13 Hot Businesses for 2005

From high-tech clothes to wine, eBay drop-off stores to tech security, the business ideas on our 2005 hot list run the gamut. But they have one thing in common: They're sizzling hot and just waiting for you to bring them to life.

eBay Drop-Off Stores

One business realm continues to flourish despite Americans' concerns over the sluggish economy--the seemingly indomitable kingdom of eBay. The auction marketplace juggernaut has more than 95 million registered users worldwide who traded nearly $24 billion worth of goods in 2003. Whether you pride yourself on being a Titanium PowerSeller or have never even thought about selling on eBay, there's serious money to be made, and a crop of eBay drop-off businesses are popping up to help with the process.

EBay drop-off stores bridge the gap between the online bazaar and people who want to sell their goods without the hassle. Owners serve as middlemen who handle an item's sale--from photography and description to financial transaction--netting a percentage for the service. Though eBay set up a Trading Assistant Program in 2002, which allows eBay users to help others sell their items, it has otherwise kept its distance in this arena and has welcomed enterprising individuals as intermediaries. "We're definitely seeing a trend of these retail storefronts opening up," says Hani Durzy of eBay. If you don't want to build a drop-off store from the ground up, consider one of the many franchises getting in on the auction action, like iSold It or QuikDrop .

"It was a huge opportunity with a recession-proof model in terms of coupling the consignment world with businesses, nonprofits and retail space," says John Hawk, 39, who started Bidadoo Inc . with his brother Howard; both brothers have B2B backgrounds. Bidadoo, with two store locations in Bellevue and Seattle, Washington, incorporates fund raising into the mix by allowing sellers to donate an item's proceeds to a nonprofit. Launched in January 2004, Bidadoo projects sales will top $1 million this year and expects fivefold growth by 2005.

What's really surprising is that many existing eBay sellers, even PowerSellers, use Bidadoo. "We thought they'd be our competitors, but it turns out they're some of our best customers," reveals Howard, 41.

Marsha Collier, author of eBay for Dummies , suggests first trying the Trading Assistant Program for a free taste of this business. Says Collier, "Why not get on-the-job training before you put out any money?"-April Y. Pennington

Kids Plus-Size Clothing

Obesity is no longer just a weighty issue for adults--children now make up an increasing percentage of the growing number of overweight Americans. According to 1999-2002 survey data from the National Center for Health Statistics, 16 percent of children and teens aged 6 to 19 were overweight--triple what the proportion was in 1980--with another 15 percent at risk of becoming overweight. That means there's a growing need for clothing that not only fits right, but also boasts the same style and attitude of its average-size counterpart.

Ruth "Penny" Smith knows all too well the anguish and frustration plus-size kids and parents feel when clothes shopping: Her own son often came home empty-handed and disappointed. Smith, 44, had been sewing some of his clothing and realized she could help others by designing large-size boys and girls clothing. Teaming up with her former district manager from a formalwear store, Patti Herioux, the two started Hey Mom, "It Fits!" in Bolingbrook, Illinois, and have received an enormous response worldwide from their e-tail website.

Market research firm The NPD Group reports the kids plus-size apparel industry has grown to about $3 billion a year--about 12 percent of the overall children's clothing market. Though large companies like Dickies, Old Navy and others have joined the fray, entrepreneurs who move quickly into this arena can stand out.

"Big names like J.C. Penney and Sears are going to larger sizes, but from what we've seen, their large sizes are not even close to where they need to be," observes Herioux, 24. "And that's the market we look to cover." Serving up to 44-inch waistlines since 2003, Hey Mom, "It Fits!" is expanding its line to keep up with requests for larger sizes. The company expects sales to reach $150,000 this year.

"The advantage for entrepreneurs is creating a very creative, specific brand identity," says Jeff Klinefelter, senior research analyst for investment firm Piper Jaffray & Co. , based in Minneapolis. Offering hip attire like denim jackets and carpenter jeans, Hey Mom shouldn't have a hard time keeping up with trends--especially now that Smith's son Cedric, 13, has moved from being the company's clothes model to one of its designers.-A.Y.P.

Search Engine Optimization

Being a rock star on stage in front of thousands of screaming fans will get the hairs on your arms to stand up. Garry Grant, 46, who used to play with the likes of Bon Jovi and Bruce Springsteen, says he got that same feeling the day he learned his company was ranked No. 1 on Google. The CEO and president of Search Engine Optimization Inc. , Grant says top ranking has equaled huge revenue gains: He expects company sales to reach $6 million in 2004, up from $1.9 million in 2003. Not bad for the multitalented computer science graduate, who went from being a rock star to an internet entrepreneur.

Eighty-four percent of Americans online use search engines, according to the Pew Internet & American Life Project, which researches the impact of the internet, and ComScore Networks Inc., a provider of marketing information and consulting services. That means getting a high ranking can make or break a business. "You could spend a million bucks on a website, [but] if it's not visible, it's worth nothing," says Grant. Businesses that want top rank turn to search engine optimizers, which provide the "technology, methodology and science of increasing your website's visibility," according to Grant.

Larry Chase, publisher of Web Digest for Marketers and SearchEngineForMarketers.com , says search engine optimization (SEO) isn't for the faint of heart. "This is a very fast-changing marketplace," says Chase. "It's not the kind of field where you learn it once and forget about it." Chase recommends constant reading of industry news to keep up; Grant goes a step further and checks for patents filed by search engine companies to stay ahead of the competition.

Good niche areas for entrepreneurs include pay per click, copywriting and local searches, says Chase, who forecasts personalized searching will be the next big search innovation. For example, tech geeks searching the word Apple will get results for Apple Computer, not the kind of apple you sink your teeth into. In this niche, opportunities exist for entrepreneurs in developing the technology that acquires such user preferences or profiles, as well as in optimizing websites for personalized searches.

Of course, we can't talk about SEO without mentioning the elephant in the room: Google. Chase and Grant agree that Google gets the most SEO attention. However, Chase adds, "You can't please all of the search engines all of the time--you have to figure out that middle ground." Like Grant, if you figure that out, you, too, can be a headlining act.-Steve Cooper

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