There’s a lot of uncertainty about the economy right now. Businesses are still feeling the lingering effects of the COVID pandemic, and the stock market still seems to teeter-totter on a daily basis. Some economists are warning that a recession is imminent. And only time will tell if they’re right.
If you find yourself wondering how you can navigate this economic uncertainty, you’re not alone. Starting a business could be a way to help shore up your finances, but it’s important to pick the right one. Which begs the question: what are the best recession-proof industries? After all, if you’re going to start a business during a pending recession, you want to pick one that will last.
While no business is completely recession-proof, some weather hard economic times better than others. In this guide, we’ll explain what makes a business recession-proof and share some of our favorite recession-proof business ideas.
Recession-proof businesses are the industries that remain (mostly) unscathed during an economic crisis. Ideally, recession-proof businesses provide essential services or products that people need.
Surprisingly, some entertainment businesses can survive recessions. Even when customers are looking to save money, they still need stress relief to get their minds off the challenges of a recession, and entertainment helps.
Take Disney, for example. The company was founded just before the Great Depression. In a time of deep despondency, the Disney brothers knew America needed to be cheered up once more. That opportunity led them to grow their business — successfully surpassing the challenges of the recession.
But before you can build your own recession-resistant business, you need an idea. So let’s talk through nine of the best recession-proof business ideas with pretty good odds of surviving a recession.
Unsurprisingly, the food and beverage industry tends to thrive (or at least hold steady) in an economic downturn. Profits earned in grocery stores, food chains, and convenience stores remain fairly steady during a recession.
Interestingly, the eating habits of consumers are triggered and increased during tough economic times. People tend to crave and eat more when stressed out — particularly with sweets and alcohol. Snickers and Mars chocolate bars came into existence during the Great Depression. McDonald’s opened over 600 locations during the 2008 recession. And those are just a couple examples.
Even those who want to eat healthy might find themselves too busy to cook if they pick up extra hours or a second job. They’ll likely turn to a local restaurant, fast food chain, or even meal prep services to get food quickly.
No crisis of any kind will probably stop people from eating and drinking — not even an apocalypse. During economic downturns, consumers are inclined to buy sale and discounted items or look into cheaper alternatives to cut back expenses. The reality, however, is that people can only cut food spending by so much.
A food business can be a great recession-proof business idea, especially if the business offers great meals at affordable prices. There will always be demand for food.
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How tempting it must be to skip those taxes! However, recession or no recession, taxes must be paid on time. Some consumers might try to save money by doing their own taxes. While that might seem like a quick win, it’s often risky. And many taxpayers actually get a bigger refund (or at least a lower tax bill) by enlisting an accountant’s help.
Individual taxpayers aren’t the only ones who could use an accountant’s help during a recession. Many businesses need help with their small business accounting since their cash flow is tight. With an accountant’s help, they can keep their books balanced and have a clear picture of their finances when it matters most.
Accounting and bookkeeping services can be a lifesaver for small businesses and families alike. These potential customers need help to make the most of the money they have, especially when prices are rising and employment’s uncertain. A good accountant can provide support, giving businesses and individuals a clear look at their expenses and advice on how to manage their available resources, helping alleviate financial struggles.
Financial planning is another one of those support services that can do surprisingly well during a recession. Money becomes a high-stakes venture during an economic recession, and financial advisors can help families navigate the present while preparing for the future.
Granted, not everyone will want to save money for retirement during tough times. But with an economic downfall, it’s only natural for us to be concerned and defensive with our resources. Much like business owners, investors and wealthy individuals want to secure their wealth and confirm that they’re well taken care of now and in the future. A financial planning business can capitalize on that desire for security. And with good service during a recession, financial advisors may find themselves with lifetime clients even in good financial times.
IT is an integral part of our society now. Behind every good e-commerce website is a skilled IT pro. Even the kiosks at Walmart are developed and maintained by IT professionals. And day after day, businesses rely on IT’s help to solve problems like server crashes, malfunctioning client portals, and more.
