CHICAGO (Reuters.com) -- When former art director Ellen Diamant had a baby in 2000, there were few diaper bags on the market that were both utilitarian and good-looking. So she designed one and built a business around it.

"The selection left much to be desired," recalls Diamant, who runs New York-based Skip Hop with her husband Michael and a team of 22 employees. "I thought the bags were horrendous. They didn't do anything. None hung on the stroller."

Today the company pulls in some $10 million in yearly revenue, offers products ranging from crib bedding to bottle dryers, and recently had a new line of its colorful diaper bags in Target stores.

Throughout the country, "mompreneurs" are tapping similar gaps in the market for products for babies and parenting. They are redesigning everything from toys to car seats and clothing, in response to heightened awareness about product safety issues and mothers' demands for fuller and more fashionable lifestyles.

"Their personal experiences help them to form business decisions," says Stephanie Azzarone, who runs Child's Play Communications, a New York-based public relations agency that represents products and services targeted to moms and kids, including toys, apparel, home furnishings and food.

"There are all kinds of businesses tapping into the trend," says Azzarone, an early mompreneur who started her boutique firm some 20 years ago. "Everyone has some sort of variation on traditional parenting stuff."

Little data exists on how many of the estimated 10.4 million women-owned U.S. businesses were started to plug holes in the parenting space, but there's no doubt they represent a growing niche in the entrepreneurial market.

"More and more of these women, who are leaving corporate America to stay home with their children, are women who have had professional and managerial careers," says Sharon Hadary, executive director of the Washington-based Center for Women's Business, which researches women-owned businesses.

"Now they're looking for products they need as a mother and they don't see them, so they go out and invent," she says. "Many of them have the energy and ambition and the time to create products and services and make some money from them."

Marketers are paying attention, says Elizabeth Barton-Fongemie, vice president of sales for Hartford, Connecticut-based PME Enterprises LLC, which hosts expos and special events. The firm is gearing up for the fourth annual M2Moms conference dedicated to marketing to moms, which will be held in Chicago in October.

Last year, M2Moms drew standing-room-only crowds. The conference has attracted prominent sponsors, including Time Inc.'s Parenting Group, Eastman Kodak Company, DisneyFamily.Com and Nickelodeon's ParentsConnect.com.

"It's two days of insight on the mom space," says Barton-Fongemie, herself a mother, who says parenting has helped her tune into the market for these products. "There's a lot of power in moms' hands right now. These moms are overwhelmingly online; they're listening to other moms."

Savvy women entrepreneurs are tapping into mommy needs on the blogosphere. There are social networking sites such as momcafe.com, where members share stories and trade ideas on everything from carpooling to finding nannies, to sites that offer tips and products for self-affirmation and the cultivation of a mom's broader interests.

One such site is Hot Moms Club, which defines itself as "the place where moms have more fun." The space, which features photos of attractive moms in their 20s and 30s, offers advice on topics such as beauty, recipes and relationships, as well as an interactive blog and merchandise with the Hot Moms Club brand.

"Doing things for yourself can be a benefit for your child," says founder Jessica DeNay, a single mom and former teacher who runs the Hot Moms Club in a detached office outside her Santa Monica, California home with co-founder and celebrity stylist Joy Bergin and a small staff.

"Being a mom and being hot or sexy isn't mutually exclusive," says DeNay, whose site, which began as a joke among friends, now has backers such as Suave personal care products. It is also seeking its first round of angel investor funding.

Steady stream of new products

Dapple founders Tamar Rosenthal, left and Dana Rubinstein.

Just days ago, former New York attorney Dana Rubinstein and her business partner, Tamar Rosenthal, both young moms, began to sell their line of baby-safe dish soaps under the Dapple brand at retailers in Manhattan.

Working out of Rosenthal's apartment, the self-funded entrepreneurs spent two years developing the products, locating manufacturers and generating interest among mothers.

Armed with a Yahoo grant that includes $20,000, web support and mentoring from the likes of makeup guru Bobbi Brown, the team is hoping to gain broader distribution and start selling their products on the Internet. They also have plans for a baby-safe toy cleaner.

"We came up with these products out of our own needs," says Rubinstein. "From the time we had the product in hand, we've had fantastic response."