For Subscribers

Hot Stuff Millions of people: How do you get to them? Endless opportunities: How do you take advantage of them?

By Heather Page

Opinions expressed by Entrepreneur contributors are their own.

It used to be that the ubiquitous "hot lists" were more hype than hot. But these days, who needs hype? Sure, the hype is full-blown and millennium-powered. But for once, the pure reality is many degrees hotter than the hype.

Consider one of our hottest trends, e-commerce. What can we say about e-commerce that isn't surpassed by the technological miracles we see daily? While much of the furor over the year 2000 is egocentric vapor, the Internet will prove to be our rock-solid legacy. It's our version 2.0 of the Industrial Revolution, with one major improvement: The revolutionaries aren't factory-running capitalists-they're entrepreneurs running corporations from their desktops. E-commerce isn't merely hot; it's history in the making.

Simultaneously, the eve of 2000 finds us hitting a high note in consumerism. Drunk with the fruits of a strong economy, many people have more money than ever before and are itching to spend it. To better determine what's hot to the all-important consumer, we examined this year's trends according to demographic groups. And we found these groups are more than the sum of their catchy monikers-Generation Xers, tweens and the like are savvy consumers and major economic drivers.

Consider the hottest of today's markets: teenagers. Proving the power of their opinion and their pockets, if not judgments, they handed the Backstreet Boys the highest first-week album sales by any artist . ever. Their fanatical approach to consumerism has everyone from Hollywood moguls to Madison Avenue veterans squealing like 14-year-olds at a Britney Spears concert. Today's teens have Internet access, credit card authority and an overwhelming desire to spend, spend, spend. The last time a market generated this much heat, we were just becoming acquainted with the term "baby boomers." Now cutting-edge entrepreneurs are saying goodbye, BMW; hello, WB.

In addition, we've selected a number of nonage-discriminatory markets or life situations (for example, people who are stressed for time) that hot businesses will be operating in or selling products and services to-and show that when trends and markets collide, hot businesses are born. We've pinpointed 15 hot businesses for 2000-some traditional, some futuristic, each with undeniable potential.

Sure, you may be tired of all things hot. But this is not your father's popularity contest, nor your mother's "in" and "out" list. This is the beginning of the new economy as we know it. So before you take one more step toward the future, read this, our most important "hot" list to date.

Babies/Kids

It's a small, small world, and you'd better get used toit. Anyone who's spent time around children knows the wholeuniverse revolves around their pint-sized needs. And it isn'tany different for you as an entrepreneur. An estimated 4 millionbabies will be born next year, and the U.S. Census Bureau projectsthat number will gradually increase, reaching a birth rate of 5.7million per year by 2050. Though you may at first think yourbusiness has nothing to do with kids, think again. Kids influenceparents' purchasing decisions from the time they cantalk-probably even from the time they can point. That minivan iscool; that restaurant has the best kid's meals. And if you wantit to be your restaurant or toy that's the coolest, read on tofind out what our younger friends (and their parents) will bebegging for in 2000.

Infants

Who are the new leaders of hip? You got it, baby. Parents aredressing babies in miniaturized chic brands like DKNY, Eddie Bauerand Tommy Hilfiger, and also letting the little ones indulge inupscale luxuries such as beauty products and organic baby food. Anddon't assume that cashmere sweater from BabyGap is out of thequestion because parents can't afford it--30 percent of apparelpurchases for infants are gifts, and grandparents (that is, adultsage 55-plus) account for $2.2 billion of the $17 billion infantmarket. Also be on the lookout for toddler products: Rather thancontinuing to treat this niche as an extension of infants orpreschoolers, today's marketers are developing productsspecifically for toddlers, such as bridge foods.

Hot Business: Toddler Tech

Just when you thought there were no new frontiers for thecomputer industry . here comes lapware-software for babiesand toddlers that reacts to the simplest stimuli: tapping on amouse or the keyboard. This industry grew 18.5 percent in salesfrom 1997 to 1998, with units sold growing by 63 percent. Bewarned, however: Much of the industry is controlled by largecorporations, but true lapware-that is, for infants-is stillrelatively new turf. And the Web is the last frontier for thedrooling set. Most pre-readers aren't yet attracted to themostly text-based Web-that is, until your site full of interactiveanimation, games and photos goes live.

For examples, check out a Web portal for 3-to-7-year-olds atwww.alfy.com, multimediaactivities aimed at kids at www.mamamedia.com, or baby softwareat www.babywow.com

Preschool/gradeschool

Surrounded by character-driven marketing from an early age (canyou say Nick Jr.?), kids are influencing purchases earlier than youmight think. During an online chat conducted with parents of2-to-5-year-olds, Kid Think Inc., a youth marketing consultinggroup, found brand-conscious kids start becoming aware of whatproducts their parents buy between ages 2 and 3, and 75 percent ofparents said their children often make specific brand requests.

"Any product or service kids ultimately use, they havegreat influence on," says Mark Wesling, vice president atSmallTalk, a kids marketing consultancy in Cincinnati. "Theargument is: 'Hey mom-you're gonna get this for meanyway. Why not get me the one I want?'"

With the influx of working parents and highly scheduled days forkids, Rachel Geller sees parents wanting ways to connect to theirindependent kids, and kids wanting ways to feel even moreindependent. "Anything that smacks of technology and answers aparental need to protect their kids is going to be important,"says Geller, chief strategic officer and founding partner ofGeppetto Group, a kid and teen advertising agency and marketingconsultancy in New York City. That could include anything fromvoice mail for kids to kid-sized electronic organizers. Productslike easy-prep food or room organizers can help children feel moreindependent.

With kids acting more like busy adults and parents acting likekids to ease their stress, the new marketing term is"kidulthood." "Adults are acting more liketeens," says Geller. "They feel they have the right tohave time and money to themselves. On the other hand, you see kidsacting much more mature and having stress and responsibility.It's an opportunity for family marketers to actually be able totake almost the same benefits--relaxation, entertainment andstimulus--and market it to all ages."

Tweens

As 9-to-12-year-olds approach puberty, they'll continue toaspire to teenhood, plus deal with their own fears about thechanges in their lives.

"Mysticism is a way for girls to play out scary fun,"says Geller, citing the growing popularity of dragons and showslike Sabrina, the Teenage Witch and Charmed."Scary for boys has traditionally been action figures, sportsand [superheroes]."

