10 Small Businesses Catering to Students

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NEW YORK (MainStreet) -- The end of summer may bring groans from students, but small businesses catering to this market are looking forward to back-to-school season.

Back-to-school spending, including sales on electronics and computer equipment, school supplies, shoes and clothes, is expected to rise 2.6% this year after spending declines the past two years, according to IBISWorld.

The season is a great time for small businesses to play up their local knowledge and expertise when attracting customers.

Estimates by the National Retail Federation call for back-to-school spending to top $68.8 billion on grades K-12 and for those in college. If shoppers spent the full amount at local retailers, $46.8 billion of it would be reinvested into local economies, according to projections based upon The Andersonville Study of Retail Economics in Chicago.

That means better schools, better roads, more support for police, fire and rescue departments and stronger local economies, according to Independent We Stand, an organization promoting support of local businesses.

"The best thing that small business can do is deliver superior customer service that you don't always get in the big-box chains," says its spokesman, Bill Brunelle. For instance, "really stand out by knowing what the local school system needs for the second-grade class in terms of pocket binders. That local knowledge cannot be easily replicated at the big box stores."

Small businesses should also get involved in the community and school services whenever possible. Getting involved bolsters company recognition, Brunelle says.

While small businesses have ample opportunity to attract and win consumer retail dollars, they also have a huge opportunity to serve schools, campuses and students in other ways, experts say. An example: Educational software startup Kno attracts college-aged students by replacing traditional college textbooks with e-books on Apple's iPad.

Here are 10 other small businesses finding opportunities with students and educators:

1. Toppers Pizza

To outsiders, it may just be another pizza chain, but Toppers Pizza has figured out a way to gain a cultlike following among the college crowd. While Toppers Pizza didn't start out catering to college campuses, the company realized quickly it was -- believe it or not -- an underserved market. The company did its due diligence on understanding what its target market wants in a pizza store and geared its marketing toward a fun, hip image.

The now 28-store franchised company is experiencing rapid growth (it plans to double its number of stores by the end of 2012), mainly in the upper Midwest, by appealing to the 18- to 34-year-old crowd with late-night hours and valued-oriented offerings.

Scott Iversen, director of marketing for Toppers Pizza, says about half of its stores are in college communities.

"Both myself and several other executives grew up in the Domino's system, so we were familiar with how successful you could be on college campuses. There really wasn't a brand out there that was catering to that demographic," he says. "We try to really bring something fun to the pizza-buying experience." A signature menu item is Topperstix -- popular with the college crowd because of its value, Iverson says. The cheesy breadsticks are sold in single orders, but Iverson notes it's the triple order of 24 sticks with three dipping sauces that is most popular.

"The triple order is a lot of food for right around $10," Iverson says.

Toppers kicks into high gear during back-to-school season

"We get into the freshman orientation packet. We actually have a couple of vehicles branded and we go around and help students move in. We show up randomly at places and drop off free food," Iverson says. "It's really important every year to attract freshman on college campuses. We do a lot to try and get in front of them and be their brand of choice for the next four years."

2. Maya Papaya & Toni Macarony

Simone Oettinger, owner of children's clothing store Maya Papaya & Toni Macarony in Evanston, Ill., says back-to-school season means being prepared well ahead of time.

"In the fashion business, the seasons start a little earlier than in reality. So right now it's 100 degrees outside and I am receiving fall merchandise. In terms of preparing, I need to make sure that my merchandise for the fall is here in July because I have to unpack it, tag it and hang it," says Oettinger, who opened her store in 2008. "Fall for me starts in July."

Oettinger says personalized customer service -- remembering kids' names, what they like to wear, what interests they have -- is important. But owning a clothing store is still tough when you're competing with big chain retailers.

"Everybody talks about customer service, but customer service alone is not enough to stay in business," she says.

"I cannot compete with Gap. I cannot compete with Target. I have to have unique merchandise that they don't have elsewhere," Oettinger says. "The key for small business is differentiation. There is no point for me to stock commodities that people may find at Target or Gap."

3. Enviro Products

Capitalizing on the green movement, Enviro Products recently expanded its line of eco-friendly, reusable water bottles and water filtration systems to offer a lunchbox series.

Called Lunchopolis, the lunchbox targets students -- or rather, parents looking for the safest and most environmentally friendly products for their little ones -- even though it is appropriate for all ages, the company says.

Each Lunchopolis lunchbox comes with a drinking bottle and modular containers, all reusable.

Lunchopolis made up 5.6% of Enviro Products' corporate sales last year, with most of those sales taking place during back-to-school season, the company says.

Enviro Products is hoping the product will contribute to solving trash and litter problems. Citing NewDream.org, more than 380 billion plastic bags, sacks and wraps are consumed in the U.S. each year and can take up to 1,000 years to biodegrade, Enviro Products says.

4. BookRenter

Rising textbook prices can put a big strain on college students and their parents.

BookRenter's founder, Colin Barceloux, frustrated with his own payout for textbooks, saw an opportunity to satisfy a niche in the college-textbook distribution market by creating a book-rental program partnered with local bookstores and campus bookstores.

Students on average use about seven textbooks per semester, then tend to resell them, BookRenter CEO Mehdi Maghsoodria says. With the realization that's actually just an elaborate way to rent, the company provides an efficient way to reuse them while cutting student costs.

"The cost of a book is spread across multiple renters. It saves money for students, but it's a great business for us," he says, adding that the company makes roughly a 200% return on every book it buys. "It's amazing how many people are interested in this service."

So far BookRenter has partnered with more than 600 locally owned bookstores and campus bookstores, and the list continues to grow.