Information technologies is one of those essential services that individuals and businesses rely on during both good and bad economic conditions. Look at it this way: healthcare companies need their charting systems to stay up and running. Even dollar stores need their payment portals to operate seamlessly. Meanwhile, individual professionals who are looking for extra jobs so they can have multiple revenue streams need their internet connection to find positions to apply for. Remote workers can’t have a steady cash flow unless their computer works properly.
If you want to make an IT business work during a recession, it’s essential to offer reliable services at affordable prices. You could even offer extras like phone screen repair services and computer refurbishment to help those who don’t want to buy new smart devices.
Alongside information technology, the telecom industry is here to stay, no matter what the economy is like. If anything, the repercussions of the COVID-19 crisis only proved the relevance of this industry today.
People need their phones to communicate online. Whether they’re calling a loved one on the way home from work, connecting with family living abroad, or just handling their daily responsibilities, they need a reliable telecommunications provider to keep them connected to the global economy.
Texting, calling, and data is another essential service that most people can’t live without. Even if people downgrade their service packages or get cheaper devices, they will still need reliable phone service. Businesses will also rely on their phones to call potential clients, follow up on delinquent bills, and more. Even universities and schools depend on services like videoconferencing on phones to facilitate remote learning.
Telecommunications already proved their efficacy even before the pandemic began, and odds are, they’ll continue to do so.
Healthcare services definitely qualify as essential services. Every now and then, someone will get sick. Even when finances are tight, if people are unwell, they’ll seek a medical professional. And they’ll pay whatever it takes. The healthcare industry is said to be fairly recession-proof because of its price inelasticity; they don’t have to drop their prices when a recession hits because people will need their services anyway.
Clinical institutions and medical careers are one of the few sectors that remain unaffected during a recession. It’s unlikely for this business to cut back in bad economic times.
There’s no avoiding going to the doctor, so there will always be consumer demand for businesses in the healthcare sector.
By way of illustration, the Occupational Employment Statistics (OES) survey looked at nursing employment in the United States during the Great Recession. Focusing on the recessionary years 2007 to 2010, the survey concluded that while there was a national employment decline of about 7,257,090 jobs lost, nursing employment moved differently, with an increase of 7.6% from the same period. By extension, the businesses that hired those nurses did well, too.
Maintenance and repair services will likely stay unharmed and thrive during recessions. Even in an economic downturn, when people are tempted to take the do-it-yourself approach, there are some repairs that customers just can’t handle on their own. Even with immaculate care, cars go through wear and tear. Homes and rental properties get leaky pipes, clogged toilets, broken dishwashers, and failing air conditioning.
This is where a repair service business comes in handy. A good handyman or car repair tech can actually help save consumers money in the long run by fixing it correctly the first time.
Auto repair and utilities are some of the more recession-proof businesses because things reliably break. There’s always a high demand for repairs. It’s just part of life; broken refrigerators don’t care about the state of the economic climate. Cars don’t, either.
Plus, in an economic downturn, people are more likely to repair items that they might otherwise replace completely. For example, if someone’s old hand-me-down washer stopped working, it might be easier to just buy a new one (and they would if money wasn’t tight). But it could be cheaper just to repair it — which means they’ll call your repair business for the fix.
If you are trying to weather an economic slowdown in the repair industry, offer affordable packages while continuing to serve customers.
Parents make sacrifices for their kids every day, and tough times are no exception. They’re going to provide for their kids regardless of the economic situation. If their kid needs diapers, new shoes, or school supplies, they’re going to buy them.
Paying for their kids’ needs is one thing, but parents will even sacrifice to buy some of their kids’ “wants.” If toys, books, and games will help their kids feel better, parents will make it happen. Emotional needs are real, too.
Childcare services also tend to stay steady during a recession. As parents take on extra hours or a second job, they need someone to look after their kids. Childcare is a non-negotiable for many professionals, even if their kids are school-age.