Tween girls are also finding heroes in sports figures, such assoccer star Mia Hamm, and superheroines, like the anime-stylePowerPuff Girls and Marvel Media's She-Hulk and Spider Girl."It's a new sensitivity about girls. There's noquestion that girls are taking on much fuller, moremultidimensional personalities," says Geller.

Meanwhile, the lives of tween boys are still very much centeredaround sports, especially extreme sports, while computer games,video games and anime remain popular.

Hot Business: Upscale Kids' Photos

Birthdays, school graduations, lost teeth-parents can alwaysfind an excuse for a photo op, and upscale photographers ready tosnap the pictures. Approximately 8,000 of the ProfessionalPhotographers of America's (PPA) 14,000 members are child- andfamily-portrait photographers, and according to those in thetrenches, business has never been better. "Our business hasabsolutely gone through the roof this year. It's like awildfire," says Angela Carson, chair of the Children andFamily Special Advisory Group for the PPA and owner of AngelaCarson Photography in Northville, Michigan. Photo trends she'switnessed include more black-and-white photography (which nowcomprises 30 to 40 percent of her business) and portraits taken onlocation.

"The increase [in children's photography]," saysCarson, "is probably three-fold: One is just the sheer numberof children. Two is that as parents get older, I think they valueand understand that their children are only going to be little fora short time. And three, honestly, is just the currentdiscretionary [income]. Everybody's got money rightnow."

For more information on kids' photography, check out thePPA's Web site at www.ppa-world.org

Teens

When the Backstreet Boys' Millennium album sells 1.1 millioncopies its first week, dusting former record-holder Garth Brooks,you know who rules the school. Teens are it.

In denial? The U.S. Census Bureau estimates that by 2010, thenation's teen population will grow from today's 31 millionto 35 million, surpassing the much-hyped boomers in number.According to Teenage Research Unlimited, the typical teen spends$89 a week. And Business Week reported one in nine high school kidshas a credit card co-signed by a parent. Today's favoritemotion picture subjects (teens, duh) spent $141 billion in 1998-up$20 billion from 1997, according to Teenage Research Unlimited.Needless to say, they're a force to be reckoned with. And theirgreatest asset: They have no problem voicing their opinions.

Born after Apple IIEs were hot, teens naturally gravitate towardthe Internet to entertain themselves and chat with friends. NewYork City-based Jupiter Communications predicts that by 2002, 16million 13- to 19-year-olds will be online-nearly double thecurrent total.

Aside from teens' propensity to glue themselves to theircomputer monitors, shopping and sports rank as popular activities.And although teens are still buying into very '90s pop culture:rave chic, Japanese hip, hip-hop cool and the Woodstock '99"anything goes" mentality, they're about to embark ona trip to Glam 2000. TV hits like That '70s Show andupcoming movies like Charlie's Angels and a coupleBattlestar Galactica remakes will bring even more glitterand blow-up furniture into the lives of teen girls going on 20. Forguys, ESPN's X Games and MP3 mania have only strengthened"core" sports and music dominant interests. But don'tforget-if you discount girls in regard to traditionally"boy" things, you're so out of it.

Hot Business: Teen Beauty Store

Before you turn your nose up at the originality of a beautystore, do you know how many currently cater to young girls? MichaelWood of Teenage Research Unlimited affirms the need: "Teenslike to test products before purchasing them-that's part of thefun." But full-force fun can't be had in a department ordrug store. Teen girls need a place just for them.

Enter Patsy and Tony Hirsch, both 43, owners of teen-targetedbeauty and multimedia store Skin Market. Their 9-month-old LosAngeles favorite among young hipsters took "a lot" ofstart-up capital, says Tony, who notes developing a line of 1,000beauty products is costly. But the response has beenoverwhelming--so much so that, by request, Skin Market now hostsafter-hours birthday parties where girls can get makeovers, listento music and read magazines, all for a minimum purchaserequirement.

"We understand [from being the parents of two girls-a teenand a tween] what it's like to be a teenage girl withdysfunctional families, [loser] boyfriends, zits andinsecurities," says Tony. "And we built a store aroundthat."

So far, offerings include music, lifestyle books and beautyproducts-even break-up kits with voodoo dolls-in a comfy couchsetting lighted by throwback lamps and TV screens. And unlike inmost department stores, Britney Spears and Madonna help supplybackground music. Skin Market's online presence is currently inthe works--a good thing, because in this day and age, aninteractive Web site (think heavy content with personalized advicefor using products and e-commerce capabilities) that complementsyour brick-and-mortar concept is a must for grabbing teens'attention. Says Wood, "You can't compete againstit."

Hot Business: Niche Label Clothing

Teens will be teens, and as we know, they're a fickle lot.Their lack of long-term loyalty to any particular clothing brandhas sent formerly "hot" giants like Nike and Levi'sto the drawing board, thinking up youth-grabbing ad campaigns towin back the segment that Promo magazine says spent $27 billion oftheir own money last year. That's why niche, or indie, labelsthat round out specific lifestyles--be it skate, surf, punk,hip-hop or rave--are thriving, even without excessive marketingbulk.

Take twin brothers Sean and Barrett Murphy, 31, and their SantaBarbara, California, clothing company L&H Apparel Inc., makersof the Porn Star clothing line. In only their fourth year inbusiness, they expect to gross $12 million to $15 million, andpredict as much as $20 million by 2001. Never heard of them?Don't forget about teen word-of-mouth. "Now teens all overthe country see or hear about cool new clothes more quickly, andthey're getting access to them through direct-mail and Internetbusinesses, which have sprung up and been able to roll out on anational level much more quickly than specialty stores," saysHunter Heaney, president and CEO of teen-focused interactivemagazine MXG in Manhattan Beach, California.

Although the Murphy brothers started with $350,000 in fundingfrom partner Charles Logue, Sean says $250,000 would have sufficedto get the line made, do minimal advertising, hire a sales force,secure a warehouse, go to trade shows, take orders and cover travelexpenses.

