We'll Drink to That!

This story appears in the April 2003 issue of Entrepreneur. Subscribe »

What: Sugar-free and low-carb drink mixes
Who: Christopher J. Miller, Craig Cook, Robert Pfeiffer, Heike Pfeiffer and Kerri Bryant, co-founders of Low Carb Living Inc.
Where: Encinitas, California
When: Started in 1999

It was the renewed popularity of the Atkins diet that inspired Christopher J. Miller and his partners to start Low Carb Living Inc. After losing weight on the program, this chiropractor realized there were few cocktail options for people on low-carb diets, as nearly everything on the market was made with sugary syrup. "When I was on the diet, I couldn't drink margaritas," says Miller, 53. But during a trip to Mexico, he and his partners started experimenting with flavor combinations and sugar replacements to come up with a low-sugar alternative to traditional margarita mixes. Baja Bob's Sugar Free and Low Carb Bar and Party Mixes was born.

Selling the mixes was a challenge at first--the company started with powdered mixes that tasted fine, but they weren't moving off the shelves as fast as their liquid competitors. "People weren't looking for [powdered versions]," Miller says. "The liquid version was more recognizable."

So they found a co-packager to make the mixes. Now the company sells a full line of drink mixes, including piña coladas, daiquiris and Bloody Marys.

The Baja Bob's line is so popular with the weight-conscious set that the makers of the Atkins diet catalog contacted them. Says Miller, "I have a stack of e-mail from people who are so grateful we've come up with this idea." And with sales of about $500,000 in 2002, that gratitude seems to be pouring in.

At Your Disposal

What: Service that refurbishes and disposes of old computers for business customers
Who: Stampp Corbin of RetroBox
Where: Columbus, Ohio
When: Started in 1996

When Stampp Corbin worked as a computer consultant in 1996, he noticed firsthand the problems companies faced when they had to purchase new computer systems and get rid of outdated equipment. So Corbin decided to launch a business to streamline the disposal process--and today, his company removes old computers, erases any sensitive information and then resells refurbished units or destroys unusable ones in an environmentally sound fashion.

"We have had companies with football-field-sized warehouses full of outdated equipment," says Corbin, 42. "Those assets are depreciating very quickly. When they call us, we introduce them into the secondary market [right away]." His clients get a monetary return on their old computers, as well as the assurance that their confidential data will remain that way.

Currently, RetroBox serves 80 Fortune 500 companies; just one such corporation might retire 10,000 computer assets a year. Corbin sells many of these refurbished and discounted computers directly to consumers online. RetroBox also sells through eBay and in bulk to international clients.

Initially, Corbin's biggest challenge was educating potential customers about RetroBox's services. But that's no longer a problem, now that sales have grown 450 percent over the past three years and doubled in 2002 alone.

Music to Their Ears

What: An online emporium of children's music
Who: Ingrid Harding of PlayhouseRadio.com
Where: Biloxi, Mississippi
When: Started in 2001

When Ingrid Harding had her first child, she wanted to expose him to music with appropriate lyrics--songs that the family could listen to together (without the parents wanting to stick cotton in their ears). The music she wanted existed, but it was tough to find--she didn't know where to look in record stores, and on the Internet, it was hit or miss. She would preview songs that were labeled "children's," only to discover they contained inappropriate lyrics. "It was frustrating," Harding says. "[I thought] it should be better organized."

That desire inspired Harding, 34, to start PlayhouseRadio.com, a Web site where parents can listen to pre-screened children's music and buy custom-made, kid-friendly CDs. It took months of research, though, for Harding to learn the Internet protocol, as well as the music licensing and publishing business. Says Harding, "I don't think I slept for a year, calling around to find [information] about the legal angle, the financial angle, the technical angle."

Getting the technical side down was step one; finding the artists and music was step two. Harding, who works with independent music artists, found that those relationships were mutually beneficial. She needed content for her Web site, and the artists needed a place to sell their work. With 100 artists currently featured in her catalog, Harding is far from finished. She plans to find more artists and to make more music available to parents and their kids. Says Harding, "My goal is pretty idealistic--to change the image of children's music."

