It’s no secret that the recession has hit many small businesses especially hard; causing record numbers to fail and close. However, it seems to have had a bright shiny silver lining for others. As millions of jobs are lost, home foreclosures continue to rise and consumer confidence wanes, many businesses are enjoying record sales and rising numbers of new customers.
So, if consumers and business owners are not buying big ticket items such as cars, homes, furniture, appliances, taking vacations, hiring workers and expanding their business what are they buying? According to a survey of 182 members of the National Association for Resale and Thrift Shops, 74.2% reported increased sales and 89.9% reported new customers. The National Pawnbrokers Association (2700 members) reported that business is up anywhere from 10-30%.
Naturally, companies offering debt restructuring and counseling, mortgage and foreclosure rescue are seeing increases in business. Automobile, boat, and motorcycle repossession businesses are enjoying a boon. Scott Friga of “Gulf Coast Recovery in Cape Coral, Fl reported that his business was up 80% over the previous year.
In an all out effort to cut expenses, consumers and business owners are choosing to hang onto what they have and repair it instead of purchasing new items. Consequently, businesses that offer repair and/or refurbishing services to consumers and/or businesses are doing well. That includes services related to the maintenance and repair of homes, office equipment, automobiles, furniture, clothing and shoes.
In response to the public’s growing interest in saving money is the emergence of group buying sites such as Groupon, LivingSocial, Scoop ST and Tippr. Businesses pay a fee to publicize a one-time special offer that is only available if enough people are interested. The deals range from 5-90% on various goods and services. While many small businesses were reluctant to give this a try, they have proven to be quite effective for others.
Once again liquor sales are proving that alcohol is a recession proof business. And, since we’re making a positive correlation between vice and the recession, we might as well look at the upside of an increase in fear and crime. According to Jim Brush, CEO of Sentry Safe in Rochester, NY, his business is up 70%. Private investigators are getting more business as a result of increasing numbers of fraudulent worker’s compensation claims and bad business dealings. So, for some, at least, crime does pay.
Apparently, some bankruptcy and divorce lawyers are cashing in as well. The United States Department of Justice reports that bankruptcies have grown from a mere 110,000 in 1960, to over 1.4 million in 2009. This represents around one third of Americans. The divorce rate has also increased from around 30% in the 1970s, to over 51% in the late 1990s (US Census Bureau, 2002).
Elizabeth Warren, former Professor at Harvard Law school and Assistant to the President and Special Advisor to the Secretary of the Treasury on the Consumer Financial Protection Bureau (since September 2010), found that 91% of bankruptcy filers suffered a job loss, medical crisis or divorce. Rachel Foley, a Bankruptcy Attorney in Kansas City, Missouri wrote an article titled, “Does Bankruptcy Cause Divorce?” when she noticed that a high percentage of her clients were coming back after the bankruptcy to file divorce. Apparently, couples tend to blame each other for their financial woes. With over 1/2 of all first marriages ending in divorce and nearly a 1/3 of the population filed for Bankruptcy last year, hard times are definitely good for some lawyers.
One of my favorite examples of “turning recession lemons into profitable lemonade” is a company started by Madeline Muney Passarelli called, “Wear Today, Gone Tomorrow”. With nearly 15 years experience in the fashion industry, it dawned on Madeline that many more women could dress in high fashion and afford luxury items at a fraction of the cost if they rented them. Brilliant! It reminded me of when I was young and had a very tight budget for my wedding. One day, it dawned on me that I could rent a beautiful Paris gown for a fraction of what it would cost me to buy it. Plus I didn’t need to worry about storing it afterwards.
So, how can you capitalize on the opportunities presented by the recession and the misfortunes it has caused others? The first suggestion I would make is to find out about the real needs of your customers and prospects. How can you made their lives easier and/or better? Then, adapt your products/services and marketing accordingly. Next, think about how you might adapt your products and/or services to meet some of the emerging consumer trends such as saving money, saving time, reducing waste and preserving what has meaning and intrinsic (irreplaceable) value such as family traditions, heirlooms, antiques, historic buildings, institutions, communities, and the environment.
I would love to know your thoughts and suggestions for capitalizing on the recession. Please leave your comments at the end of this article. If you would like to contact me, you can do so by visiting my LinkedIn page or emailing me at email@example.com.
Posted by: Susan Fronk