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Nine Business Fields Showing Recovery Signs
The beleaguered U.S. consumer is beginning to pry open his wallet again, after keeping it mostly slammed shut during a couple years of deep recession. Consumer spending, as reported by the Commerce Department, has posted modest gains for eight straight months. A survey by the Raleigh, N.C., financial analysis firm Sageworks shows that nine small business sectors have benefited most from increased consumer spending. In each sector, 2010 revenues increased over spending levels seen in the previous two years. Here are the nine improved sectors, from bottom to top. By Rob Reuteman

Car Lot

No. 9. Automotive Body, Paint, and Interior Repair and Maintenance
2008: -1.37%
2009: -3.73%
2010: -.03%

“I've certainly seen an increase in discretionary customer spending in the last 12 months. People appear more willing to spend money to fix the eyesores on their drivable cars, including minor body damage and fresh paint on old and faded vehicles. We have also seen an increase in customer willingness to purchase a higher quality paint job. Many customers will now opt for the more visually appealing and longer-lasting signature paint jobs, over the enamel coatings we offer at a lower price point.”

- Solomon Cramer, owner of Maaco in Middletown, Penn.

REUTERS

John Deere Logo on a Tractor

No. 8. Commercial Machinery and Equipment Repair
2008:+6.28%
2009: -5.06%
2010: +1.73%

“I’d say our service and repair business was up 20% last year. At the same time, new equipment sales were down, so I think companies were spending money to repair equipment rather than replace it. This year so far, we are seeing more sales of new equipment. We’re hoping to see an overall 10% growth in 2011. What worries me more than the American economy is what’s happening in Japan, where we get a lot of our engines and parts. I’m being told by suppliers that we should be OK until mid-summer. But my biggest concern is what the trickle-down effect from Japan will be to our business.”

- Carl Witte, owner of Maximum Outdoor Equipment & Service in Wichita, Kan., which sells and repairs lawn and garden equipment for 1,500 commercial operators

REUTERS

Car Undergoing Maintenance

No. 7. Automotive Repair and Maintenance
2008: +2.19%
2009: -1.71%
2010: +1.87%

“Since there are fewer [mechanic] bays in our markets, with dealership and competitor closings, 2008 and 2009 saw positive year-over-year same store sales growth, and 2010 resulted in 94% of my locations showing same store sales growth and 56% achieving all-time store records. Since the collapse in the economy in 2008, we have been focusing on three areas: our systems - we're putting money into our physical locations and our computer systems; our people - recruiting, retaining and retraining; and our market voice - increasing our media spend.”

- Adam Fuller, part owner of 26 Express Oil Change & Service Centers in Georgia, Alabama, Florida, Louisiana and Tennessee

REUTERS

Car Wash Shop Reuters

No. 6. Car Washes
2008: -.81%
2009: +3.96%
2010: +2.42%

“Our profit/loss reports show more than a 30% increase in revenue from a year ago. I think people are realizing that they need to take better care of their car to make it last longer and get better resale value. People had trouble finding good jobs, they were doing what they had to do to get by. Things started improving last year. Maybe they’re not thinking about buying a new car, but at least making their car look new.”

- Teresa Tucker, office manager at Johnny’s Car Wash in Fairfield, Ohio

REUTERS

Funeral Home Services Reuters

5. Death Care Services
2008:+4.82%
2009: -1.05%
2010: +3.54%

“The average expenditure did go up last year, we saw a little bit of an uptick in spending. The past few years, people have been more cautious. We are seeing more people select a reduced type of arrangement. It’s related to the economy, but also to a lack of understanding of the cost/benefit ratio concerning the ceremony of saying goodbye. The emotional benefits always outweigh the costs. More people were selecting ‘no ceremony.’ People have always watched the dollars they spend at funeral homes closely, but if the economy improves, I’d expect there might not be as many people electing to do nothing.”

-Chris Butler, Butler Funeral Homes in Springfield, Ill.

