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By Susan Caba
There’s an exhibit at the Magic House in Kirkwood, a contraption in which a ball drops, a gear turns, a bridge lowers, a balance is shifted and, in the end, the whole wacky process—while seemingly precarious—completes itself and begins again.
Think of it as a 3-D metaphor for economic potential. After all, somebody has to make the gears, build the bridges, pull the levers and help put the whole thing together—and in those functions lay opportunity.
“There are opportunities virtually everywhere,” says Alan Richter, St. Louis regional director of the Small Business Development Centers (SBDC).
For those considering starting a small to mid-sized business, experts point to three broad areas in which startups can thrive. Call them the three “homes”: home health care, home improvement and homeland security.
Of the three “hot” sectors, perhaps the most unexpected right now is the vast demand for products and services related to homeland security. Before 9/11, few would have predicted the federal government and private industry would both be spending billions to foil terrorist attacks. Yet the market is almost indefinably diverse today, with cyber-security and defense against biologic weapons just two of many burgeoning areas.
“Homeland security is a terribly important issue, and lots of money is being thrown at it by public and private sectors,” says Richter. “There is a huge pot of money to solve homeland security problems in the country and not a lot of solutions out there.”
 Suzanne Joyce sensed a market for cyber-security even before the attacks on 9/11. She and two
partners founded TechGuard Security in St. Louis in early 2000. |
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Suzanne Joyce sensed a market for cyber-security even before the attacks of 9/11. She and two partners founded TechGuard Security in St. Louis in early 2000. The company sells software and systems to protect communications networks, as well as helping organizations put effective security policies into place.
“We really struggled to get anyone to understand the need for security at first,” says Joyce. “There was no thought about security issues, especially here in the Midwest.”
How vast is the potential? Joyce points out that the nation’s cyber-infrastructure ranges from technology that controls card-access, to the underpinnings of the financial industry. And hers is just one facet of the homeland security market.
The aging baby boomer juggernaut is a second engine driving entrepreneurial opportunity in the St. Louis region. An astonishing 12,000 people in the United States turn 50 every day—and that’s a pace that will continue for the next 20 years.
As a result, Americans spent more than $41 billion on home health care in 2001, creating what the Wall Street Journal recently called “arguably the hottest segment in franchising.”
St. Louis is primed to take advantage of the rising demand for health care because of its position as a hub for life sciences and advanced manufacturing. “There is already a critical mass of life sciences,” says Dinah Adkins, president and CEO of the National Business Incubation Association, based in Athens, Ohio. She points to the Center for Emerging Technology (CET) and the NIDUS Center for Scientific Enterprise. Each provide business support and lab space that life sciences startups need.
Between them, CET and NIDUS have supported two dozen start-ups, many with a niche in health-related fields. The largest at NIDUS has grown to about 25 employees, says President Robert J. Calcaterra. That company provides digital imaging services to small hospitals, making those medical images transferable by computer.
At CET, President Marcia B. Mellitz points to a company involved with therapies for treating osteoporosis—a prime concern of aging women.
Calcaterra predicts plenty of “spin-off, spin-in” developments as entrepreneurs at universities and large companies like Monsanto—which funds NIDUS—create small businesses which could then eventually be acquired by the bigger firms.
“All those people need equipment, very elaborate equipment,” agrees SBDC’s Richter. “They all need a variety of other services, whether it be crickets to feed lab animals, or facilities and space. They need legal assistance and accounting firms with an understanding of the biomedical industry.”
Graying boomers provide other business opportunities, as well. Medical “spas”—aimed at holding back the cosmetic ravages of time—are popping up everywhere.
Budding entrepreneurs would also do well to look at the $158 billion-a-year home-improvement industry. According to the National Association of Home Builders, approximately 942,000 new houses were built last year—and, on average, the owner of a newly built house spends $8,900 to furnish, decorate and improve it. Those expenditures, in addition to improvements made by owners of existing houses, support franchises and independent businesses that do everything from install closet systems to overhauling entire houses.
Handymen—or women—also find themselves in great demand. There are national handyman franchises; House Doctor, which started in 1985, has 157 units, according to the Wall Street Journal. The hardest part of owning a handyman business is finding enough handy employees, even though they can easily earn $1,000 a week.
In the end, though, the ultimate success of any start-up, says career strategist Anna Navarro, president of Work Transitions, depends on more than just market demand.
“It doesn’t matter what the market is, if you don’t have a person that has the right skills and interests, the business is going to be a bomb,” she says. “The best kinds of business come out of people’s guts.”
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