Thread: Change in Buying Habits - Business Opportunity?

Consumers change buying habits, but will it last? - Yahoo! News




Reading this article made me think..... what types of business opportunities will the current economic situation bring about? A few possible options came to mind from this peice:

• shoe repair
• 2nd hand clothing shops
• byob restaurants (allows people to eat out without spending quite so much)
• auto repair (people repair old cars as opposed to buying new)
• bars (have read that they often do well in recessionary times)

This article also reminded me of our July book - 'Your money or Your Life'. Perhaps sales of that book will be up this year??

**Speaking of bars - I also read an article the other day about a bar owner in Hoboken, NJ - owner had been creating new 'happy hour' ideas, based on the current economy. For example, he has a standing offer - which states that anyone holding a foreclosure notice gets their drink of choice, on the house. His sales were up over 20%.

Any thoughts?

Originally Posted by phlgirl

Consumers change buying habits, but will it last? - Yahoo! News





Reading this article made me think..... what types of business opportunities will the current economic situation bring about? A few possible options came to mind from this peice:

• shoe repair
• 2nd hand clothing shops
• byob restaurants (allows people to eat out without spending quite so much)
• auto repair (people repair old cars as opposed to buying new)
• bars (have read that they often do well in recessionary times)

This article also reminded me of our July book - 'Your money or Your Life'. Perhaps sales of that book will be up this year??

**Speaking of bars - I also read an article the other day about a bar owner in Hoboken, NJ - owner had been creating new 'happy hour' ideas, based on the current economy. For example, he has a standing offer - which says that anyone holding an foreclosure notice gets their drink of choice, on the house. His sales were up over 20%.

Any thoughts?

This comes down to 'normal goods' vs. 'inferior goods' and 'durable goods' vs. 'non-durable goods'.

Normal goods are goods that increase in demand as [disposable] income increases, while inferior goods increase in demand as [disposable] income decreases.

Durable goods are good that last for a while before needing to be replaced (I believe -- by definition, at least -- durable goods are goods that last at least two or three years.). Nondurable goods are just the opposite -- things like food (gone once you eat them), rubber bands (break easily), and toothpaste.

During times of a struggling economy and/or high inflation, the demand for inferior goods increases. The demand of non-durable goods is usually unaffected (or insignificantly affected), but the demand for durable goods decreases as people decide that they can repair or salvage their current durables (such as TVs, shoes, etc...).

As far as more for your list:

• Used cars (If you can't fix your old one, a used car is still cheaper than a new one!)
• Garage sale items
• Movie rentals (Instead of paying $10/ticket, rent one for half that, and let as many people watch as you want! Oh, and spend $1 on popcorn instead of $7. I'm not sure about this one, but it seems to make sense. I think I heard it somewhere before, too.)

I'm too young to remember much about the state of the economy in the early '80's but I've been told that low to medium priced "feel good" products sold very well as a way for people to boost their moods. There was also a demand for making existing products such as cars last longer. I would say that most businesses related to second hand products or repair would do well. Some do well in any economy. I have a friend who was doing $100-150k net with a used computer store.

Regarding a bar, they would probably do very well right now. The problem I always look at are the hours that I may potential be confronted with a problem to solve. A bar may be open from 09:00 to 02:00 and I would rather be sleeping at 01:00 than dealing with a manager who can't solve a problem himself.

Also take into account that our economy is cyclical and most consumers will drop the used/lower end products and services as soon as they have money in their pockets.

Yeah there will usually be a period of savings and cutting back but all that results in pent up demand. When the recovery happens the public will be back to spending 110% again.

Very good point about it being cyclical. Likely that a glut might be created with any of these business types. Would have to adapt quickly.

White8 - I am with ya.... simply cannot imagine owning a bar or a restaurant - just not in line with my lifestyle goals. The guy in Hoboken cracked me up though. Makes me want to drop in on that bar next time I am there!!

Yankees - thanks for the perspective. I think it's awesome that you can apply your education to real life events - I certainly never could when I was your age. It's kinda cool reading it and having it actually make sense.

Originally Posted by Yankees338

Movie rentals (Instead of paying $10/ticket, rent one for half that, and let as many people watch as you want! Oh, and spend $1 on popcorn instead of $7. I'm not sure about this one, but it seems to make sense. I think I heard it somewhere before, too.)

Cable and satellite providers are doing very well these days, along with companies like Netflix. I'm sure brick and mortar movie rental stores are enjoying similar success.

Kimber -

I had never heard of the 'lipstick index' before. Very interesting - thanks!

Funny you should mention it because last night I was wondering if, perhaps, retail sales of nail polish would be going up - due to more 'at home' manicures and pedicures.

I found this old Revlon ad.....made me laugh.

The Lipstick Index

I think some changes will be here for the long run. Big engines will probably be on its way out, not just because of the economic conditions and gas prices, but because we are reaching a tipping point with CO2 emissions and climate change (thanks Al Gore).

Others that are more about convenience will suffer until the economy rebounds (do you really want to wash, dry and iron your clothes when somebody else could do it for you for a decent price and I have disposable income?)