REUTERS

Nail Salon Shop Reuters

No. 4. Nail and Skin Care Services
2008: +3.63%
2009: -2.98%
2010: +3.93%

“We have seen a sudden climb in business, and the clientele is a wider range, especially men getting skin care services. It used to be a certain percentage of people would pay for skin care. I think nowadays more people are familiar with services like microderm abrasion, and we’ve seen an expansion in the percentage of people purchasing such services. I also think a few years ago, when bad things started happening in the economy, people thought ‘I’m not gonna spend my money, I’m going to wait and see what happens.’ Now I think people are getting desensitized to all the bad news and are taking a little extra money and spending it on themselves to look better.”

- Candice Pettivich, office manager at Mary Lynn’s Massage & Day Spa in Gilbert, Ariz.

REUTERS

Beauty Salon Reuters

No. 3. Beauty Salons
2008:+3.88%
2009: -3.35%
2010: +6.75%

“It’s starting to turn a little bit. I can see people are starting to open their wallets a little more. I’ve been in this business for 30 years, and usually the last thing people let go is their hair, but people have really been stretching out the past few years. Business is not as good as it was in early 2008. Most of my customers are not going to cut back on a great haircut, but I’ve seen them cut back on coloring, straightening eyebrow waxing. But it’s starting to come back. I think people realize the world is what it is, but they need to look good and feel good.”

- Rita Simmons, Hair Art by Rita in Tempe, Ariz.

Pet Wash Bubbles Galore

No. 2. Other Personal Services (Pet care, photofinishing, valet parking, other misc)
2008: -2.79%
2009: -1.83%
2010: +11.9%

“I’ve seen a steady incline in business. People who once were getting their pets groomed every six weeks cut back to eight or 10 weeks a few years ago, and at least that hasn’t gotten worse; it’s stabilized over the past 10 months. I was worried whether, with the economy going down and people worried about keeping their homes heated, they were going to continue paying to keep their pets cleaned. But January and February are traditionally very slow months, and this year business has been fairly steady. Three other grooming shops in the area – one shut down, one moved and one cut back to two days a week, so I’ve benefited from that. I’ve also seen a pickup in business with new dogs, so people seem to have enough confidence these days to take on a new pet.”

-Jayson Mence, owner of 4 Paws Pet Care in Stevens Point, Wisc.

Church Chapel Reuters

No. 1. Religious organizations
2008:-1.03%
2009: -6.25%
2010: +12.37%

“Interestingly, religious organizations rank first. Those with the ability to contribute to charity will do so in hard times. Look at Haiti and other disasters where religious organizations continue to provide substantial numbers of relief dollars.”

- Nicole Wolfgang, senior analyst Sageworks, Inc.

“Our North American contributors gave 20% more in 2010 than 2009. We believe improved conditions in personal finances and the better financial health of contributing organizations ensured that they could continue to give and even increase their giving. The increase in our revenues is also the result of reducing our expenses, controlling our costs. We have not filled positions, we have doubled up on duties, we’ve reduced our pension benefits. When our health insurance provider increased costs by 34% last year, the staff elected to pay for the increase out of pocket. Our contributors believe in our mission; we did very good work in Haiti and Chile last year. In our response to global disasters, we exercised our fiduciary responsibilities openly and honestly, and we feel that our credibility has resulted in increased giving.”

- Eron Henry, associate director of communications for the Baptist World Alliance in Falls Church, Va.

REUTERS

Nine Business Fields Showing Recovery Signs

The beleaguered U.S. consumer is beginning to pry open his wallet again, after keeping it mostly slammed shut during a couple years of deep recession. Consumer spending, as reported by the Commerce Department, has posted modest gains for eight straight months. A survey by the Raleigh, N.C., financial analysis firm Sageworks shows that nine small business sectors have benefited most from increased consumer spending. In each sector, 2010 revenues increased over spending levels seen in the previous two years. Here are the nine improved sectors, from bottom to top. By Rob Reuteman

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