Textbooks are kept at either warehouses across the U.S. or in stores themselves.

"We have stores that are telling us what inventory levels they have," he says. "If a book is out, the system finds the book."

The growing industry for textbooks online is not a deterrent to the company, Maghsoodria says.

"We are a distribution channel. We don't sort of make a judgment of what the customer wants. We are managing the whole process for the school," he says.

5. IdeaPaint

Looking to serve schools themselves, IdeaPaint founders came up with a solution to create inexpensive dry-erase paint products that can create a whiteboard environment on any paintable surface.

As many school districts, particularly in urban settings, face inadequate funding and deteriorating facilities, IdeaPaint looks to ease that burden, it says. The environmentally friendly product requires only a single coat that can easily replace worn-out chalkboards and traditional whiteboards as well as go on nontraditional surfaces such as walls, desks, chairs, floors and lockers.

IdeaPaint's major clients include Boston Public Schools and Matanuska-Susitna Borough, Alaska's second-largest. By using IdeaPaint rather than new whiteboards, Matanuska-Susitna saved $650,000 across its 44 schools, freeing money for investment elsewhere, such as in teacher salaries, new technology and books, according to IdeaPaint.

The company also sells to commercial and consumer customers.

6. Therapedic International

Therapedic International says it's solved an age-old problem: Who wants to sleep on a used dorm room mattress? Who knows what's happened to -- or on -- it?

The mattress company, started in 1957, says it has recently created patented technology to eliminate (as opposed to temporarily masking) odors through a waterproof, antibacterial pad that protects mattresses by repelling and releasing stains.

Therapedic International pads, which debuted this summer, are sold at Bed, Bath & Beyond. The company is targeting college students with the pad, which comes in XL Twin for dorm beds.

"Parents looking to protect their kids going off to college recognize the health risks and germs ... in college dorms. This product offers them a quick-fix solution," the company says.

7. Uloop.com

Back-to-school season is busy for Uloop.com, which provides online college classifieds to students at more than 1,500 colleges and universities.

The company was founded in 2007 to offer an alternative to college bulletin boards, kiosks and local classifieds websites. At that time, there were few such companies solely for college students, which presented an opportunity.

Students can find classified ads for housing, buying and selling textbooks, roommate searches or finding part-time jobs, among other things.

As opposed to more general sites, such as Craigslist, Uloop says it creates a safe environment for college students to post by categorizing listings by university, rather than at the city level. Listings require an email address that ends in .edu, so the poster's name is fully displayed, the company says.

Listings are free for students. Uloop.com charges employers and landlords for job and housing listings. Employers and landlords can choose the relevant college campuses.

"Students are a profitable segment to target for Uloop.com, as they are active Internet/mobile users and employers and landlords are constantly looking for new ways to get their attention," the company says. 8. Sonu Beverages
Approximately 90% of Sonu Beverages' business is selling its organic, fruit-flavored, vitamin-enhanced water beverage to public schools.

The product is one of the top-selling items in the vending machines of New York City Public Schools, which launched a program last year to promote healthier beverage and snack options for kids.

The company wasn't always so kid-focused. It originally sold a 16-ounce product with more calories marketed to adults, but after focus groups and meeting with school officials, Sonu came up with a kid-friendly line of products.

Focusing on schools "really lends itself to a captured audience, and it limits the financial investment required," says Kara Monteiro, chief operating officer at Sonu. "We learned about nutritional guidelines and altered the product to make it student friendly. We completely revamped our line to cater to students, and as a result we're getting requests from public schools because a lot of them are being required to follow strict nutritional guidelines."

The company started in New York and now sells to more than 8,000 schools there and in New Jersey, North Carolina, Illinois, Maryland, Pennsylvania, Delaware, Virginia and Ohio, she says. One challenge is that nutritional guidelines differ among school districts.

"We're getting requests for lot more. We're basically trying to keep up," Monteiro says. 9. Ship2School
Ship2School seeks to relieve anxious parents from the hassle of moving kids into a dorm room.

The service comes in handy, particularly if a student is going to school out of state or if there are strict campus move-in rules, such as time limits to parking areas, the company says.

Dan Abrahamsen, vice president of operations at Ship2School, says the company expanded from its general luggage delivery service to offering similar services to students after workers recalled their own dorm move-in struggles.

"There are easier and cost-effective ways to move to and from college that many students and their parents simply do not know about," Abrahamsen says.

The company provides students and families with a moving kit that includes six boxes, bubble wrap and a tape dispenser to pack belongings. Ship2School will then deliver across the U.S. and Canada at rates starting at $149.

Ship2School uses a network of local agents and shipping companies such as FedEx, UPS and DHL.

10. bd's Mongolian Grill

The ability to create your own meal from a variety of meats, seafood, veggies and sauces, all freshly cooked on a Mongolian-style grill, makes bd's Mongolian Grill appealing to college students.

Since 1992, the chain has grown to 35 restaurants, with at least one franchisee taking advantage of the student market.

Tim Hobart owns six of the popular restaurants in Ohio, all near college campuses.

"The student target market is a great in many ways," Hobart says. "They bring a lot of energy and excitement to the restaurant, which is what we are all about. They are prime candidates for the customization and creative nature of our concept. The students also double as great prospective employees."

The student market is profitable because the chain is often chosen for special occasions for those on a tight budget, as well as for large group outings.

Additionally, "students are also very loyal, leading to many repeat visits," Hobart says.

In celebration of back-to-school, Hobart's restaurants are discounting its lunch special by $2, to $10.99.

 

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