Kids Incorporated

There's never been a better time to start a children's enrichment business.
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This story appears in the May 2008 issue of Startups. Subscribe »

Launching a new business isn't always as easy as hanging out the proverbial shingle and hoping customers will stream through your door. When it comes to kids' enrichment, however, that scenario might not be so far-fetched.

"People are rabid for programs like these," says Stacey M. Koloski, 34, co-founder with Hollye R. Seddon, 30, of Stages Inc. The Scarborough, Maine, performing arts academy provides movement, music and theater classes for preschool through high school students at its studio location, through rented studios and theaters, and on-site at area schools. In June 2007, Koloski, a playwright and longtime theater professional, and Seddon, an experienced educator, combined their talents to form the company, which expects to earn $175,000 in its first year in business.

Take a look around any family-friendly neighborhood, and you'll see anything from a children's fitness center or culinary arts program to educational programs specializing in foreign languages, tutoring or computers. So why are parents--and their kids--so hungry for extracurricular activities? In many cases, it's because schools have cut back on "extras," such as music, art and physical education. Then there are the requirements set out by the No Child Left Behind Act, which are expected to get even stricter: Barring any sweeping changes enacted by a new administration, states must have every student scoring proficient or above on standardized tests by 2014. All this adds up to increased pressure on schools to improve students' scores--and means even less focus on anything that can't be addressed with a No. 2 pencil.

Couple those concerns with parents' desire to give their children a competitive edge, a healthy start and a means to explore their individual talents, and you've got the boundless makings of entrepreneurial opportunity. The door is wide open for prospective enrichment entrepreneurs--and for those who are already in business, the door just continues to swing wider and wider.
"So much of what enrichment does is expose children to a world of possibilities that might become their career or hobby," says Sally Reis, a professor at the Neag School of Education at the University of Connecticut. Reis and her husband, Joseph Renzulli, are co-creators of Renzulli Learning Systems, a web-based tool used to help differen-tiate instruction in the classroom. "The richness of life can be provided through the experience of enrichment programs."

Nothing But the Best
Parents know that it's often up to them to provide their children with opportunities for enrichment, and they're more than willing to comply. "Our experience has been that parents are willing to give their kids almost any opportunity they can imagine," says Koloski.

What that means for startups is that much of the legwork of convincing parents to enroll their children in enrichment programs is already done. As a result, you can focus more on finding a good location for your business and developing a loyal customer base.

Koloski and Seddon found the perfect spot for their business: a space in a family-friendly neighborhood where buildout was fairly inexpensive at approximately $15,000. "The costs consisted of outfitting the existing space" with mirrors, a piano, furniture and the like, says Koloski. "The physical space was pretty much taken care of."

Being located in a market that caters to kids also proved to be key for Rob Anderson and Shelley Whid-don, the founders of Jabberü foreign language centers. With children's clothing stores as well as performing arts and music programs for kids located in the vicinity, the partners gained instant visibility with parents who were already spending time in the area. "A lot of businesses like ours are in office park settings," says Anderson, 41, president of the Bethesda, Maryland-based company they launched in January 2007. "[Our location] makes it easier to get our name out there rather than explain where we are."
Jabberü, which now has four centers in the Washington, DC, area, and offers some courses at nearby schools, provides foreign language immersion instruction in Arabic, Chinese, French, Italian and Spanish. In addition, the partners have retail stores at their Bethesda and Gaithersburg locations, where they sell supplemental foreign language materials, including CDs, DVDs and educational toys. Why the focus on foreign language? "Learning another language early makes it easier to learn other languages later," says Whiddon, 36, Jabberü's vice president. Parents understand the value of language lessons: The company's first-year sales reached approximately $250,000.

Psst . . . Pass It On
One of the most powerful methods of obtaining new clients in a children's enrichment business is positive word-of-mouth. Satisfied clients will naturally want to tell friends and family about your business, and you'll find those referrals to be priceless as you grow.

Veteran entrepreneurs Brad and Bonnie Wenneberg, 54 and 52, respectively, have found word-of-mouth to be such an effective tool at their American Martial Arts Academy that they offer referral incentives to students and their families, including cash awards and tickets to Disneyland. The husband-and-wife team first opened their karate studio in 1992; since then, they've moved into a state-of-the-art facility in Fullerton, California, and grown into a million-dollar business catering to hundreds of families in the area. Referrals also let your existing students know that you value their business--and by all means, you need to focus on retaining those loyal customers rather than constantly trying to drum up new business. "Everyone likes to be rewarded and recognized for being helpful to both the studio and their friends and family," says Brad, a sixth-degree black belt. "It sparks attention and enthusiasm."

In addition, referrals come at a fraction of the cost of standard advertising, meaning you can allocate those precious dollars elsewhere. And ultimately, you'll be more successful at signing up and retaining students who were referred by happy clients. "Your students sell the program for you," says Brad. "The ratio of successful signups is much higher."

The Franchising Route
For some entrepreneurs, buying into an established franchise system is the startup method of choice because of the sense of security it affords. For Janice and Dave Morreira, 41 and 52, respectively, it allowed them to make their foray into the children's gymnastics and fitness business even though they didn't have formal training in fitness or children's development.

By choosing a franchise, "I could combine something I love doing with children and also contribute my knowledge of [HR], accounting and operations," says Janice, who started her first The Little Gym with her husband, Dave, in 2003. They've since opened another location for combined sales of $1.7 million last year, as well as two more locations in late 2007 and early 2008, all in the San Francisco Bay Area.

A reputable franchisor will have already scouted out the best locations and created a system to help you start up and will provide you with ongoing training and support. Janice spent three weeks training with The Little Gym at startup, and she is continually impressed with the training the company provides. "They continue to get better," she says. "They put in place additional training and development based on [the feedback] they get from franchisees."

Be sure to thoroughly research any franchise that interests you before you jump in, just as you would with any other kind of business. Ask for a copy of the Franchise Disclosure Document; talk to existing and former franchisees to learn what their experiences have been; and find out what kind of startup and ongoing support they offer. Also, keep in mind that you'll pay ongoing royalties for the right to use the company's name and image. (For more on researching a franchise, visit Entrepreneur magazine's FranchiseZone at entrepreneur. com/franchise.) What's Not To Love?
At the end of the day in a children's enrichment business, you have the satisfaction of knowing that while doing something you love, you've helped a child learn and grow. That alone is enough of an impetus for many startups to keep pushing onward. And with so many opportunities available to enrich children's lives, there's very little standing in your way. Koloski puts it simply: "Go for it. I can't think of another market that is more ripe right now."

Karen E. Spaeder is a freelance writer in Southern California and founder of Rain Frog Apparel (rainfrog apparel.com), which specializes in bamboo and other eco-conscious clothing.

If you're considering investing in a kids' franchise, check out the following franchises, which ranked first in their categories in the 2008 Franchise 500®:

Art classes
Young Rembrandts Franchise Inc.,
youngrembrandts.com
Overall 2008 Franchise 500® rank: #328

Enrichment Programs
High Touch-High Tech, sciencemadefun.net

Overall 2008 Franchise 500® rank: #215

Children's Fitness Programs
The Little Gym, thelittlegym.com
Overall 2008 Franchise 500® rank: #145

Tutoring
Kumon Math & Reading Centers, kumon.com
Overall 2008 Franchise 500® rank: #18

Edition: December 2016

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