Targeting a lifestyle tends to be the risk. "The thingthat's cool about our line is 'Porn Star' doesn'treally mean anything," says Sean, whose company recentlylaunched its less "edgy" Starlette line. "It'sjust so broad." Launching a too-specific lifestyle brand couldbe label suicide, given fleeting trends, but if you heed the adviceof a pro, you should fare well. Says Sean, "[Brands] shouldfind their identity and roll with it." Because remember: Teenscan smell insincerity miles away.

Twentysomethings

In a nutshell, today's twentysomethings are generallyseeking and preparing for a bright future-but they're doing itin the most modern manner. Whether by embracing "digitalliving," as marketing consulting firm The Zandl Group callsit, or by redefining the boundaries of love and marriage, this setof increasingly affluent consumers ranges from unsettled adultsstill clinging to their teenage years to heads of top Internetcompanies earning $1 million or more a year.

Trading stocks, shopping and meeting people online top the listof "What's Getting Cooler" in the digital livingarena, according to The Zandl Group's findings. Retro fever('80s music and cocktails rated highest in the retro category)also tickles the fancies of today's go-getters.

Although they're not a generation born into high-tech,twentysomethings find the efficiency they crave by shopping ate-commerce businesses. Content-commerce models that partner withbig-name lifestyle brands-from Food & Wine magazine to J.Crew-fare well, giving users one-stop destinations for their winingand dining, clothing and travel needs.

As for domestic twentysomethings, Rutgers University'sNational Marriage Project study, released in July, found a 43percent drop in the marriage rate from 1960 to 1996 due tolater-in-life marriages and unmarried cohabitation. With the latterin mind, demand is increasing for traditional appliances with anew-retro feel and furnishings able to capture the essence of busylives.

With lifestyles running the gamut from eclectic to traditional,twentysomethings aren't an easy category to peg or market to.As long as you present them with products and services so they canlive in style-and affordably doesn't hurt-without trying toforce-feed your concept, you'll win over this up-and-cominggeneration of high-end shoppers.

Hot Business: Matchmaking

No, we're not talking about video-based matchmaking here.The experts agree that Y2K twentysomethings wouldn't think offast-forwarding through hundreds of awkward personalitypitches.

Where it's at is online. What started with chat-roomflirting has turned into actual entrepreneurial endeavors allowingfriends and strangers to "meet" via anonymous e-mailindications of their crushes. Non-traditional, yes-but a matchremains the goal. Take Clark Benson and Karen DeMars' eCrushservice (http://www.ecrush.com), with offices inLos Angeles and San Francisco. DeMars, 29, sees it as an"electronic note passer," which, utilizing a proprietarydatabase process, searches for two people who have proclaimedcrushes on each other, and e-mails both users simultaneously.

It took about $100,000 of 31-year-old Benson's seed capitalto start, but with increased ad sales, sponsorships and affiliateprograms, eCrush is starting to see revenues.

"It's a safer way to meet people, and it'seasy," says DeMars. "You could be sitting in your pajamashaving a beer in front of your computer." And when youconsider the emerging market-teens who've grown up doingeverything online-the service seems not only more necessary,but also more lucrative.

Irma Zandl, founder and president of The Zandl Group, agrees."People are outsourcing everything," she says,"including the dating game." But if you're attemptinga more traditional matchmaking service online, Zandl says thoroughevaluations of prospects will only strengthen business in thesequestionable times.

Don't forget real-world matchmaking ventures, however.Thirty-two-year-old Nancy Slotnick, owner of Drip, a New York Citycoffee, liquor and dessert bar of love connections, had so manyrequest her house special-date arrangements-that she decided tofranchise the concept.

It all makes sense, really. If twentysomethings are waitinglonger to walk down the aisle or disregarding it completely,they've obviously embraced "All You Need IsLove."

Gen X

According to American Demographics, there areapproximately 44 million Gen Xers in the nation. So why have theybeen so overshadowed by other groups for the past couple years?Obviously, because we're so caught up in teendom. That'swhy you, the entrepreneur, need to learn from the mistakes of manyof the boomers, who completely missed their cue to market to thissegment, sadly dubbing them the Slacker Generation.

Too bad for them, because now Xers are typically known as awell-educated bunch with money to spend-garnered from investmentsor money saved during the extended waiting period to startfamilies.

Now that many have their nest eggs-and nests-in place, consumercategories like children's clothing, home furnishings and hipmaternity wear continue to grow. Again, online appears to be thedestination for Gen-X shoppers seeking an alternative to malls.We've seen everything from Euro-babywear and fashionablematernity clothing dealers (http://www.estyle.com) to onlineretailers touting mid-century modern furniture.

Whatever the product, it needs to enhance, not complicate, Xerslives. Remember, this recession-addled latch-key generation grew upin turbulent times of its own.

Hot Business: Instant Spa

The last thing a Gen Xer wants is to start feeling like aboomer. With such a fast-paced society, feeling older happenssooner than we would like. Thank heaven for those simple pleasuresthat make us feel good: a nice hair cut, a pedicure, a massage. Sowhy not combine all the elements and offer total one-stopbeautification? That's what Aspen is for, you say? Wrong.

"If it's labeled in terms of the normal spa-treatment,it's not going to fly," says Michael Blackstone, presidentand marketing director of marketing and research firm The Gen-XPress. "You have to put a different spin on it-make it alittle more hip and fashionable."

We envision an open-air mall storefront, where consumers canmake appointments just as they would for a hair salon, but receivea wider variety of feel-good services and fit it all in beforetheir lunch breaks are over. Blackstone suggests including unusualactivities on the menu-perhaps a half-hour of trampoline-jumpingstimulation. And be sure to build a strong Web site where clientscan schedule their appointments and get more information.

Still somewhat conscious of pesky '80s excess, Xers wouldhave a hard time turning down a place where they could feel betterwithout retreating from work for a week and paying thousands ofdollars.

Boomers

Baby boomers are like Peter Pan: They don't want to grow up.And like that storybook character from never-never land, these 76million people aged 35 to 53 will give new meaning to the processof aging, just as they've changed every other stage of the lifecycle.

Who the boomers are and what they want depends on whom you talkto. For example, a 1999 American Demographics article described50-something boomers as in a downshifting mode. They're takingtheir affluent lifestyles into semi-retirement in rural areas andsavoring the slower pace. According to the report, 6 percent ofboomers have already retired, and many others have cut back on workand taken part-time jobs.

