What motivates a person to start an enterprise? In the beginning, it’s just a simple idea. But when three dynamic young professionals creatively combined their ideas with a hot consumer trend, the result turned out to be one of the most sought after automobile customization shops in Los Angeles.
Hassan Iddrissu’s love of stylish cars as a teen developed into his passion as an adult. In 2001, he opened Roadstarr Motorsport, a luxury car customizing service, with his twin brother, Hussein, and cousin John Spio. “This is what I enjoy,” says Iddrissu, 28, a native of Ghana.
For countless young black entrepreneurs, the lure of emerging markets is too good an opportunity to pass up. That was certainly the case for EXPARTUS CEO Chioma Isiadinso and The Laundry Spa owners Notoya Green and Fred Mwangaguhunga. All it took was a talent for recognizing opportunities and the zeal to turn them into lucrative businesses. Whether they are in the business of car customization or preparing candidates for college admission, young successful black entrepreneurs are turning trends into profits by creating some of the most innovative enterprises in the country.
BLACK ENTERPRISE small business writers collaborated to assess which hot market opportunities and business ideas have the best potential for 2006. This year, we take a look at seven high-growth areas that are creating fresh business opportunities for young entrepreneurs: car customization, admissions consulting, lifestyle management services, mobile technology, security and privacy, home entertainment, and health and wellness.
THE CUSTOMIZATION CULTURE
“If the ride is more fly, then you must buy!” When hip-hop icon and car buff Snoop Dogg offered this advice in a Chrysler television commercial last summer, it marked the auto industry’s commitment to targeting young urban consumers.
Savvy business minds are also heeding the message: car enthusiasts want more from their rides. From spinning rims and high-powered hydraulics to designer interiors with high-tech navigation systems, retailers of aftermarket car accessories and auto body shops are exploding on the scene with cool customizations.
As a 14-year-old student living in London, Iddrissu recalls the moment when he first set his eyes upon a Porsche 911 while on a field trip in Germany. It was an experience that spawned his infatuation with high-end European cars — and a business idea.
After he graduated from college, Iddrissu worked as a broker for Morgan Stanley. In his spare time, he customized his own car and later his friends’ rides. “I got into this first as a hobby, taking care of my own cars,” Iddrissu says. “And I realized the potential to actually take advantage of it from a business aspect.”
He saved $250,000 and left his job to become an entrepreneur. He used about $80,000 of his savings to open the first custom shop in Los Angeles because it was “absolutely” the right location for his line of work. Eventually, the company opened a second location in the Santa Monica area and expects two more to open in Toronto and Moscow, which the company will co-own with a partner from the Ukraine.
But brace yourself, Iddrissu adds. Those wanting to enter this type of business are going to need “a substantial amount of money that would be sufficient to run the business for at least a whole year without expecting to make a return as far as profit.” He suggests saving $200,000 to $500,000 for startup costs as well as establishing your business in a secure location where inventory will be safe.
In many ways, the big automakers are just now catching up with the customization craze. “Car customization is not a new trend; it’s been around for a while,” says Kimatni Rawlins, president and publisher of Automotive Rhythms Communications L.L.C. Rawlins, whose multimedia and marketing portal’s mission is to educate young, hip buyers about new vehicles and automotive trends, says, “the advent of new customization shows like Pimp My Ride is just now bringing to the forefront what has already been going on behind the scenes.”
Iddrissu warns that his facilities are nothing like those featured on MTV or The Discovery Channel’s Monster Garage. Roadstarr (www.roadstarr.com) deals strictly with customization of high-end, European automobiles such as BMW, Mercedes-Benz, Ferrari, Land Rover, and Lamborghini. And its clientele reflects it. The company’s celebrity roster includes Michael Jackson, Shaquille O’Neal, Ben Affleck, and rapper T.I. Glamour and glitz aside, Iddrissu expects gross revenues of about $4 million in 2005, up from $3.8 million the year before. With the two new locations set to open, Iddrissu expects to reap as much as $7 million in revenues this year.
Whether it’s customizing, personalizing, or restyling — all these terms are used to describe what people do to cars to make them unique. In 2004, car customization fans bought $3.6 billion worth of restyling specialty equipment, a niche market that has grown nearly 118% since 1995, according to the Specialty Equipment Market Association.
