The time has come. You need to walk into your boss's office, throw down your resignation letter and tell him, "Take this job and sho"--well, maybe don't go that far. Former bosses can make wonderful first clients. Nevertheless, 2002 is going to be your year, the year when you realize you've waited long enough to start your dream business and you actually go out and do something about it.
We'll help you with your first step--finding the perfect business idea. This year, service businesses are reigning over our list of the 10 hottest business ideas for 2002. From computer consulting and referral services to personal training and financial planning, busy folks are still hankering after people who can make their lives easier and make their businesses run smoother. But for those who'd rather sell a product than a service, don't worry--we've got you covered as well.
Consulting is one of those businesses that most people aren't too familiar with. They know the term, but really, what do consultants do all day long? What do you consult about? We'll clear up the confusion: According to Merriam-Webster's Collegiate Dictionary, a consultant is one who gives professional advice or services, an expert. It's one more thing, too, according to us: a damn good industry to get in on.
"Consultants offer a fresh, objective point of view when an organization is looking for answers to questions it never had in the past," says Elaine Biech, author of The Business of Consulting. And this is a particularly salient point right now with a recession lingering and layoffs occurring in all industries. "Layoffs don't signal less work for consultants," says Biech. "In fact, it's often just the opposite. The employees go away, but the work may not. Consultants can provide temporary people-power to complete projects that still remain."
To get a start in consulting, you will need solid experience and expertise. John Hrastar began his McLean, Virginia, consulting firm, InterSource, after building a $25 million business. "My expertise comes from being a real-world, serial entrepreneur, having an interest in a wide variety of industries, an understanding of the underlying processes that drive business growth, and the ability to quickly learn, distill and communicate a situation when working with a client," say Hrastar, who offers CEO advisory services; interim CEO services, where he becomes the CEO of a company for a brief period of time; and CEO roundtable discussion moderation.
"The key is to determine where your brilliance lies and then offer it to clients," advises Biech. "Do a thorough self-assessment: Explore your experiences, inventory your competencies and assess your consulting aptitude." Also, talk to other practicing consultants to get a feel for the business, the day-to-day operations and the challenges. "The third step is to determine how much money you'll need to make and begin to establish your business plan," says Biech.
Startup costs for consulting practices are minimal: A desk, computer equipment and high-quality marketing materials. "You can get by with few expenses to start a consulting business," says Biech. "However, don't cut costs on your marketing supplies. Do not shortchange your image."
Here are some resources to get you started in your consulting research:
- Startup Kit: Consulting Business
- Startup Guide: How to Start a Consulting Service
- An Introduction to Business Plans
- Start a Private Practice Consulting Firm
- Institute of Management Consultants USA
- Professional and Technical Consultants Association
- Association of Management Consulting Firms
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A head for numbers and the stomach for the tumults of running your own business--if you can pass this anatomy test, then you might be up for what the Jobs Rated Almanac 2001 calls the best job in the country: financial planning.
This field is steadily growing: The number of certified financial planners (a designation regulated by the CFP Board of Standards) has risen from 31,900 in 1997 to 37,101 in 2001. The number of CFP Board Registered Education Programs has more than doubled since 1996, from 87 to 213.
"Financial planning is a professional practice that involves specialized knowledge in the areas of cash management, risk management, tax planning, retirement planning, investment planning and estate planning--and most important, an awareness of the interconnectedness of all these areas," says David B. Yeske, CFP and national president-elect of the Financial Planning Association.
Financial planners almost always have a financial industry background, whether CPA, stock broker or even tax attorney. "From there, you must add specialized knowledge about financial planning, with a goal toward becoming a certified financial planner," says Edward J. Stone, author of Getting Started in Financial Consulting and editor of The Journal of Corporate Accounting & Finance. "Increasingly, customers want financial planners who are certified. It demonstrates at least a minimum level of competence."
Count your CFP courses as your first startup cost--though you can't gain certification until you've passed the exam, have three years of professional experience, and agree to abide by the CFP Board's Code of Ethics and Practice Standards.
Beware: If numbers are attractive to you but you must always stick to a formula, this field probably isn't for you. "Some people are attracted to financial services because they like being able to measure things, to come up with precise numerical answers," says Stone. "But that's definitely not what it feels like to be an independent financial consultant. You have to be a creative problem-solver. There are no formulas to follow."
In other words, you've got to be able to market your services, keep your own business finances afloat, work comfortably on your own and communicate with clients. "You can't apply the technical tools of financial planning unless you also have good listening skills and a reasonable amount of empathy," says Yeske. "There is no one right answer when working through the financial planning process with a client, but, instead, many possible solutions."