On the other hand, researcher and marketer Phil Goodman ofGeneration Transitional Marketing, a division of Boomer Marketing,says a big portion of this population will never be empty nesters."In 1997, there were 8 million boomer grandparents. Of that 8million, 28 percent had children from second and third marriageswho are almost the same age as grandchildren from their firstmarriages," points out Goodman. "According to the U.S.Census Bureau, in 2006, households headed by people 55 to 64 withchildren aged 12 to 17 living with them will be eight times greaterthan the number in 1996."

Goodman also believes most boomers won't retire early due totheir debts. "Boomers spent a lot of money upfront," hesays. "They're the 'now' generation; theydon't wait [to make purchases] like their parentsdid."

These contradictions are par for the course, says Eric Kingson,a professor in the school of social work at Syracuse University inSyracuse, New York, noting the inevitable diversity in such a largegroup. "And I don't simply mean ethnic diversity," heexplains. "They're also diverse in terms of pensions,income, culture, race, gender, health status and social class. Manywill have a choice of how and when they retire; somewon't."

What does this all mean for entrepreneurial businessesattempting to reach this group? Simply put, segmentation is theorder of the day. Here are some of the subgroups entrepreneursshould take a close look at when they try to target boomers:

  • downshifting boomers who are using their affluence to purchasesimpler lives in rural settings;
  • women boomers aged 40 to 64-predicted to be the largest agedemographic by 2010-who are active, affluent, married (68 percent),employed (77 percent), have children (80 percent) and are takingcare of elderly parents; and
  • those to whom close family ties are important because theydon't want to have the same generation gap with their childrenas they had with their parents.

In terms of potential business bonanzas, think younger."The key to appealing to boomers as they reach 50 is to appealto them as if they were 35 to 40," says Goodman."We're dealing with the adult teenage population of the'60s and '70s."

Goodman adds that Boomers will spend more time traveling withtheir children than previous generations and are big on holistichealth care and exercise. In keeping with the Peter Pan mentality,aging boomers may come to be known as the Rogaine and Viagrageneration, suspects Kingston.

Whatever business opportunities entrepreneurs use to chase thisperennially prime demographic, it's critical to remember thatwhile boomers as a group do have some similarities among them,you'll need to think small to successfully market to them.

Seniors

Getting old ain't what it used to be. And nothingillustrates the point better than a passage from the book Age Power(J.P. Tarcher), written by psychologist and gerontologist KenDychtwald:

"When I first met my literary agent, he told me heremembered attending his grandfather's funeral," saysDychtwald. "Although he was just a young boy, he distinctlyrecalled people commenting that his grandfather, who'd died atage 62, had lived a long life and died an 'old man.' Asfate would have it, [the agent's] father died at the exact sameage, 62. At the father's funeral, everyone lamented thathe'd lived such a short life and died so young."

Why the change in attitude? Take a look:

  • We're living longer. In 1950, life expectancy was 68years; today, according to the U.S. Census Bureau, once peoplereach senior age, 65, they still have about 17 more years tolive.
  • The ranks of seniors are swelling. In 1997, 12.7 percentof the population was age 65 and older; that figure is expected tojump to 20 percent by 2030.
  • Seniors' incomes comes from several differentsources. While the majority (91 percent) of this group citedSocial Security as their top source of income, a sizable chunk (63percent) also live on money from assets as well as private andpublic pensions (41 percent). A significant number (21 percent) ofseniors also count on salaries from working.

The median net worth of the U.S. senior population in 1993 was$86,300, with only 16 percent below $10,000 and 17 percent above$250,000. "A decade or two ago, you thought of [65-year-olds]as elderly and poverty-stricken. You didn't view them as aconsumer segment but as a group that needed social support andcare," explains Dychtwald, who has studied seniors for 25years.

In the recent past, this age group, shaped by the trauma of theGreat Depression, tended to be very frugal. By contrast,today's 65-plus folks are more comfortable spending, moreoptimistic about the future, and still feeling young. "Thiscreates a fabulous marketing opportunity," says Dychtwald.

And forget the old stigma that all older people do is knit andlawn-bowl. "There are about 10 million seniors today who arerejecting stereotypes of aging and are getting off theirduffs," Dychtwald points out. "Whether it's goingback to college, volunteering or learning to surf the Internet,they're breaking the mold and creating a whole new standard foraging."

Dychtwald is optimistic about the business opportunities in thesenior market. He notes the following categories:

  • Health care: A given, because despite these seniors'vitality, physical ailments simply become more prevalent as peopleage. Consequently, there's a need for such products andservices as pharmaceuticals, vitamins, herbs, health clubs and spasto help people deal with chronic pains and maintain their goodhealth.

"Add to that the fact that many older adults would like toslow down the aging process to remain vital and independent as longas possible, and I think you're going see a huge growth inanti-aging products," says Dychtwald.

  • Leisure: Some 85 percent of the senior population isretired, with 15 to 20 years of free time on their hands and thedisposable income to make the most of those years.

This, says Dychtwald, will spur a boom in areas like adulteducation, Internet usage, software purchases, adventure travel,senior dating services, and other programs and services that givepleasure and meaning to this group's free time.

And don't forget that 80 percent of those over age 60 aregrandparents--group that spends an average of $505 apiece on theirgrandchildren annually. Grandparents also travel more with theirgrandkids, and because of the changing American family structure,many provide secondary financial support for theirgrandchildren.

In addition to being grandparents, younger members of the maturepopulation may also have the responsibility of caring for agingparents, which means they may consider services such as adultdaycare.

Like boomers, Gen Xers or any other generation, seniorscan't be neatly packaged together and marketed to as onemonolithic group. Entrepreneurs will be more successful if theyidentify and concentrate on smaller segments (such as seniors whotravel or those in need of in-home medical services), determinethis group's wants and needs, and then fill them.

Keep Your Eye On . . .

There are 34.7 million people in the United States who are 65 orolder, and though many are leading healthy, active lifestyles, someneed a little help, creating growing opportunities in adult daycare and nonmedical home services.

While a good percentage of adult day-care centers are operatedas nonprofits, more and more entrepreneurs are looking at them asbusiness opportunities, says Patricia Schull, former chair of theNational Adult Day Services Association and founder of Adult Careof Chester County in Exton and West Chester, Pennsylvania.