DO YOU HAVE WHATIT TAKES?
Applicants who’ve made it through the doors of America’s top universities got there on more than a prayer and a superior G.P.A. More than likely, a glowing “it” factor helped put a stamp of acceptance on their applications.
Chioma Isiadinso, 34, is in the business of bringing that out of her clients. “Candidates who are savvy enough to learn how to sell themselves will get ahead,” says the CEO of EXPARTUS L.L.C. (www.expartus.com), an admissions consulting firm in New York City with an expertise in personal branding.
The Nigerian-born entrepreneur, along with husband Obinna, knows well what admission boards find attractive. As a former assistant director of admissions at Carnegie Melon’s Heinz School and former member of the admission board at Harvard Business School, she lent a critical eye to tons of applications. Three and a half years ago, Isiadinso combined her work experience with a psychology degree and a desire to empower people to start a company that’s helped 85% of her clients reach their dream schools.
“How do you stand out in a pool of 10,000 applicants? You have to tell a story and know how best to tell it, and that’s what we do,” says Isiadinso.
For a flat retainer, Isiadinso, along with two part-time consultants, works to help clients discover their personal brand and gain an edge over the competition. Drawing from her psychology degree, Isiadinso listens to life stories and identifies meaningful points worth marketing. Recently, she says, a woman who looked perfect on paper lacked the confidence to get through the M.B.A. application process. “We had to build her up,” she says. “She had a compelling story, but people told her she wouldn’t amount to anything.” After talking to Isiadinso, the client learned her personal brand was a desire to uplift women. “But she didn’t see the power in that. She applied to five schools and got admitted to four. She’s now in a top M.B.A. program.”
Success stories like these are how EXPARTUS earned more than $100,000 this year, and Isiadinso expects an additional 50% growth in revenues for 2006. Most of the company’s clients are high school students aiming to gain acceptance into Ivy League colleges as well as young professionals looking to get into graduate school. Strong referrals and strategic marketing to alumni associations and specialized e-groups keep the client roster full.
For those passionate about education, an admissions consulting business is a rewarding way to go, says Isiadinso. Startup costs are low and learning the application process, while not rocket science, requires in-depth coaching skills. However, a key ingredient is having a knack for empowering people to realize their dreams.
CLEANING UP IN THE PERSONA
L LAUNDRY INDUSTRY
New York City’s celebrities, fashionistas, attorneys, and other professionals whose polished appearances take time and money to maintain have helped a pair of entrepreneurs find success in a crowded market of dry cleaning and laundry companies.
Two years ago, Green and Mwangaguhunga jumped on the opportunity to provide a unique solution for schedule-challenged New Yorkers who are often too busy to do their laundry. Now, The Laundry Spa is one of a growing number of lifestyle-management services dedicated to helping individuals with frantic schedules. The company will pick up your laundry, wash it, and deliver it with care — beautifully wrapped and scented — within 48 hours.
“In an industry dominated by mom and pop shops, we saw a need for a company that could provide better quality services on a consistent basis,” says Green, partner and director of marketing. “There was an opportunity to create a regional, branded company that will hopefully turn into a national brand.”
With eight employees and $450,000 in sales for 2004, The Laundry Spa (www.laundryspa.com) caters to “brand conscious” women and
men aged 25 to 45. “They’re pretty finicky, and they care about their clothes and who is cleaning them,” says Green, who worked as a matrimonial attorney before becoming a business owner.Touting its services as “a spa for your clothing,” the company’s prices are roughly triple that of its competitors. The firm charges $2.25 per pound of laundry, $4 per pressed shirt, and $8 per piece for dry cleaning. Green says being at the high end of the scale isn’t easy but adds that the partners never intended to compete on price anyway.
With their eyes on growing both market share and annual sales in 2006, the pair sees significant opportunities for entrepreneurs who rise above the commodity-based industries to provide personalized, high-end lifestyle services to their clients. Mwangaguhunga says,”The entrepreneur who approaches a problem in a new, innovative way and looks at giving customers more than what they’re used to will find the most success.” BE
Hot Opportunitiesin high-growth markets for 2006
Car customization. A tricked-out ride is a high priority for many drivers. The trend, which is becoming more mainstream, indicates that consumers want their cars and trucks personalized, or restyled, according to a 2005 market study issued by the Specialty Equipment Market Association.