Learn more about financial planning with these books:
- How to Become a Successful Financial Consultant by Jim H. Ainsworth
- Best Practices for Financial Advisors (Bloomberg Professional Library). by Mary Rowland
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After September 11, you saw them everywhere: Flags on car antennae or attached to windows. Flags on lawns. Flags on shirts. Many were given away in exchange for charity donations. But many, many were sold at the local convenience store, the grocery store, the department store--hopefully with a chunk of change still going to charity.
While marketing patriotic products during a time of national turmoil can be a risky venture, it can also turn out to be a business opportunity that can nourish both your entrepreneurial spirit and your conscience--if you go about it in the right way. John Landrum and Bill Russell both work in the film industry, but just days after September 11, they were struck with a thought that changed both their lives: How can you show your patriotism while also supporting the peace movement? Hours later, Peaceflags.org was born.
But don't let the quick start fool you: The business partners struggled to find flag manufacturers that would take a chance on their small company and surprisingly controversial product: an American flag with stars in the shape of a peace sign. In fact, CNN pulled a segment on Peaceflags as a result of advertiser pressure. "It's controversial in that the peace movement is marginalized right now," says Landrum, who worked with Russell to keep the flags completely U.S.-produced. "Because we're providing the symbol of that [movement], we definitely became the chew toy of that battle."
They also struggled to find a way to get the word out about their product. They first focused on nonprofit organizations like National Public Radio, but were shut out because Peaceflags.org isn't nonprofit. (They explored the option, but Landrum says it was a "bureaucratic nightmare.") With a scarce advertising budget, they lucked out: Both Mother Jones and The Nation offered online ad space for next to nothing, and their ad got the highest click-through rate--4 percent--in history on both sites. They've since received 3,000 orders and donated one-third of proceeds to charity, and they plan to keep the business alive in hopes of finding a nonprofit purchaser for Peaceflags.org.
The moral of this story is, while the nation's attitude is ripe for new patriotic products, it's not necessarily an easy sell. Like any "hot" trend, getting started quick is crucial--and getting started quick requires long, long hours. But is it worth it when the trend will peter out? The current 50 million flag market (according to the National Flag Foundation) will undoubtedly diminish over time, but 20 million flags are still sold every year. So regardless where current events are headed, customers will still be looking for flags come Flag Day and Fourth of July.
Check out these resources on Entrepreneur.com:
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People are busy. Very busy. And many don't have the time or energy to scour the Yellow Pages and call around for price quotes and credentials when looking for services like attorneys, child care and home repair. So what do you do? Create a network of suppliers, check their credentials, charge them a referral fee, and open up shop.
Referral services are a brilliant way of capitalizing on everyone's favorite marketing tactic: word-of-mouth. "My husband and I had just purchased our first house and were struggling to find reliable home-improvement contractors," says Debra M. Cohen, founder of Hewlett, New York-based Home Remedies of NY Inc., a home maintenance referral agency with 220 licensees nationwide. "When I finally found a responsible contractor, I felt compelled to share his name with other homeowners in need of his services."
One of the most famous referral services is 1-800-DENTIST, a toll-free service where users can call and find recommended dentists in their area. Other types of referral services include attorney, elder care, child care, apartment and even sleepaway camps.
"The balancing act in operating a referral business is, you're providing a service to two separate groups of people," says Cohen, who spends much of her day on the phone. "[I] earn commission for any work secured from the contractors I represent. At the same time, I select contracts carefully so as to maintain a high standard of quality and service for the homeowners who use my services. Ultimately, both groups need to be satisfied."
Need some inspiration for deciding on a referral business to start? Check out some of our Startup Kits and guides:
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Personal training isn't a lot of things: It isn't just teaching aerobics. It isn't sweatin' to the oldies. What it is is a field that requires a great deal of experience, education and knowledge of the human body, how it works, how it hurts and how you can help someone recover from injuries and/or get into the best shape of their life.
Ayrn Singler studied sports medicine at Michigan State University and has a host of letters behind her name that spell out only one thing: how experienced she is. And those letters make all the difference in her eponymous training business. "I attribute my success to the fact that I do have a sports medicine background and rehab-based knowledge," says Singler, who has an office in her Fort Lauderdale, Florida, home and rents space in a local studio for training sessions. "I know a lot more than the normal personal trainer."
Singler suggests that anyone seriously interested in personal training get a bachelor's degree in a health-related field like exercise science or kinesiology. This is also a must if you want to get certified by the National Strength & Conditioning Association Certification Commission, the only nationally accredited personal training certification--and one of the sources for all those letters behind Singler's name.
Another helpful way to get a feel for the industry is to get a job in it. "Find a job that gives you the chance to learn without spending great amounts of money to get in the field," advises Mark Occhipinti, M.S., Ph.D., with American Fitness Professionals & Associates, a membership association that provides resources and training. "If you really enjoy the work, then it is good to pursue further education and training."
