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Choose Your Path

Cart-ography

If you like the idea of a brick-and-mortar store, but prefer a more fluid and affordable option, a kiosk might be right for you.

These carts are often found in the middle walkways of malls and shopping centers, as well as at carnivals, sporting events and even in office building lobbies. They sell everything from candles and cosmetics to jewelry and cell phone accessories. A kiosk business can be started for a great deal less than a brick-and-mortar store (most start at $3,000 and up), and the lease terms are generally shorter. Products that work well in a kiosk environment tend to be a bit more trendy and whimsical, says Fairchild. Kiosks are also heavily seasonal--you'll see lots of them during the holidays.

Still, don't be fooled by the fun exterior--it's going to be a challenge. If you decide to run the kiosk yourself, expect to work very long hours--as long as the mall is open, which can mean more than 12 to 14 hours a day during the holidays. If you plan to hire workers, set aside time to train them before you open the kiosk. And while the risk is smaller, the profits are smaller, too--experts note that a high-performing kiosk can bring in around $200,000 in annual sales (though your actual sales will vary greatly based on your products and location). Still, says Segel, this can be a great start for beginning retailers. "Most of the major malls have programs to make sure [kiosks] succeed," he says. Check out Specialty Retail Reportfor more industry information.

AJ and Meena Chad combined a great location with an appealing line of products to make their Spa At Homekiosk successful. Selling a line of specialty gel candles, bath products, specialty soaps and home d├ęcor, this husband-and-wife team opened their first cart in Tallahassee, Florida, in 1998. They initially procured their personal care products from an outside manufacturer, but because they didn't make huge orders, the supplier didn't want to work with them anymore. That's when Meena, 31, a chemist by trade, took matters into her own hands, and the pair started manufacturing their own products out of a local warehouse.

In 1999, their success inspired them to add another location. They also began wholesaling their products and now offer Spa At Home as a business opportunity to other entrepreneurs. Their two company-owned carts have brought in sales well into the six figures, and the Chads have sold 70 kiosks to other owner-operators.

Because the Chads have been in the business so long, they're able to give advice to kiosk novices. "One mistake people make [is that] they'll spend money on the rent and they won't research the market," says AJ, 34. Research will help people realize that Miami in July isn't the best time or place for a candle cart. Not having enough money on hand to get you through at least six months of rent is another mistake. "If you think you'll pay one month's rent and the next will come from sales . . . well, that's a fifty-fifty or less chance," says AJ. Have the rent funds on hand so you can worry about your cart presentation and gaining customer loyalty.

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This article was originally published in the March 2005 print edition of Entrepreneur with the headline: Choose Your Path.

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