Success stories George Alex, 2009 February 6, 2009The current economic situation is certainly not good, with massive layoffs, bankruptcies, the collapse of financial institutions, and severe credit problems. But the recession has also injected life into a number of small businesses that are prospering, giving new meaning to the old saying that one man's misfortune is another's opportunity. Among those businesses that are prospering are pawn shops and thrift stores, which have traditionally worked with people in tight financial situation and which have historically seen a boom during economic crises. They're reporting higher volumes of business and new customer groups. More people are trying resale than may have done before. 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 stocks are sold very quickly: Business is really booming.KEEPING THINGS RUNNING Others who are getting financial benefit are auto mechanics and other repairmen, who have seen record business results over the past 6 to 9 months. With thinner wallets and no credit cards, many people are hanging onto their cars, appliances, and even shoes rather than replacing them with new ones. "Our business in the last seven to nine months has been better than compared to the last four to five years," says the owner of a Shoe Repair Shop. Fear and crime have also boosted a number of businesses. Sales of home safes are on the rise, while several private detective agencies are also reporting a rise 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. So while many businesses are shutting down or doing their best to survive, there remains a group of small firms that have found opportunity.In the Thrift Historically, thrift stores have prospered during tough economic times. The National Association for Resale & Thrift Shops is reporting big increases in sales. A survey taken last fall showed that 74.2% reported increased sales, and 89.9% reported new customers. "We have different people and people groups who shop at our shops, and more younger people are coming in. They are looking for cheap ways to change their wardrobe." But there is a big competition from retail and department stores that have greatly reduced prices, in some cases by 70%. "People are looking for bargains, and if department stores are running huge sales, it puts a new pressure on our business."Pawnshops A longtime source of ready cash, pawnshops have seen a steady rise in business as the economy has fallen. Pawnshops generally keep an item during a statemandated period of time. After that time, customers can reclaim the item if they repay the loan and interest. If they default, the shop is free to resell the item, and neither loan nor default is reported to credit-rating agencies. The president of the National Pawnbrokers Assn. says business is up "from 10% to 30% depending on the region." He also says that there are many new groups of customers. “Normally we see blue-collar, low-to-middle-income folks. Now we're seeing more middle-and upper-income people. A lot of people are having trouble going to the bank to borrow money."Repo Men One man's misery is another man's fortune, if that man happens to be in the business of repossession. With the waves of layoffs and rising debts, repo firms are reporting record business. That's especially true in states hardest hit by the housing crisis, such as Florida and California. In November, the owner of Gulf Coast Recovery in Fla., told The Economist that his business reposessing cars, boats, and motorcycles was up about 80% from the previous year.Repairing Instead of Replacing Cash-strapped consumers are turning to repair services that can help them use items longer rather than replacing them with new ones. Businesses from car mechanics to shoe repairmen are benefitting from a rise in business. Shoe Repairs report their business is up 40% in just three months. "I've had more customers in the last four months than in the last four years," says the owner of a Shoe Repair Shop. "And I'm seeing a lot more people under 30. People are saying they can keep five of their favorite pairs of shoes and save money."A Safe Business Perhaps it's not surprising, at a time when banks are closing and major financial institutions are collapsing, that many individuals are finding comfort locking their money away in home safes. SentrySafe in Rochester report that their business is up 70%. As Lehman Brothers and other financial firms began to crash in October, BusinessWeek reported that sales at St. Louis' Baumann Safe & Alarm had jumped 10%. "Usually when times are bad and banks are bad, people want safes at home to keep their money in," said their president.The Debt Business With consumer debt and bankruptcies on the rise, so is business for firms specializing in credit counseling or debt and budget management. They typically charge a fee that can range from 10 to 60% of the outstanding debt. A managing partner at such a firm says their business has doubled every six months since the firm opened about four years ago. Nationwide they are so busy that they recently hired new staffers. "Debt management is more popular now because more companies and people need help." If the economy continues with the crisis, these firms will see astronomic growth.Detective agencies When the economy is in crisis, crime often goes up, and that means an increase in business for private detectives. The owner of an Investigations Firm in California says his business has increased about 40% since last fall. "I have a pretty general practice, and I am up in all areas," he says. He's investigating workers' compensation claims and real estate fraud. "People defrauding other people, or businesses or real estate deals that have gone bad—investigators in those areas are going to see an increase."In the Drink While consumers have cut down outside entertainment such as going out of town, they haven't necessarily stopped alcohol consumption. Instead folks are increasingly enjoying their spirits at home. Alcohol Commissions across the country are reporting a rise in the sale of wine and spirits. The Ohio Commerce Dept.'s Liquor Control Div. reported that sales of spirits hit a record of $719.2 million last year.What do you think of these businesses? Do they prosper in your country? Give other examples too.