Best bets: 1997's hottest businesses - Cover Story

Entrepreneur, Dec, 1996 by Lynn Beresford, Heather Page

The world seems to be spinning faster than ever. What's "in" this morning is "out" this afternoon. In such an accelerated environment, a business's ability to stay on top of trends is key. Knowing what's happening in your industry and what's likely to happen tomorrow, what consumers want and what they need - these things make or break your business. To help you keep on top of the latest changes, we're offering our selections for the top 11 businesses for 1997.

Some pretty large forces are at work in shaping these business concepts. The aging of the baby boomers (and their parents) is giving rise to an interest in assisted living facilities for older adults and physical therapy to keep people in peak condition. Ongoing corporate downsizing means specialized staffing services and professional employee organizations continue to thrive; newly hot this year are business training companies that help people learn new skills.

The Internet, of course, offers a world of opportunities, as do computer training and consulting. And an increasing interest in "do-it-yourself" projects has spawned such successful concepts as brew-it-yourself custom breweries and paint-your-own-pottery stores.

Our look at next year's hottest businesses will help you target your goals and keep your business on track for success. Check it out - then get to work putting this information to use.

Educational Toy Stores

Back in the days when the words "educational" and "toy store" never shared the same sentence, opening a retail toy outlet was a formula. A toy store was a toy store was a toy store. These days, however, toy stores that feature learning-based playthings are all the rage.

Why is this market so hot right now? "Today's more educated parents are much more involved in their children's lives," says Katie Malone-Cordell, co-owner of Skokie, Illinois-based Brainstorms Inc. In addition, they often have less faith that the school system will supply all the education a child needs.

Despite the presence of monolithic chains such as Noodle Kidoodle and Zany Brainy, experts agree there's still room in this industry for savvy entrepreneurs. It's not child's play, however: "You need capital, competence and luck to make it," says Howard Davidowitz, chairman of Davidowitz & Associates Inc. in New York City, a national retail consulting firm.

So how can you ensure success? For one thing, choose a plum location, far from the upscale urban areas that large chains favor. But the key, says Sue Edelman, editor of Big Blue Box, a publication that reports on the children's market, is setting yourself apart from the pack: "Be sure you have something unique to offer."

Paint-Your-Own-Pottery Stores

Once again, entrepreneurs nave broken the mold - this time by starting a slew of paint-your-own-pottery stores. Different from traditional ceramic studios, these contemporary studios are located in bustling retail locations and boast a hip, coffeehouse-like atmosphere. Here, the future Picassos of the world are given all the necessary materials to create their own works of art on functional, prefabricated pottery pieces such as platters or mugs.

With an estimated 200 retail outlets and counting, paint-your-own-pottery stores are painting the town from coast to coast. More than just shelves stuffed with pottery though, many stores also offer live music, cappuccino - even wine and cheese. And smart entrepreneurs bring in extra business by renting out their stores for baby and wedding showers, bachelorette parties and holiday celebrations. "When we throw parties, many referrals are generated," says Leslie Tall, co-owner of Paint 'n Plates in Irvine, California, "and in this business, word-of-mouth is absolutely imperative."

You can't just throw yourself into this business, however. Before opening their store, Tall and co-owner Terri Laine Klingner spent a year reading ceramics magazines, visiting warehouses and frequenting studios to research prices and themes. Barbara Tobias, editor of Popular Ceramics magazine, warns that thorough knowledge of safety regulations and the mechanics of ceramics are musts: "It could really turn people off if they have problems, don't like how their pieces turn out, or if you can't answer their questions properly."

Web Site Design

In light of the Internet's promise to place a company's products, advertising and marketing materials in front of millions of customers, it seems every business on the planet either has a Web site or wants one. That's why opportunities for firms that create graphics and content for Web pages are simply outta site.

"Businesses are continuing to learn how to use the Web," says Don Heath, president of The Internet Society, which seeks global cooperation and coordination for the Internet. "That means good Web site design companies that can provide excellent graphics and content are going to be important."

Market research firm O'Reilly & Associates estimates 40 percent of large companies and 25 percent of medium-sized and small businesses have either developed or plan to develop Web sites. Revenues are also coming from companies with poorly designed Web sites that need to be revamped. And because Web site design finns aren't limited by geography, the world market is in their grasp.