washington, DC, Russell Winter and Martin Scholl see both types of clients. "Basically, everybody eats," says Winter, who witnessed a 15 to 20 percent increase in business in 1996. "They eat when they're at work and they eat when they're at home. Because we're in downtown Washington, though, we get a lot of office work, which tends to be profitable because they're usually larger orders."
Started in 1990 by making deliveries on Capitol Hill, A La Carte Express now delivers food from about 90 Washington, DC, restaurants. "We sell the food at the restaurant's menu price, and we buy it at a discounted price, which is usually a fixed percentage," explains Winter. "So the restaurants are the wholesalers in their relationship with us, and we are the retailers."
Customers are also charged a delivery fee which ranges between three and 12 dollars, depending on the distance the driver must cover and the price of the order being delivered. "We've divided the city into about 24 zones," Winters explains. "The cheapest delivery is if you are in the same zone as the restaurant."
With an office staff of 15 and a rotating delivery staff of more than 35, organization and efficiency are two essential ingredients in A La Carte Express's recipe for success. "Communications are also very important to us, so we have two-way radios and alphanumeric pagers for the delivery staff," says Winter. "We try to make it as efficient as possible, because when we get busy, everything happens at once."
National Restaurant Association
1200 17th St., NW
Washington, DC 20036-3097
A La Carte Express, P.O. Box 21543, Washington, DC 20009, (202) 232-8646.
Arthur Ellingsen & Co., P.O. Box 1273, Arlington Heights, IL 60006-1273, (847) 506-0555.
Clubs of America Inc., 480-C Scotland Rd., Lakemoor, IL 60050, (815) 363-4000.
Escape The City Streets!, P.O. Box 50262, Henderson, NV 89016, (702) 596-2953.
Khera Communications, 2400 Research Blvd., #250, Rockville, MD 20850, (301) 548-4363.
Physician Assistant Transcription Service (PATS), 8111 Edgemoor, Houston, TX 77036, (713) 771-4476.
S&S Seafood Ltd., RR-2, Box 3196A, Northwood, NH 03261, (603) 942-7925.
The KidMover Inc., 10691 N. Kendall Dr., Miami, FL 33176, (305) 595-KIDS.
The Pampered Chef, 70 Clermont Ln., St. Louis, MO 63124, (800) 455-0002.
Urban Herbals, 2088 Oakdale Ave., San Francisco, CA 94124, (415) 285-7584.