Sageworks released a study this morning outlining what types of retailers are holding their inventory the longest over the past 12 months, compared to pre-recession 2006.  Jewelry stores are holding their inventory 19 days longer in the last 12 months, compared to 2006, the largest increase of any retail sector. Nurseries and lawn equipment stores are second on the list, with an increase of 14 days.  As we all know, the longer it takes for inventory to turn, the more serious the implications are on cash flow and profits.

Below is a list of successful small businesses that those who are unemployed may want to consider starting. These businesses have been very successful despite the downturn and are a particularly good idea for new entrepreneurs to consider because they are service based and have low barriers to entry. They offer great opportunity for growth and profits, and carry little to no overhead expense.

Computer program design – People have big ideas but don’t necessarily know how to make them happen.  This is where computer systems designers come in; they design technology to fit their customers’ needs.  Computer systems designers have seen their sales increase by 10.4% over the last 12 months.

Child day care – While day care can be a big expense for a family, it is also one of the most important.  Believe it or not, people are still working and leaving their children in daycare. Sales of daycare providers have grown by about 4.3% over the last 12 months.

Consulting – This is especially a great option for industry experts in any given topic (real estate, retail, advertising, etc.) that have recently been laid off. People           always need advice, especially when trying to navigating out of tough economic times.  Management and technical consulting firms have experienced growth of 5.4% over the last 12 months.

Hair and nail services ­– People haven’t been letting their looks go by the wayside and it is unlikely that they will start now, with signs of an upturn imminent. Personal care service providers saw their sales grow by 5.1% over the last 12 months.

Home & office painting – While many people aren’t moving right now, they are taking care of what they currently own or rent. Painting contractors experienced sales growth of just over 5% over the last 12 months.

The commerce department reported a 0.8% unexpected gain in construction spending for April, marking a two month consecutive increase despite predictions that spending would drop 1.2%.  

Sageworks Index data also supports a rise in construction activity, but for an additional consecutive month as the data below indicates that sales rose 4.55 percent in May after rising 2.94 percent in April and 1.66 percent in March.

Housing starts also showed a surprising 17.2 % increase in May after a 12.9% drop in April. While housing starts provide an outlook for future construction activity, the large number of unsold homes on the market will be a limitng reactant for new growth in residential construction.

With all of the talk of large bankruptcy filings, Sageworks released a list of 10 types of private companies that are most likely to file for bankruptcy in the coming months. The list is based on the average debt-to-equity ratio in the industry over the last 12 months. A high debt-to-equity ratio generally means that a company has been aggressive in using debt to finance growth. 

Below is a new list of 7 things that consumers are still doing.  People are fixing their cars, remodeling their homes, and still making trips to the dentist.  While some consumer behaviors have changed, it is nice to hear that the world hasn’t stopped in the current economic climate.

 7 Things Consumers Are (Still) Doing:

• Auto repair shops grew their sales by an average of 2.4% over the last 12 months.
• In contrast, car dealerships saw their sales decline by 9.7% in the same period.

 2) Remodeling and fixing their homes instead of moving.

• Building equipment contractors (such as electricians, plumbing and heating contractors) saw their sales increase by 4.6% in the last 12 months.
• In contrast, home builders saw their sales decrease by over 5% in the same period.

 3) Shopping at grocery stores more than eating out.

• Grocery stores experienced average sales growth of 6.7% over the last 12 months.
• Sit-down restaurants saw growth of 3.9% in the same period.

 4) Attending technical and trade schools.

• Trade and technical schools saw their top-line sales grow by 7.8% in the last 12 months, compared to growth of 5.9% in 2007.

 5) Going to the dentist.

• The average dentists’ office experienced sales growth of 6.9% in the last 12 months, up from 4.9% in 2007.

 6) Getting personal care services such as haircuts and manicures.

• Hair salons, barber shops, nail salons, and skin care providers experienced an average of 4.5% sales growth in the last 12 months.

 7) Visiting an accountant.

• Accounting firms saw average top-line revenues grow by 10.2% over the last 12 months, putting the accounting industry in the top 20 industries in the country by sales growth.

With all of the talk of H1N1 Virus/Swine Flu, doctors are probably no longer worrying about navigating their practice through the economic downturn.  People who may have been trying to cut expenses by putting off their trip to the doctor are unlikely to be doing so if they think their illness could be related to the new virus.

Data from Sageworks shows that doctors’ offices are actually doing pretty well in the current economic climate; offices of physicians saw their top-line sales grow by an average of 5.7% over the last 12 months.

To celebrate Earth Day Sageworks recently released our first set of environmentally-friendly business data.  As you can see, sales of recyclable materials have increased over 14% in 2008 despite the recession, and their profits have increased markedly, up 32% from 2007. It seems that going green is gaining popularity. 

There is also data included above on how nurseries & garden centers are doing.  Earth day may have come as a welcome relief to the greenhouse and nursery industry; these businesses have seen significant decreases in both sales and profits over the last year.

The WSJ posted a blog referring to recent lay-offs in the legal profession as the “darkest day ever for big law firms“.

The numbers below show a significant decrease in revenue growth for legal services and offices of lawyers over 2008. The industry maintained strong profit margins, and may suggest that high fixed costs such as expense accounts, salaries, and other overhead costs were reigned in over the last year prior to the increase in lay-offs.

It looks like schools providing trade and technical training are growing despite the current downturn.  Their revenues have grown at an average rate of 7.8% over the last 12 months compared to 5.9% in 2006 and 2007. 

 According to the Bureau of Labor Statistics (Education Pays Survey), earnings increase substantially and unemployment decreases substantially with greater levels of education. It may be that people are looking to use trade and technical training to set themselves apart as candidates or even to change career paths in the current economic climate.

It may be a struggle for many small businesses to keep afloat during a downturn, but here is some hope. Sageworks has compiled a list of 5 financially healthy types of small businesses over the last 12 months. These industries may be worth while for job seekers to look into. They have all seen their top-line revenues increase by between 8% and 11% and their net profits increase by between 3% and over 30%.

This list was compiled looking at financial statements of businesses with less than $10 M in annual sales.