Build Expanded Living Spaces Once the interior or a house or business is done, it's time to improve the exterior. And that's where your new expanded living space business comes in.

The slowdown in home sales has been accompanied by a surge in overall residential remodeling, which totaled an estimated $238 billion in 2006, according to the National Association of Home Builders. Many of these dollars are being used to enhance existing spaces rather than add more square footage. Garages are among the spaces getting extreme makeovers to be used for hobbies, parties, wine storage and even cooking.

Remodeling fever has also hit the American backyard. "Over the last couple of years, there has been greater emphasis on outdoor living space," says Kermit Baker, chief economist at the American Institute of Architects in Washington, DC. "Outdoor kitchens and cooking spaces are a recent phenomenon, along with greater investments in decks, porches and gazebos. Lot sizes have been getting smaller, but people are using them more intensively."

Manufacturers are capitalizing on this trend by developing all-weather products--lamps, leather-like fabric and even rugs--for these super yards. "Porches, patios and backyards are being viewed as literal 'rooms' of the home," says Pat Bowling of the American Home Furnishings Alliance in High Point, North Carolina. "They're being furnished with the same considerations for style, comfort and function as the indoor living areas." Whether you provide the remodeling services or create the products, this opportunity has room to grow.

Getting Started
If you dream of starting a business in the expanded living spaces arena, consider the following:

• Find a niche. Michael Galica, 42, of Marin Outdoor Living in Greenbrae, California, projects sales of $1 million in his first year and credits his success to finding a niche in this booming field. A yoga practitioner who spent time in Costa Rica working on reforestation, he designs and furnishes upscale outdoor living spaces, using environmentally friendly products. "Look at what your competition is doing and then tweak the business to find your niche," Galica says. "We have very high-end green products that people won"t find anywhere else." These include furniture with woods approved by the Forest Stewardship Council, picnic tables made of composites that include recycled paper, fireplaces that run on denatured alcohol made from ethanol, and outdoor stoves that cook with infrared burners.
• Think residential and commercial. Galica creates outdoor spaces for homes as well as restaurants, wineries and hotels. The business from one tends to boost the other: People see his work in their friends" backyards, then are inspired to change the exterior space around their businesses.
• Make your showroom spectacular. Galica says a showroom for upscale outdoor living has to stun people when they walk in the door. Accordingly, he ripped out the fluorescents from his 4,500-square-foot showroom and put in designer lighting and wrapped structural posts in steel for a sleek, contemporary look. "It's all about presentation," he says.
• Form partnerships from the start. Galica searches for other people in his area that are also operating green businesses--for instance, sustainably crafted products for inside the home--and offers coupons to their customers. These other businesses do the same for him.
• Use promotions to attract customers to your new business. Every month, Marin Outdoor Living shows movies in its showroom on some environmental topic, from farmed fish to the Cuban oil crisis. The store often draws crowds of up to 50 people--potential customers for all the sustainably crafted outdoor furnishings around them.