A Louse-y Business

Date posted: August 10, 2012

By Rieva Lesonsky

Sometimes it seems this newsletter should be subtitled “based on a true story.” Which is as it should be, since things don’t happen in a vacuum, and chances are that what affects you also impacts millions of other Americans. That’s why so many successful small business concepts are inspired by personal need.

Just a few years ago there was a lice outbreak here in Southern California. Many local schools were constantly sending notes home with the kids, asking parents to take protective measures. When my friend’s kids got lice (head lice carry no disease) she employed both new (shampoo) and old (smother the bugs in mayonnaise) methods to tackle the problem.

The bad news is head lice are growing ever more resistant to traditional treatments. The good news is this has created business opportunities as entrepreneurs across the nation are starting businesses to help beleaguered parents.

A recent article in Bloomberg Businessweek points out that with a few exceptions “the lice business is unregulated” in the U.S., which has helped several entrepreneurs build multimillion-dollar businesses. Some of these businesses are focused on creating treatment shampoos and oils. Bloomberg Businessweek says Fairy Tales Hair Care sells more than $4 million of products annually.

But the bigger opportunity here may be in offering services. By the third time my friend’s kids got lice, extreme frustration set in, and she sent one of them to a lice removal company, where her daughter sat in a hair-salon-type chair while an attendant combed through her hair looking for the bugs. (The treatment lasts several weeks.)

Bloomberg Businessweek reports other companies have had great success making house calls to do the same thing (as well as to help strip the bedding, etc.). In fact, the magazine says one such company, The Lice Treatment Center, charges between $200 and $500 for a house call. The company, started by two entrepreneurs eight years ago, now has 100 employees in 14 states.

With school starting soon, lice season is just beginning. How big is the opportunity? Well, as Richard Pollack, an entomologist who teaches at Harvard told Bloomberg Businessweek, “The louse servicing businesses seem to be spreading faster than the lice themselves.”

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