From thrift stores to repair shops to auto garages, the recession brings new opportunities to plenty of small businesses
The current economic picture is certainly a gloomy one, with massive layoffs, bankruptcies, the collapse of financial institutions, and a severe credit crunch. But the recession has also injected life into a slew of small businesses that are thriving either in spite of or because of the economic downturn, giving new relevance to the old adage that one man's misfortune is another's opportunity.
Among those businesses that are thriving are pawn shops and thrift stores, which have traditionally catered to those in tight financial straits and which have historically seen an uptick during economic slumps. They're reporting higher volumes of business and even a broadening of their customer bases among those who have recently found themselves with greatly diminished stock portfolios or among the unemployed. "More people are trying resale than may have done before," says Adele Meyer, executive director of the National Association for Resale & Thrift Shops, a trade association based in St. Clair Shores, Mich. "And once people shop resale they realize what value and quality they're getting for the price. They become hooked, and this becomes their way of shopping." Now, many thrift stores are finding that their inventories are running especially low: Business is booming, and goods for resale aren't being replenished as fast or as easily.
Keeping Things Running
Others who are getting a financial jolt—a positive one— are auto mechanics and other repairman, who have seen record business in some cases over the past six to nine months. With wallets stretched and credit tight, many people are hanging onto their cars, appliances, and even shoes rather than replacing them. "Our business in the last seven to nine months has been better than compared to the last four to five years," says Dick Whittington, owner of Leon's Shoe Shop in Shreveport, La.
Fear and crime has also boosted a number of businesses. Sales of home safes are on the rise, while several private detective agencies are also reporting a surge in business. Repo men across the country are doing record levels of business, thanks to the high number of loan defaults on big ticket items such as cars, boats, and motorcycles.
The record number of foreclosures and ballooning consumer debt has been a windfall for businesses that consolidate, restructure, counsel, and settle debt and foreclosures. However, an increase in fraudulent firms claiming to help consumers with their debt and mortgages has also been on the rise.
So while many businesses are shutting down or limping along, there remains a sturdy group of small firms that have found opportunity. Flip through our slide show to see nine small businesses that are booming during the recession.