Hottest Teen Businesses
Up on the latest teen trends? Then you're in a great position to open a teen-oriented biz. Here are your best bets.
Opinions expressed by Entrepreneur contributors are their own.
Teens and teen culture seem to be everywhere, and with the U.S.Census Bureau counting more than 32 million kids between the agesof 12 and 19 in 2000, their opinions and discretionary spending areworth your attention.
According to market research firm Teen Research Unlimited, teensspent or influenced spending to the tune of $175 billion in2003-and not just on clothes and CDs. Edina Sultanik Silver,co-founder of New York City-based Brand Pimps and MediaWhores, a youth market trend consulting firm and fashionshowroom, says teens buy things they feel they're a part of."They buy into brands they can appreciate, a value system theyhave in common, an authenticity." Silver points to severalblockbusters among teens: "[IPods have] become a part of theirworld," she says. "They can share and get music; theyalso like the design and its ease of use." Clothing brandDiesel built a strong brand image and was one of the firstretailers in the United States to offer an "experiential"store with a cafe, video games and books. And pointing to theproliferation of camera-phones, Silver adds, "Kids arestarting to document their lives. Like with blogging, they'recreative outlets for kids."
The following hot businesses show how worthwhile catering tothis market can be.
Teen Grooming Products
Primping and preening are nothing new when it comes to teenagegirls, but look out-teenage boys are now in the mix like neverbefore. Business intelligence and market research firm GlobalInformation Inc. reports that with an industry already boasting$6.9 billion in annual sales, youth hair-care, cosmetics,skin-care, and ethnic health and beauty items are projected to ringup $8 billion in sales by 2008.
Smart businesses realize there's more to offer teens thanjust acne cream. "Kids today are much more sophisticated andhave the ability to cross over into products they may not haveknown about in the past," says Marshal Cohen, chief analystwith market research firm The NPD Group. "Grooming is now viewed as a coolthing."
Former Procter & Gamble (P&G) employees Ann McBrien, 43,and Karen Frank, 40, are charging into bathrooms and locker roomswith OT(OverTime), their grooming line for teenage boys. Frank (whohad helped P&G develop the brand) and McBrien took it overafter P&G shelved it, bringing the athletically inspiredline-with sports grip packaging-to market in March 2004. Withproducts like Body Slam Sports Wash and Head-to-Head Just CleanShampoo found in Target stores nationwide and regional chainretailers Meijer and Biggs, OT exceeded $1 million in sales in itsfirst six months. Parents of teenagers themselves, McBrien andFrank know OT benefits teens, parents and teachers, who have beentheir strongest advocates-especially when students come into theirclasses right after gym.
Number one on the list of things to envy about teens has to betheir free time. But when no appealing options are available forthis highly social set to congregate, suddenly youth can seem likequite a drag. Teens looking for this "third place"-aplace other than home or work where they can gather to relax-haveflocked to coffeehouses and cybercafes. But they still yearn forestablishments that truly cater to them, which is why the mall hasremained a favorite. "Research shows one of teens'favorite ways to spend their time is hanging out withfriends," says Kelli McNamara of lifestyle marketing firmCornerstone Promotion, based in New York City."Malls have kids their own age, music shops, films, fast food,their kind of clothing stores."
McNamara worked with Coca-Cola to launch its two test RedLounges last December in Chicago and Los Angeles malls,specifically reaching out to teens. With video games, custom-builtfurniture, and music videos and film previews playing on plasmascreens, this free hot spot clearly gets what teens are interestedin. Red Lounges' scant branding, save for a vending machineoffering Coke and other Coca-Cola beverages, was purposefully done."[Businesses] have to be careful; teenagers are very fickleand very averse to being marketed to," McNamara says."It's called the Red Lounge for a reason."
Teens across the nation, especially those far from metropolitanareas, are starving for hip third places, and the opportunity forentrepreneurs is huge. "Research is essential," saysMcNamara. "A teenager in Manhattan is very different from onein Long Beach, California, in what they do in their freetime." Rather than try to create a generic offering, discoverwhat makes teens in your area tick. Responding to teens'interests may give you all the business you can handle.
Financial Aid/College Planning
Getting into the college of your dreams has never been a walk inthe park, but with rising numbers of students heading there,competition is fiercer than ever. The National Center for EducationStatistics reports the total enrollment in degree-grantinginstitutions increased 17 percent from 1988 to 2000; and between2000 and 2013, total enrollment is projected to increase another 19percent, to 18.2 million. Students and their parents are realizingthat time and care are essential in planning for college, andthat's where entrepreneurs come in. Judy Hingle, director ofprofessional development for the National Association for College AdmissionCounseling, has seen a rise in independent counselors providingfinancial aid and college planning services.
Families spend $5 billion annually researching and applying tocolleges, according to investment bank research firm Legg MasonInvestments. Entrepreneur Craig Powell, 27, is carving out a pieceof that market by harnessing technology to streamline the process.Powell's Boston-based ConnectEdu is an education software servicescompany focusing on the college search and application process,including financial aid. ConnectEdu's software and network ofeducation professionals assist in every step of the process. Byresearching and finding the right school, filling out admission andfinancial aid applications, and then evaluating acceptances andrewards,ConnectEdu helps students find the school that fits theirneeds. Projected revenues for 2004 are $3 million plus, butstudents-not profit-come first in this operation, according toPowell. He says, "We position ourselves as a trusted source ofthird-party information."