There are barriers to success, however, that you'll need tobe aware of before jumping into this industry. "You can make aprofit with a center, but it's challenging," says Schull.Day-care services alone are not highly profitable; and the loomingpresence of large corporations hampers small businesses'entrée into the market. By offering senior daycare incombination with such services as outpatient care and other medicaland non-medical services, big businesses have found a way to profitfrom daycare-but leave little room for independents in theprocess.

"The influx of assisted living facilities is also impactingadult day care. Consequently, you really have to look to newmarkets or new communities to open a center," says Schull.It's crucial, therefore, to get education and experience inhuman services and establish the resources to find necessarymedical expertise before opening a day-care service.

Nonmedical home-care services is another growth area in theseniors market. For seniors who want to live on their own but needassistance with basic activities such as going to the grocery storeand preparing meals, businesses that provide these services aresorely needed.

Current obstacles for entrepreneurs include cutbacks inMedicare, which previously funded nonmedical home services;difficulties recruiting staff in light of the traditionally lowpay; as well as low visibility in the market.

In Winter Park, Florida, Stephen Wolf, 33, is taking on thosechallenges with his company, Compassionate Companions of CentralFlorida. The business, which Wolf launched in 1998, now has 33registered companions and annual revenues of $90,000.

"I did my research in 1996 to see if there was amarket," says Wolf. He discovered there were only a handful ofsimilar services in the area. Investing $3,000 of his own money andtaking advantage of an additional $2,000 of in-kind services, Wolfcreated a company that offers home cooking, light housekeeping,transportation, shopping, walking, socialization, mentalstimulation and other nonmedical assistance to seniors.

The requirements for starting a business like CompassionateCompanion depend on your location, says Janet Neigh, director ofthe Home Care Aide Association of America (HCAAA)."Thirty-seven states require licensure of agencies and 18require that aides be licensed," she says.

And this is another market where big corporations like KellyAssisted Living and Nations Healthcare, as well as organizationslike the Visiting Nurse Association, simply have deeper pocketsthan independent firms.

As the senior market continues to grow and nonmedical servicescreate more demand, it will become crucial to choose the rightlocation, form relationships with complementary agencies andunderstand exactly who your clients are.

But What About . . . Business-To-Business?

It seems everybody has discovered how lucrative selling to smallbusinesses can be. From major banks and financial institutions likeAmerican Express to firms such as ImageCafe-one of many companiesoffering do-it-yourself Web sites-people are trying to sellproducts and services of all types to entrepreneurs.

But business-to-business opportunities aren't limited toselling to small companies. With more and more midsized and largerfirms choosing to concentrate on their core businesses andoutsource a good portion of the rest, entrepreneurs with expertisecan step into the gap and take on the services beingoutsourced.

Entrepreneurs getting into business-to-business services arelooking to help companies shore up weak areas or help them betterdeploy their financial resources. From human resources managementto tech PR and beyond, companies that can help other companies dobusiness better are coming out on top.

Hot Business: High-Tech PR

Need more proof that high-tech has the Midas touch? Check outthe success that the public relations companies catering to it haveenjoyed. According to a 1999 ranking of the top 50 public relationscompanies by the Council of Public Relations Firms, income fromthose firms specializing in the technology sector jumped 80 percentin 1997 and another 28 percent in 1998. And a 1998 survey byPRWeek magazine found that the top 100 high-tech PR firmsearned a cumulative $498.8 million in revenues.

Even better news: According to Miller Bonner, executive vicepresident and general manager of technology at Edelman PublicRelations in New York City, the market for tech PR firms is stillfar from saturated. "There are so many new fields openingup," says Bonner.

You'll need to know the market well to make a splash in thisindustry. As consumers become increasingly tech-savvy, thebusinesses trying to reach them must keep up, points out RichardGeorge of the Public Relations Society of America.

You also must have the capacity to deal with the explodinggrowth of many high-tech firms. "As your clients grow, youhave to grow with them or say goodbye," says Bonner. "Ifyou don't have a global capacity or the ability to offerinvestor or consumer relations, you're going to lose yourclient."

Although the merger and acquisition frenzy in the publicrelations industry has created a number of huge firms that provideformidable competition to newcomers, Bonner believes there willalways be room for niche players to target technology companiesbecause public relations is not a capital-intensive business. Andas cities around the nation jump on the technology bandwagon inhopes of creating their own Silicon Valleys, opportunities for techPR firms will become more plentiful. Among the hot areas areAtlanta; Austin and San Antonio, Texas; Boston; New York City;North Carolina; Northern Virginia; Portland, Oregon; Provo, Utah;and Southern California, all of which are established or buddingsoftware hotbeds. Colorado Springs, Colorado; Dallas; and Denverare also strong markets, thanks to telecommunicationsactivities.

Hot Business: Professional Employer Organizations

If the companies in a given industry served only about 2 to 3percent of a market that's growing 20 to 30 percent annually,wouldn't you consider that a good business opportunity?

We thought so. That's exactly the situation for professionalemployer organizations (PEOs), according to Milan P. Yager of theNational Association of Professional Employer Organizations.Although PEOs have made this list of hot businesses for fourstraight years, there are still areas of the country whereentrepreneurs haven't yet picked up the ball and run withit.

While many firms in this market-revenues of which Yagerestimates at $30 billion--began life as employee-leasing companies,the industry has evolved considerably. Now PEOs consider themselvesco-employers with their clients for employment taxes, benefit plansand other human resources purposes. They take over the personneladministrative functions that often bog down entrepreneurs and, insome cases, are able to offer employees much better benefits that asingle business owner could.

Entrepreneurs looking to get into this industry couldn'thave picked a better time, particularly if they stay out of heavilysaturated markets like California, Detroit, Florida, Salt LakeCity, Houston and Dallas, says C. Michael Cain, president of TeamAmerica Tennessee, a PEO in Selmer, Tennessee. "Given theright geographic setting, the market is wide open," says Cain,53.

While lack of competition in areas of the country may seem likea good thing, Cain says it also means firms opening their doors inuncharted waters spend lots of time educating potential customersabout the services PEOs offer and how these differ from thoseprovided by temporary and contract staffing agencies.

