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The Hottest Teen Business for 2005 Feeling young at heart? Up on your trends? Then you might be in a great position to open a teen-oriented business. Here are the hottest ideas for 2005.

By April Y. Pennington

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 ages of 12 and 19 in 2000, their opinions and discretionary spending are worth your attention.

According to market research firm Teen Research Unlimited, teens spent or influenced spending to the tune of $175 billion in 2003-and not just on clothes and CDs. Edina Sultanik Silver, co-founder of New York City-based Brand Pimps and Media Whores , a youth market trend consulting firm and fashion showroom, says teens buy things they feel they're a part of. "They buy into brands they can appreciate, a value system they have in common, an authenticity." Silver points to several blockbusters among teens: "[IPods have] become a part of their world," she says. "They can share and get music; they also like the design and its ease of use." Clothing brand Diesel built a strong brand image and was one of the first retailers in the United States to offer an "experiential" store with a cafe, video games and books. And pointing to the proliferation of camera-phones, Silver adds, "Kids are starting to document their lives. Like with blogging, they're creative outlets for kids."

The following hot businesses show how worthwhile catering to this market can be.

Teen Grooming Products

Primping and preening are nothing new when it comes to teenage girls, but look out-teenage boys are now in the mix like never before. Business intelligence and market research firm Global Information 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 ring up $8 billion in sales by 2008.

Smart businesses realize there's more to offer teens than just acne cream. "Kids today are much more sophisticated and have the ability to cross over into products they may not have known about in the past," says Marshal Cohen, chief analyst with market research firm The NPD Group . "Grooming is now viewed as a cool thing."

Former Procter & Gamble (P&G) employees Ann McBrien, 43, and Karen Frank, 40, are charging into bathrooms and locker rooms with OT (OverTime) , their grooming line for teenage boys. Frank (who had helped P&G develop the brand) and McBrien took it over after P&G shelved it, bringing the athletically inspired line-with sports grip packaging-to market in March 2004. With products like Body Slam Sports Wash and Head-to-Head Just Clean Shampoo found in Target stores nationwide and regional chain retailers Meijer and Biggs, OT exceeded $1 million in sales in its first six months. Parents of teenagers themselves, McBrien and Frank know OT benefits teens, parents and teachers, who have been their strongest advocates-especially when students come into their classes right after gym.

Teen Hangouts

Number one on the list of things to envy about teens has to be their free time. But when no appealing options are available for this highly social set to congregate, suddenly youth can seem like quite a drag. Teens looking for this "third place"-a place other than home or work where they can gather to relax-have flocked to coffeehouses and cybercafes. But they still yearn for establishments that truly cater to them, which is why the mall has remained a favorite. "Research shows one of teens' favorite ways to spend their time is hanging out with friends," says Kelli McNamara of lifestyle marketing firm Cornerstone 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 Red Lounges last December in Chicago and Los Angeles malls, specifically reaching out to teens. With video games, custom-built furniture, and music videos and film previews playing on plasma screens, this free hot spot clearly gets what teens are interested in. Red Lounges' scant branding, save for a vending machine offering Coke and other Coca-Cola beverages, was purposefully done. "[Businesses] have to be careful; teenagers are very fickle and 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 metropolitan areas, are starving for hip third places, and the opportunity for entrepreneurs is huge. "Research is essential," says McNamara. "A teenager in Manhattan is very different from one in Long Beach, California, in what they do in their free time." Rather than try to create a generic offering, discover what 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 in the park, but with rising numbers of students heading there, competition is fiercer than ever. The National Center for Education Statistics reports the total enrollment in degree-granting institutions increased 17 percent from 1988 to 2000; and between 2000 and 2013, total enrollment is projected to increase another 19 percent, to 18.2 million. Students and their parents are realizing that time and care are essential in planning for college, and that's where entrepreneurs come in. Judy Hingle, director of professional development for the National Association for College Admission Counseling , has seen a rise in independent counselors providing financial aid and college planning services.

Families spend $5 billion annually researching and applying to colleges, according to investment bank research firm Legg Mason Investments. Entrepreneur Craig Powell, 27, is carving out a piece of that market by harnessing technology to streamline the process. Powell's Boston-based ConnectEdu is an education software services company focusing on the college search and application process, including financial aid. ConnectEdu's software and network of education professionals assist in every step of the process. By researching and finding the right school, filling out admission and financial aid applications, and then evaluating acceptances and rewards,ConnectEdu helps students find the school that fits their needs. Projected revenues for 2004 are $3 million plus, but students-not profit-come first in this operation, according to Powell. He says, "We position ourselves as a trusted source of third-party information."

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