As for startup costs, they're minimal. Singler got started for $4,000, which included office equipment and clothing for sessions. She stresses the importance of image in an industry where you often work with higher-end clientele. She has also saved money by benefiting from the cheapest marketing method of all--word-of-mouth--by letting her experience and skills speak for themselves.
Get your new personal-training business whipped into shape with these books:
- The Business of Personal Training by Scott O. Roberts
- The Personal Trainer Business Handbook by Ed Gaut
- The Personal Trainer's Handbook by Teri S. O'Brien
- Resistance Training Instruction by Everett Aaberg
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IT spending is down this year--it's true. But after increasing year after year for the past decade, there's still a huge market for tech consultants. IDC estimated that worldwide corporate spending on online initiatives would reach $700 billion in 2001, with U.S. companies spending $260 billion on web infrastructure in 2000.
Who's the market for tech consulting? "Any firm using IT systems. In other words, almost any firm," says Don McLaurin, CEO of the National Association of Computer Consultant Businesses, an organization that represents IT services firms.
As far as choosing a specialty, let your imagination and your skills determine that. Computer consultants can focus on software development, network engineers, security, programming, web designers...the list goes on and on. "People specialize [within these areas] as well," explains Gloria Metrick, owner of GeoMetrick Enterprises, a Cincinnati-based computer consulting firm that specializes in managing laboratory data, and board member of the Independent Computer Consultants Association. "For example, there are many programming languages a consultant might specialize in. Another twist is, some consultants specialize in a functional area or a subset of a functional area. For example, I work with a specific type of laboratory system known as LIMS (Laboratory Information Management Systems), and I perform all tasks within the type of system I work with."
To get started, you need a good amount of experience in the area you're specializing in. Before striking out on her own, Metrick had worked for a LIMS end-user and a LIMS vendor as well as subcontracted at a LIMS consulting firm. "Consultants cannot be 'run-of-the-mill' talent," says McLaurin. "They usually need at least three years of practical experience. [And,] unless they are in some really esoteric technology, they need good soft skills, i.e., communications and relational skills. More than 80 percent of consultants are asked off of assignment because of nontechnical reasons."
Put your high-tech know-how to good use with help from these books:
- Flawless Consulting: A Guide to Getting Your Expertise Used by Peter Block
- Getting Started in Consulting by Alan Weiss
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When Tina Louise Feldman, 27, and Alan Balode, 25, began creating online games for Internet sites a few years ago, everyone thought their idea sounded like a sure thing. Now, Feldman says, when people hear that Ultimate Arcade Inc. develops games for dotcoms, they say, "Oh, I'm so sorry.' But we're doing great."
So is the online game industry as a whole. It's expected to grow to $5.6 billion by 2005, according to market research firm Jupiter Media Metrix. Feldman and Balode's Calabasas, California-based company has seen business double in just the past six months. Their clients are small (insurance companies, nursing homes) and big (Disney, Levi Strauss and Warner Bros.).
Eventually, Feldman says, they'll branch out into doing online games people will pay to download. But for now, they're sticking to where the big money is: gaming sites offered by businesses with something else to sell. "We're going to see more and more companies [using] online games," says Glenn Platt, professor of economics at Miami University in Oxford, Ohio, and director of its Center for Interactive Media Studies. "Companies want to give consumers a reason to come to their site, to stay at their site and to come back to their site," says Platt. "And online games is the ideal medium for that, if you've done a good job. [Games] create a sense of community, and the users feel like they're part of a special club, which can be valuable for any organization." Platt created an online hockey game with his students a few years ago to help Procter & Gamble promote its Febreze fabric freshener. P&G was trying to improve its sales with college students, says Platt, adding, "They figured college kids would have smelly clothes." To gain the kind of following Ultimate Arcade enjoys, your games will need to stand out. "With all the competition," says Platt, "companies need to keep making these games better, more interesting and more sophisticated." -Geoff Williams
Surf over to these sites for some gaming inspiration and information:
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Celebrity moms like Cindy Crawford and Kelly Ripa aren't the only ones who know that muumuu-style maternity clothes are so last century. Today, pregnant women are all about celebrating their style and looking sexy. From high-end maternity designers like Liz Lange and A Pea in the Pod to midpriced maternitywear newcomers The Gap and Old Navy, clothing designers are on to the potential of this growing market. With more than 4 million babies born annually, it's easy to see why the maternity clothing market is buzzing.
Peg Moline, editor in chief of Shape's Fit Pregnancy magazine, has seen a boom in sexy and hip maternity clothing as well as in athletic maternitywear. And with more pregnant women on the job, maternitywear has to provide workplace comfort and style. "[Clothes] have to be really comfortable, really sharp-looking and also very hip," says Moline.