Cain estimates new ventures should have at least $250,000 instart-up capital and a solid knowledge of how the industryoperates. There's also a growing body of state and federal lawsand regulations to keep up with, so be prepared.

Cain points out one last, persuasive argument for staying powerin this industry: "This is the type of business, if doneproperly, where a client will almost never go back to the old wayof doing business."

Hot Business: Staffing

We've said it once-well, actually, six times-but we'regoing to say it again: Specialized staffing is hot. According tothe American Staffing Association (ASA), revenues in this sector ofthe $58 billion temporary-help industry have jumped from $335million in 1991 to about $3 billion today.

Firms supplying professional and tech workers also continue asstrong players in market, a fact John Jay knows well. With hot techstart-ups growing all over the country, demand is up for theemployees to staff them. Couple that with a scarcity of qualifiedtech workers, and plenty of companies find themselves in need ofstaffing services. For the past 10 years, Jay, 41, owner of TechCentral in Edina, Minnesota, has been in the thick of thespecialized staffing growth wave. "I emptied out my retirementaccount, got loans from relatives and took out a second mortgage onmy home to start my company," says Jay, recounting how he cameup with the $200,000 he used to launch his business in a smallrented office space in 1990.

The gamble paid off. Today, Tech Central employs 120programmers, engineers, database managers and other IT workers, andestimates 1999 sales at about $7 million. "Although theindustry continues to grow rapidly, so does the competition,"warns Jay. "A lot of large corporations are getting into themarket, like General Motors, which started its own staffingdivision."

For a start-up to succeed, Jay says there are three criticalareas to watch. "It's important to understand the staffingindustry [itself], but you've also got to understand thetechnical and professional aspects," he advises. In addition,you need to take care of your customers by offering exemplaryservices. And finally, you've got to treat your employees verywell.

"You've got to offer top benefits," says Jay."I give paid days off for birthdays and to do volunteer work.I give tuition reimbursement and internal training. People arefighting over technical employees, so that puts them in a positionto make great wages."

Hot Business: Virtual Human Resources

Virtual human resources continues to experience explosivegrowth, securing its spot once again as one of the hottestbusinesses for the year ahead. According to a study released by theSociety for Human Resource Management in July, one-third of polledemployers outsource employee assistance, 17 percent hire others dotheir outplacement services, and another 17 percent farm outemployee training.

"Human resources is becoming increasingly complex andtechnical, which makes it very hard for small and midsizedcompanies to maintain a level of expertise or breadth," saysJudy Clark, owner of two Tualatin, Oregon, HR consulting companies.And that means opportunities for HR outsourcing firms.

Not sure exactly what HR outsourcing encompasses? HRToday notes several areas commonly outsourced: strategic peopleplanning, benefits administration, compensation, recruiting, policyand procedure management, compliance with government employmentlaws and workplace regulations, and general HR administrativefunctions.

Clark offers several tips for HR outsourcing companies. It'sbest to start with credible references as a consultant, she says.Obtaining various certifications available for HR professionalswill also boost credibility. Once you start recruiting clients, getto know their businesses inside and out, and help them feelcomfortable revealing employee information to you. Trust is crucialin this business.

Many companies are now providing human resources functionsonline. For example, KnowledgePoint in Petaluma, California, hascreated a Web-based service, HR Tools, that enables users to handlefunctions such as writing performance reviews or job descriptions,or determining whether an employee is eligible for overtimepay.

Whatever part of the industry you decide to pursue, the key tosuccess is credibility, credibility and more credibility.

Find out more about virtual HR by logging on to the Society forHuman Resource Management's site at http://www.shrm.org or by checking outHR Today at http://www.hrtoday.com

.Online Entertainment?

Forget that whole information/communication schtick: Those inthe tech-know have figured out what the Net is reallyfor-entertainment. Over the past year, entertainment capabilitieson the Internet have exploded. MP3 is a household word, majorplayers like AOL and MTV have forked over millions to acquire thenewest in Internet radio technologies, and broadband Internetconnections are paving the way for online films. Mouse clicks nolonger equal work, and the Digital Coast (i.e., SouthernCalifornia) may well be the next Silicon Valley. Here's whataudiences will be clicking on next. (Note: The followinginformation was current at press time.)

Downloadable Music

The recent scourge of the music industry may prove to be ablessing once major record labels embrace formats like MP3, LiquidAudio, a2b, MS Audio and G2. "Consumer demand is tremendousand will continue to grow as awareness grows and technologies andbandwidth improve," says Aram Sinnreich, an analyst ofconsumer content strategies with Internet research firm JupiterCommunications. "The majority of music from major labels,which comprise roughly 80 percent of the market, has yet to be putinto a downloadable format. As soon as that happens, it's goingto be a major force in the overall music economy."

Currently, digital music sales are little more than a blip onthe radar screen, but Jupiter projects by 2003, digitaldistribution revenues will reach $147 million, or about 6 percentof online music sales. The main question is whether the majorscontrol online sales as they do the offline industry."It's not clear who's going to win yet," saysSinnreich. "With the online [format], you have the opportunityfor everyone to become a music retailer. And everyone-from musiclabels to fans-is going to try and horn in on that game."

Online Films

Thus far, online films have been hampered by slow connections,but with broadband set to infiltrate 20 percent of homes by 2002,sites showing short films and animations are popping up all overthe Web. You can expect to see widespread distribution offull-length features someday, but only after all the kinks areworked out.

"For the foreseeable future, short is the way it'sgoing to go because of bandwidth and compression constraints,"says Sinnreich. "It also has to do with consumer psychology.The cliche at this point is the computer is a lean-forward device,whereas the TV is a lean-back device-although clearly improvementsin technology will change that core psychology."

Films are currently being shown for free, but revenue ideas inplace and in the works include subscription services, pay-per-viewopportunities, downloading fees, using e-commerce to sell videocompilations and merchandise, offline distribution andadvertising.

Internet Radio

Both basement DJs and traditional radio stations alike arebecoming players in the PC-radio market. Now the most narrow-genreDJs can find an audience, and a lucrative new cache oflisteners-9-to-5ers, has been born.

"Because the barriers to entry are lower online and thepotential reach is broader, you can focus a lot more narrowly on agiven genre and still derive revenues from it," saysSinnreich. "Advertising is actually much more accountableonline than offline and therefore has the potential to be worth alot more. [And online radio] has the capacity to integrate commerceinto it."

