Are we there yet?

The U.S. economy is slowly recovering from years of no growth and slow growth. Unemployment is still not anywhere its ideal 3% rate, but at 8.1% as of November 2012 is an improvement over the year before. In November 2011 the unemployment rate in Florida was 10.2% – so quite a difference. Not to say we're totally in the clear. Just somewhat better.

One thing to consider is which types of businesses and industries do well in a poor economy. For example, our industry, legal document preparation does well in general during a poor economy. People who cannot afford attorneys turn to us to help them do it themselves. Even those that can afford attorneys, choose DIY over paying an attorney if they feel that there legal matter is routine, or something that is not going to be contested.

Within our legal document preparation industry, there are certain types of projects that are most popular during a poor economy. Bankruptcies, obviously. As people are trying to recover from their personal economic challenges, bankruptcy is, for some, the best alternative. Bankruptcy petition preparers have long been recognized under federal law as actors in consumer bankruptcy document preparation. Bankruptcy petition preparers typically charge around 10% of an attorney charge for bankruptcy petition preparation. Credit repair is another popular niche, also for obvious reasons. Many people who had always been able to maintain good credit ratings in the past were unable to sustain those high scores during the economic down turn. Debt defense, mortgage modification, foreclosure defense, are also common legal tasks that people may do themselves or seek out document preparers to help them format their paperwork and follow procedure.

Divorces in general likely increase during a poor economy. And as people cannot afford divorce attorneys, they increasingly turn to document preparers for help. In Sarasota County, at least one of the parties in most divorces was pro se. An article published in the Herald Tribune on September 9, 2012 states: “There is no question, though, that pro-se divorces are the new normal. For the past five years, 55 percent of divorce cases in Manatee and Sarasota counties have included at least one spouse who is pro se”.

Other industries that are counter cyclical include:

• Home Health Industries
• Employment Services
• Business Support Services
• Investigation and Security Services
• Services to Buildings and Dwellings
• Management, scientific, and technical consulting services
• Gas stations
• Computer systems design and related services

Each of the above industries realized greater than a 10% average increase in sales over the past twelve months. The DIY industries in general have improved while the service industries have faltered or failed. Traditional types of services such as hair and nail salons, restaurants, pet care services, house cleaners and landscapers have fallen dramatically over the past year as more and more consumers are stretching their dollars and doing more with less.

According to the New York Times – and relying on data from www.sageworks.com