Tagging Along

What: Fashionable, decorative identification badge holders
Who: Ava Minsky Foxman of Moonbabies LLC
Where: Linwood, New Jersey
When: Started in 1996

Ava Minsky Foxman has an artist's eye. As the owner of a jewelry company that sold beaded stickpin figures and necklaces, she found inspiration one day while walking around the mall and noticing ID badges on boring metal chains people had to wear for work. "[I thought] if people have to wear them, they'll want them to be attractive," says Minsky Foxman, 49.

Her company, Moonbabies LLC, had found success--Minsky Foxman, who majored in fashion design in college, launched the company after becoming a stay-at-home mom. But when she branched out to make jeweled and beaded badge holders in 1998, she faced a challenge educating consumers about what her products were and why they were so special. After the events of 9/11, however, companies faced a mad rush for more security, and ID badges became common--boosting demand for her stylish badge holders.

With the education process now over, Minsky Foxman is selling her badge holders to department and specialty stores nationwide, as well as directly to consumers online, garnering $1.5 million in 2002 sales.

Think About It

Keep your eyes peeled--the perfect business idea is out there. Wondering how you can get a smart idea of your own? There are three categories of ways to get brainstorming about business ideas:

1. Update an old idea. Often, you can find a workable business by taking an old idea and putting a new spin on it. Ask yourself, Is there a business idea that used to exist and doesn't any longer? Is there a way you can update an old idea and roll it out to a new audience? Ask your older relatives if there is a business or service they remember from their childhood that could be dusted off and reintroduced.

2. Find something that has worked somewhere else. On business trips to Europe, Howard Schultz of Starbucks noticed how Italians spent hours in cafes sipping coffee. He imported the idea of cafes to the United States. The next time you visit a new place, keep your eyes open. You just might stumble across the perfect business.

When you relocate to a new area, look around to see what's missing. Or, if you're jealous of a particularly successful business already in your area, why not move where it doesn't yet exist and establish one yourself? Not every business idea travels well, so be sure to put aside your own feelings for the product or service and examine it from a business standpoint.

3. Refocus a big idea for a specialized market. Break off a piece of a big market and refocus it to a different audience. For example, one entrepreneur noticed the popularity of frozen meals for adults, so she developed a line of frozen meals targeted to kids.

Read anything you can about big business. Whenever you run across an item that interests you, take a hard look at that category and ask yourself, What if I took a similar business and tweaked it to make it more special for a niche audience?

Reprinted from Niche and Grow Rich: Practical Ways to Turn Your Ideas Into a Business (Entrepreneur Press) by Jennifer Basye Sander and Peter Sander

On a Shoestring

What: Environmental contracting and waste management
Who: Bob Delhome of Charter Environmental
Where: Chelsea, Massachusetts
When: Started in 1997
Start-up cost: $300

After establishing strong contacts during his six years in the waste-management field, sales representative Bob Delhome was ready to climb to the top of the trash heap with his own venture.

With $300, he bought a computer and set up shop at home. Using his contacts, Delhome subcontracted the work for the waste-brokering services he provided. To curb overhead costs, Delhome went to job sites during the day and copied his work documents at Kinko's in the evening for the next day's job. He also learned to do his own bookkeeping.

In six months, Delhome, 34, had two full-time employees and moved his company to the loading dock of an old industrial building. A local lumber retailer was going out of business, so Delhome bought their office furniture.

Waste brokering was a starting point for Delhome. "It was the most low-cost way to build sales and use profits to build an asset base," he says. Delhome then reinvested his money and bought equipment and disposal sites. The company now provides environmental contracting and waste management to contractors, consultants and government agencies. Charter made $1.5 million its first year, with projected sales for 2003 between $35 million and $40 million. Despite his success, Delhome remains pragmatic to avoid the pitfalls that failed competitors have encountered: "There has been nothing in excess."