Enter LSR Maternity. Specializing in lingerie, LSR founder Laura S. Rudolph describes her products as the "Victoria's Secret of maternitywear." Founded in 1996, Aurora, Colorado-based LSR was born out of Rudolph's frustration with the dearth of sexy, well-made and affordable maternity fashions on the market. Rudolph filled the void with lingerie the average woman could afford. "It's not about income levels and social status," says Rudolph, 36. "It's about who wants to feel beautiful and sexy during pregnancy." Rudolph's prices range from $48 to $84, and she plans to release a lower-priced line through her online store and specialty boutiques nationwide.
Need more proof this market is worth a look? LSR Maternity's revenues have increased 300 percent over the past six months, and Rudolph is projecting sales of up to half a million dollars in 2002. -Nichole L. Torres
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You can teach an old concept new tricks. While many online companies appear pale under the economic spotlight, e-learning businesses are looking rosy. Employee training, internet college courses and classes catering to the fresh legions of home-schoolers are booming areas. IDC expects the corporate e-learning market alone to top $18 billion by 2005, up from $2.3 billion in 2000.
Stephan Thieringer, 35-year-old CEO and co-founder of Danvers, Massachusetts, business training company GTF Systems, is familiar with what it takes to successfully launch a virtual education company. "The market is huge," says Thieringer. "The mistake a lot of companies make is, they get very broad-ranged. We are very specialized." GTF Systems' focus on state- and federal-mandated compliance training and human resources solutions keeps it plenty busy in its niche market.
Thieringer explains one of the key factors poised to make 2002 a good year for e-learning entrepreneurs: "The community has come to the point where distance learning isn't necessarily considered an inferior education." The arrival of accredited online-only universities like Capella University of Minneapolis is proof positive of this growing trend. Look for business opportunities not only in providing courses and continuing education programs, but also in servicing the peripheral supply and material needs of distance learners.
While there is a high awareness of online college-level classes, there are also interesting e-learning developments a little closer to home. According to the National Home Education Research Institute, 1.3 million to 1.7 million children were home-schooled in 1999 and 2000. No exact figures are available for 2001, but the home-schooling movement has gained significant steam during the past few years, making K-12 education a hot area for entrepreneurs. Fronted by William J. Bennett, former Secretary of Education under former President Reagan, K12 in McLean, Virginia, has made a high-profile entry into this area by offering curricula and supplies geared toward the elementary market. But there is still plenty of room on the chalkboard for small companies to make their mark.
Thieringer sees a wide landscape for e-learning startups, but he emphasizes that the basics of customer service and specialization are required for success. "It's about content," he says. "It's about the scalability of the product. It's about the bandwidth requirements. It's about ease of use." Virtual learning entrepreneurs prepared to balance the knowledge with the technology will move to the head of the class in 2002. -Amanda C. Kooser
Learn all you can about online learning before you get started. Check out these books by Rena M. Palloff and Keith Pratt, college instructors and experts in the field of developing online learning communities:
- Building Learning Communities in Cyberspace: Effective Strategies for the Online Classroom by Rena M. Palloff and Keith Pratt
- Lessons From the Cyberspace Classroom: The Realities of Online Teaching by Rena M. Palloff and Keith Pratt
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Business coaches have been around for years, but today many are morphing into life coaches. After all, life and business are intertwined, and many people need help in both areas. Life coaches generally charge between $300 and $500 a month for a weekly 30-minute phone call, in which they help their clients set goals and motivate them to achieve those goals. Life coach Karen Childress, 42, in Peterborough, New Hampshire, says, "[Clients] tend to stay with coaching for a few months to a few years; if it didn't work, the industry wouldn't be growing."
And it's definitely growing. Bobette Reeder, president of the International Coach Federation (ICF) in Washington, DC, notes that when she received her coach training in 1995, there were possibly two credible coaching colleges. Today, 42 recognized schools offer coaching education and training, 10 of them accredited by ICF. And ICF, which boasts 4,500 members, is growing by some 200 members each month.
Childress says you can make more money if you recruit corporate clients and offer additional services. For instance, in the past, she offered clients her own brand of do-it-yourself life coaching for cash-strapped clients. Members would pay $12.95 a month to set, organize and monitor their goals online. Combining the dual consumer demands of coaching and convenience is just one way entrepreneurs can use their fertile imaginations to fuel opportunity as a life coach. -Geoff Williams
Be someone's hero. Read these books to jumpstart your life-coaching business:
- Coach Anyone About Anything: How to Help People Succeed in Business and Life by Germaine Porche and Jed Niederer
- Take Yourself to the Top: The Secrets of America's #1 Career Coach by Laura Berman Fortgang
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