Arbitron NewMedia, a media information services companyspecializing in the Internet broadcasting industry, reports that asof July, 14 percent of Internet users said they tried Net radio,more than double the number in 1998. As for the concern thatlisteners will return to their car radios at 5 o'clock, carunits using the FCC-approved "S" band (for satelliteradio) are already in the works.

.Time-Stressed Consumers?

Can't find enough time to eat, let alone pick up thedry-cleaning, take the dog to the vet, get your tires rotated, andspend quality time with your family? We didn't think so,especially when you consider everyone is working harder andlonger-an extra month more per year, to be exact-and, says JulietSchor, author of The Overworked American (Basic Books), 58.5million workers are traveling more than 45 minutes just to get totheir jobs. When 88 percent of us say we work very hard, accordingto the Families and Work Institute (FWI), it's no revelationour society could be pegged "time-stressed."

And, as FWI reports, we do experience a negative spillover fromwork. For instance, 26 percent of us feel emotionally drained byour jobs, 28 percent don't have the energy to do things withfamily or others, and 36 percent just feel used up at the end ofthe day. This reality leads consumers to welcome with weary armsbusiness services geared toward assisting with the daily chores anderrands that devilishly rob us of our so-called free time. Ratherthan give up completely, or hook up a caffeine IV, today'sconsumers call upon the personal services industry to help themreclaim their sanity. In the process, they're stoking plenty ofbusiness opportunities-from concierge services and massage therapyto personal chefs-making any business that reintroduces theforgotten concept of relaxation a sure shot for the 2000.

Hot Business: Concierge Services

Everyone is busy-whether they're in the mailroom or the bigcorner office. And although their salaries may define their dinneroptions-Top Ramen vs. chateaubriand-that doesn't mean both endsof the spectrum can't hire help to accomplish the thousands oftasks that plague them every day.

That's where concierge services come in. With the percentageof dual-income families increasing from 66 percent in 1977 to 78percent in 1998, according to the Families and Work Institute,workers have developed bot the affluence and the lack of time for averitable personal-servant economy. So whether it's arrangingthe delivery of gifts, handling theater reservations or preparinghome-cooked meals, a concierge is the answer for more and moreconsumers today.

"It's not like it was 30 years ago," says BonnieSeidler, 51, president of The Pampered Professional Ltd. inHewlett, New York, whose 3-year-old company caters to more than2,000 corporate and personal clients. "[Consumers] need theseservices; there is just no time."

.Food?

Hot Business: Juice Bars

Still time-pressed, nutrition-needy and savoring the self-lovethey achieve by opting for a fresh fruit-blended drink over abucket of fat-dripping fries, Americans' affinity for smoothieshasn't waned since the healthy libations started gettingwidespread attention in 1994. With juice bar industry sales jumpingto more than $647 million a year, it's clear the smoothieisn't just a fad but rather a time-tested favorite.

Although soothsayers suggest one or two major chains mayeventually dominate the market, the potential for success stillabounds, particularly if you look to the sea of untapped markets(think anywhere but the West Coast), augmented menus (adding fooditems such as baked potatoes, soup, wraps and bread), and theconcept of co-branding with other retailers.

Such tactics have helped Joe Donnini, 29, president andco-founder of Juice CaBana, stay abreast of his competition."There was a gap we thought we could fill by bringing theproduct to the East Coast," says Donnini. He presently has twostores in Pennsylvania and one in Florida. By looking tounsaturated territory; adding trail mix to the juice bars; andplacing sister company CopaCaTana, a full-service tanning salon,right next door to two Juice CaBana locations, the two-year-oldcompany should earn more than $1.7 million by year-end and iscurrently offering franchise opportunities.

"Society is becoming more aware of dietary and nutritionalvalues, and lives are becoming more and more rushed," saysDonnini. "There seems to be a connection between putting boththe convenience factor and the health factor into a cup."

For more "juicy" information, visit www.juicecabana.com, www.juicegallery.com,http://www.jambajuice.com, and www.smoothieking.com

.The Internet?

What would a discussion of future trends be without a good, hardlook at how the Internet has shaped our business lives?

While teens, boomers, babies and others are making their ownindelible marks on today's business landscape, perhaps no otherfactor has had as colossal an influence in shaping the businesstrends of both now and the future as the Internet has. Theexplosive growth of e-commerce over the past few short years hasforever changed the way the world does business.

The business-to-business sector will remain at the forefront ofe-commerce in 2000, and probably well beyond. According toinformation technology research firm Forrester Research,business-to-business e- commerce will explode from $43 billion in1998 to $1.3 trillion in 2003, accounting for 9.4 percent of totalU.S. business sales. Key industries leading the way: computing andelectronics, motor vehicles and petrochemicals.

Affiliate marketing services and opt-in e-mail marketingservices are two leading and potentially lucrativebusiness-to-business e-commerce opportunities popping up on ourradar screen. Online auction sites, put on the map by eBay, uBidand others, are also grabbing plenty of attention. "Onlineauctions have unlimited [business-opportunity] potential,"says Ben Isaacson, executive director of the Association forInteractive Media. It would appear so: The online auction industryis expected to reach $52 billion by 2002.

On the consumer front, e-tailers will hear ch-ching! ch-ching!as online sales jump even higher next year. According to Forrester,Web sales to consumers will surpass $143 billion in 2003, up from$7.8 billion in 1998. By then, more than 40 million households willbuy at least some products or services online.

In 2000, consumers will want to buy more types of items andspend more money online, say experts. The Wal-Marts of the onlineworld like Amazon.com, Tower Records, Egghead and, yes, Wal-Mart,will greatly expand their product categories-and influence. But itwill also be a strong year for smaller e-retailers. By sinkingmoney into online and traditional marketing and becoming savvier inthe art of e-tailing, many of these niche marketers will finallysee a big payoff, Isaacson says. He adds, "Anything women- andhome-oriented is going to be a really big seller."