From racing spoilers and neon accent lighting to custom grilles and fancy seating, many car aficionados are buying the goods and installing it themselves. Others turn to the pros for help with window tinting, a lowered suspension, or a special paint job. Opportunities exist in the areas of wholesale or retail car parts (especially trendy accessories), custom paint jobs, car stereo upgrades, and upholstery customization.
Admissions Consulting. An M.B.A. application is extremely important and merits some constructive preparation from a knowledgeable source. Given the reality that top M.B.A. programs accept about 10% of college applicants, professional assistance from an admissions consultant can make the difference. Total college enrollment of 18- to 24-year-olds has risen over the last three decades, according to the National Center for Education Statistics. This trend bodes well for entrepreneurs interested in establishing services to help students target the best schools. For more information about admissions consulting, contact the Independent Educational Consultants Association. The IECA (703-591-4850; www.iecaon line.com) is a nonprofit, professional association representing full-time, experienced independent educational advisers.
Hot Opportunities: More high-growth sectors for 2006
Like what you’ve heard so far about these entrepreneurs? Here are some other business concepts you can explore:
MOBILE TECHNOLOGY. While text messaging, voice, and ring tones are popular right now, mobile technology-driven content also has strong potential. To get a glimpse of where this market is going, content publisher Mobile Lingo will make Hip Hoptionary, a dictionary of hip-hop terminology written by Alonzo Westbrook, available as a mobile phone download service. Subscribers can use the data to instantly find the meaning of the latest hip-hop slang. Developing your own content or helping others convert
SECURITY AND PRIVACY. Americans are concerned about their personal security, boosting the total size of the U.S. electronic security industry to $10.2 billion. And it’s still growing at a rate of 8.7% per year through 2008, predicts The Freedonia Group. Products like access control, alarms, biometric devices, digital closed-circuit TV, and contraband detection are hot and are being purchased by organizations and individuals interested in protecting their personal safety.
SPECIALTY COFFEE SHOPS. Whether they open a local coffee café or buy a franchise, coffee-loving entrepreneurs can stake their claims by knowing their communities, finding niches and marketing their brands. Interested in a franchise that features high-quality espresso and ice-blended coffee drinks? It’s A Grind (www.itsagrind.com), a fast-growing coffeehouse franchise, has about 175 stores under development throughout the nation. With a cash investment of $240,000 to $440,000, you can own a neighborhood café with a blues and jazz motif.
HEALTHCARE AND WELLNESS. The desire to reduce stress, be more attractive, and live a healthier lifestyle are fueling demand for all things spa and wellness-related, medical spas especially. Research sponsored by the International Spa Association in 2004 found medical spas growing by 109% in the previous two years, versus 26% for spas as a whole. That translated into $11.2 billion in revenues in 2003. As consumers age, they are increasingly demanding products and services that allow them to maintain or improve their health and physical mobility, leading to a wealth of potential new business opportunities for savvy entrepreneurs.
LIFESTYLE-MANAGEMENT SERVICES. “People have more money than time today,” says Debrah Shaver, owner of Lifestyle Solutions in Chevy Chase, Maryland, and they’re willing to pay someone else to take care of everyday tasks they’d prefer not to. Membership in National Association of Professional Organizers, the professional organizing industry’s association, has grown by almost 50% in the last two and a half years as entrepreneurs have responded to a growing demand for such services. With a wide variety of lifestyle-management services to choose from, here are a few worth considering: personal shopping, event planning, home and office organizing, and consignment/donation.
HOME ENTERTAINMENT. Last year Americans spent $24.1 billion renting and buying DVDs and videos to watch at home, far more than the $9.4 billion spent at the box office. Rather than head out for entertainment, consumers today are more interested in staying home and are pumping billions into their homes to make them comfortable places to hang out.
— Additional Reporting by Stacy Gilliam, Aisha Jefferson, Bridget McCrea & Marcia Layton Turner