As we’ve mentioned, parents will always spend on their kids to meet their needs and wants. But it’s not just an emotional thing. There are practical reasons for it, too.
Babies need entirely new wardrobes every few months (to say nothing of the diapers they go through). Rambunctious kids rip holes in their clothes and lose their shoes. There’s no avoiding the fact that kids grow up fast and need new items regularly.
As a result, businesses that fulfill these needs will face a steady demand, even during financial challenges. Whether you’re selling diapers, kids’ books, or a safe after-school program, your kid-friendly business can help families weather financial storms together.
Rain, shine, or recession — packages are delivered! Freight and logistics services are an essential part of today’s economy, and that’s true in good times and bad. Think of it: odds are, you see USPS, UPS, FedEx, and Amazon on your neighborhood streets at least once a day.
During the COVID era, courier and delivery services proved themselves as one of the few “pandemic-proof businesses.” Even as people were sequestered in their homes, delivery services took to the streets, delivering essentials like medicine, toilet paper, and ways to pass the time. And there’s a very good chance that courier services will stay recession-proof in future downturns, too.
Even if a virus isn’t the reason for an impending recession, delivery services will still be a reliable part of the economy. Small business owners will need supplies delivered to their office. Pet owners will need someone to deliver their furry friends’ food and medicine. Teachers will need classroom supplies delivered. Families may even send hand-me-down clothes to their loved ones to help them save money. Even when facing economic troubles, people will rely on their local courier services out of convenience (or simply because they can’t get those items at their local grocery store).
Delivery services face consistent demand because they piggyback off the demand that another business model generates. The rising demand from e-commerce has also made it easier than ever for customers to buy items from all over the world — and they need a courier service to help deliver them.
And as an added plus, delivery services don’t have to be industry giants like UPS or FedEx. Even small couriers can be successful with the right strategy. Delivery companies have the unique ability to work with both the business-to-consumer (B2C) and business-to-business (B2B) approaches. For example, Amazon works with a lot of local delivery service partners, which are third-party businesses that Amazon hires for local deliveries (talk about job security). That same delivery business could also offer its services to private customers for personal deliveries.
This is what distinguishes courier services from other businesses. Freight and logistics companies are well-positioned and undeterred in the international market today.
An economic downturn is unavoidable, but its unfavorable effects on businesses can be mitigated. If you’re encountering a devastating drop in sales, your business needs to be strategic — both in finances and marketing.
The important thing to remember during an economic downturn is not to panic but instead plan effectively on how to bounce back. Marketing your business affordably might make it stronger than ever. Actively strategizing smart decisions (such as low-cost ways to market your business) to support your business might be your easiest ticket out of an unforeseen event.
With that said, businesses need to refocus on their core competencies now more than ever. What are the bestseller products you have? What services are consistently in demand? Concentrate now on your business’s core products or services because that’s where you can generate more revenue.
Enhance the marketing tactics of your recession-proof business further today with digital marketing, and enjoy the benefits of potentially reaching wider prospective clients. Some of the best online digital marketing certificate programs are readily available for you.
Alongside strengthening your business, it’s equally imperative to deliver quality customer service. Prioritizing your customers is about providing what the customers want and when they want it. If you can deliver on your company promises over and over, you’ll probably grow your customer base and retain your current ones, too.
Make your customers feel seen. Interact with them in meaningful ways. If you’re a brick-and-mortar location, this might mean learning their names and having a quick but personal conversation with them whenever they visit. If you serve customers online, maybe show them you care by sending a birthday discount, or include a hand-written note in their order along with a free sample of a different product. Even these small touches can build brand loyalty, which will ultimately help you withstand an economic slump.
While recessions often spell troubled times for most of us, they aren’t permanent. Certainly, not all businesses are instantly doomed when recession strikes — especially if we support and protect them with all our might.
If you want to succeed, it’s important to adapt quickly to the economy’s structural changes. Every recession is different — in length, severity, and cause — but one thing remains constant: the businesses that respond to consumer demands will better cope during a decline. And they might just come back stronger for it.
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
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