While the future looks bright for the wide world of e-commerce,we offer a few words of caution. Although many Internet businessesboast low start-up costs, especially for the tech-savvy who can doit all themselves, becoming a nationally recognized online leaderrequires spending a lot of money and effort on advertising, marketresearch and customer relationship-building. As with any business,online or off, the ticket to success is bought with hard work

Hot Business: E-Learning

Teaching isn't just for the classroom anymore. These days,classes are being held virtually anywhere, any time, online-andcreating an exciting business opportunity in the process. Internet-and intranet-based computer training, for instance, makes up muchof the growth in the computer training industry.

Students enjoy learning online because it allows them to work attheir own pace, without ever having to leave home or the office.That's just fine with online training companies, includingDigitalThink and Ziff Davis University, which relish thepossibility of having an entire world of eager students in fieldslike business management, sales and design just a mouse clickaway.

One potential barrier to the growth of the industry is themedium itself. Internet training companies may find the currentlack of bandwidth a real barrier to effectively delivering theironline courses and materials.

For a whole new generation of Internet learners and trainingcompanies, though, school's in.

Hot Sellers

What are shoppers plunking down the most money for online?According to Forrester Research, low-risk, low-cost discretionarypurchases like books, general apparel and flowers lead today'smarket, generating $2.8 billion in 1998. Other hot-sellingcategories include videos, music, toys, tools and gardenaccessories, hardware, software, electronics and homeappliances.

Hot Business: Online Classified Ads and Auctions

Sold on online classifieds and auctions? You're notalone.

"People love buying and selling online," says BenBlack, vice president of business development for market researchfirm Harris Interactive. "[Auctions] are becoming more like areligion than a business."

Online classified ad companies boast vast listings of items orservices for sale, easily accessible to the entire world online.Increasingly popular are niche-oriented online classified ad sitesspecializing in everything from cars to British paraphernalia.

RestMart.com, a Boca Raton, Florida, online classifiedadvertising business for restaurant sellers run by father-and-sonJeff and Bryan Sussman, 49 and 25 respectively, has grown 100percent or more every month in Web site traffic and revenues sinceit opened in January. "For restaurant sellers, there wasreally no place to advertise their [businesses] other than genericadvertising in local newspapers," says Bryan. "WithRestMart, we're reaching out to the [restaurant] community andgetting mass exposure."

Online auction companies go one step further by offering Websurfers the chance to bid on items, which is where many experts saymost of the real opportunity-and money-lies. According to HarrisInteractive, the average expenditure per visitor at online auctionsites in April was $191.

In the coming months, niche auction sites should expect toughcompetition from larger auction sites with wider appeal. Onlineclassified advertisers and auctioneers must also strive to gain thetrust surfers, particularly when dealing in high-priced items suchas cars and antiques.

Hot Business: Web File Storage

Hold on to your Web browsers! Just as Web-based e-mail andonline calendars made a splash this year, Web file storage servicesare the latest wave for businesses and consumers who want theirimportant data safe, secure and easily accessible-online.

"Businesses and workers don't want to worry aboutlosing their information if their hard drives crash," saysSpencer Reiss, vice president at the GilderGroup, a technologyresearch and publishing company in Housatonic, Massachusetts, andeditor of New Economy Watch, a monthly report for investors."There's no reason for consumers to have their importantstuff stored in little plastic boxes. The proper place for all thisinfo is online."

FreeDrive and Briefcase.com are a few leaders in this fledglingfield, but experts say there's plenty of room for newcomers.Companies are luring customers with free file storage and chargingfor extra services like file encryption. Reiss also saysthere's a healthy market of businesses who will pay extra formore capacity, added security, data backup and other services.

Entrepreneurs entering this market must possess not only techexpertise, but also the business savvy to exploit niches andprovide excellent customer service along the way. Reiss cautionsthere's also some market education required to acquaint userswith this concept. But experts say with wide-open markets andunlimited potential, there are clearly a lot of opportunities tobecome the world's virtual filing cabinet.

En Fuego

People like Latina magazine founder Christy Haubegger have beenpredicting a Latin explosion in American society for quite sometime-but for some reason, it took Ricky Martin to make marketersfor big corporations listen.

According to American Demographics magazine, the buying power ofthe Hispanic population has grown 67 percent since 1990 to $365billion. Hispanic teens alone spent $19 million-a monthly averageof $320 per teen-according to Teenage Research Unlimited.

This segment isn't just growing four times faster than thegeneral population-it's currently redefining cool. Couples wantto salsa, young men want to find the perfect guayabera (formerly astaple for only Cuban men), and Latin music-well, MTV's finallycatching on.

Don't overlook this market thinking Latin fever is a passingtrend. We said it was hot last year, we say it's hot this year,and at 30 million strong, to think it won't be hot next year,you'd have to be loco.

Sites To See

BABIES/KIDS

TWEENS

TEENS

TWENTYSOMETHINGS

GEN XERS

BOOMERS

SENIORS

ONLINE ENTERTAINMENT: GENERAL INFORMATION

ONLINE ENTERTAINMENT: MUSIC

ONLINE ENTERTAINMENT: MOVIES

ONLINE ENTERTAINMENT: RADIO

TIME-STRESSED CONSUMERS

E-COMMERCE

Contact Sources

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Most Popular

See all
Business News

Here's the Exact Amount of Money You Need to Be Wealthy, According to a Charles Schwab Survey

Financial service giant Charles Schwab's annual Modern Wealth Survey reveals some eye-popping numbers.

By David James
Money & Finance

Young People Are Achieving 5-Figure Incomes Without a 9-5 Job. Here's How — Plus the Critical Skills They Say School Doesn't Teach Them.

Generations Alpha and Z have a different perspective on professional success.

By Amanda Breen
Business Ideas

70 Small Business Ideas to Start in 2025

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2025.

By Eve Gumpel
Business News

Elon Musk Gives One-Sentence Response to Linda Yaccarino Stepping Down as CEO of X

Linda Yaccarino announced on Tuesday that she was leaving her role as X's chief executive.

By Erin Davis
Growing a Business

He Went From Customer to CEO of a Rapidly-Expanding Dessert Chain By Following This Process

Neil Hershman built his expansion playbook by perfecting a single store, then replicating what worked across the franchise system without sacrificing customer experience.

By Emily Washcovick
Business News

Goldman Sachs Reportedly Requires Loyalty Oaths From Junior Bankers to Stop Private Equity Poaching

The investment bank wants to confirm that analysts haven't lined up job offers from other firms.

By Sherin Shibu