Hot stuff

Entrepreneur, Jan, 1999 by Debra Phillips, Cynthia E. Griffin, G. David Doran, Elaine W. Teague, Laura Tiffany, Robert McGarvey

Ready to make your move in '99? First checkout our predictions for the hottest businesses of the year.

Concierge Services

In the past, concierge services were available only to guests at posh hotels. Today, just about anyone can pick up the phone and have their personal concierge buy tickets to the theater, shop for and send gifts to a long list of valued clients, or plan an elaborate party. With the results of a recent survey by The Families and Work Institute showing the average worker spends 44 hours a week on the job (an increase of 3.5 hours from 1977), the concept of a personal assistant begins to look very attractive for those who can afford it. "Downsizing has really put pressure on the white-collar work force in terms of longer hours and less free time," says Jim Proser, founder and president of Los Angeles-based Elite Concierges. "And these individuals are truly feeling the need for daily assistance."

While there is little information on the growth of this industry as a whole (the National Concierge Association was founded only last year), several concierge companies, including Capitol Concierge in Washington, DC, and LesConcierges in San Francisco, are now doing more than $1 million in sales per year.

Personal Chef

Fast food, takeout or TV dinner? Busy families, working couples and culinarily-challenged singles - with stomachs turning at the thought of eating one more hamburger or slice of pizza - are paying personal chefs to come into their homes to prepare gourmet dinners that can be frozen and reheated for quick, easily prepared meals.

"People are just too fired to cook when they come home from a long day at work," says Becky Trowbridge, 38, who started Marvelous Meals, a personal chef service in Dana Point, California, in 1996.

"When we do all the planning, shopping, preparation and cleanup, clients don't have to do anything except approve the menu, come home and heat it up," says David MacKay, founder of the U.S. Personal Chef Association (USPCA). There are currently about 1,800 personal chefs nationwide, and the USPCA projects their ranks will grow to more than 5,000 over the next five years. Chefs most often work alone, serving between 15 and 20 clients, but some bring in additional help to increase sales. With the USPCA predicting industry sales to reach $100 million by 2000, it smells like something is really cooking in this industry.

Virtual Human Resources

Human resources management is a minefield. One tiny misstep in setting up a benefits program can get a small business in deep trouble with the IRS. Big businesses have substantial staffs handling these intricacies, but at smaller companies, it's usually an overworked secretary or the owner who does this job in his or her spare time. This makes the probability of serious mistakes escalate.

Enter "virtual human resources" consulting firms, which have turned the problems small companies face into their own business opportunity. A case in point: Rochester, New York-based Paychex Inc. "Our typical client, a small business with between 15 and 200 employees, doesn't have the internal expertise to perform human resources functions effectively," says Paychex's founder and CEO Tom Golisano, 57.

Core small-business human resources needs involve everything from employee handbooks and personnel forms to setting up and administering retirement programs. For the companies that tackle these duties on an outsourced basis, these tasks are a potential gold mine. "Outsourced human resources is a $50 million business for us," says Golisano. "It's very profitable. And it's been growing 25 to 30 percent per year."

What's more, this niche is relatively uncrowded. The biggest hurdles? Having the meager customer base that goes with being an industry newcomer means economies of scale are a struggle to achieve. What's worse, the very complexities in human resources that prompt small-business owners to outsource those functions can prove maddening as laws continually change. But meet the requirements, and the payoff just may be rich: Predicts Golisano, "The outsourced human resources industry is going to be a very big business."

Y2K Consultant

For the 2,000th time . . . With less than a year to go before the January 1, 2000, deadline, businesses of all sizes are scrambling to complete their Y2K compliance projects - and failing. A recent survey by La Jolla, California-based ZD Market Intelligence of 2,400 businesses on their Y2K readiness indicates that while 80 percent of the businesses are committed to addressing the issue, only 17 percent have actually completed a Y2K project. The problem? There are simply not enough qualified people available to audit and fix all the computer hardware and software products that may be vulnerable to the bug.

What's worse, many non-Y2K-compliant systems were designed using older programming languages like COBOL, and many programmers skilled in the older languages have long since retired, leaving behind a potentially catastrophic knowledge gap.