Having recession-proof businesses is essential when starting your venture in these times.
Did you know that only about a quarter of companies survive for at least 15 years? If you want to be part of that statistic, you should look into some businesses.
That way, you can set up your business for success, even when other companies may struggle to stay afloat. Keep reading to learn what businesses to start and why recession resistance is so important.
Recession-Proof Businesses to Start
You can find ideas for plenty of businesses that do well in a recession. It may seem like most businesses will turn for the worse when there's an economic recession.
However, with a bit of research and strategic planning
, you can choose a good business idea. That way, you can succeed when the economy is thriving or during an economic crisis.
Read on for a list of recession-proof businesses.
How much does it cost to start a business
Accounting, Bookkeeping, and Financial Advising
One of the best recession-proof businesses to start has to do with finances
. You can go into accounting or bookkeeping for businesses or individuals.
People will always need help with their taxes and financial planning
. Of course, you'll need the training to pass the CPA exam to become a certified public accountant.
However, you can become a bookkeeper without much experience. All you need to do is know how to use bookkeeping software, and you can get your first few clients.
Financial advising also requires you to pass an exam. Once you do, you can help people plan their financial futures to get through a recession.
Even during an economic downturn, people may still need the help of lawyers or total law firms
. Car accidents and workplace accidents will continue to occur.
Lawsuits don't stop coming, and couples will continue to divorce. If you have legal training, you may want to start a law firm that offers various services.
Alternatively, you can focus on one area of law to position yourself as an expert. Then, you can get clients no matter what the economy is like.
If you don't have legal training, you can go to law school or look for a lawyer willing to work with you.
Healthcare is another industry that people will always need.
People won't stop getting sick just because of economic downturns, so you can still get new and returning patients.
As with accounting and financial advising, you will need training. However, starting a recession-proof business doesn't have to be a doctor.
You can start offering these essential services if you're a nurse. Then, you can hire other nurses to help take care of clients in their own homes.
Telehealth nursing is another fantastic specialty for your recession-proof business. People may want to do more home visits to spend more time working and save money on gas.
Starting a courier service is another excellent recession-proof choice for your next business. Even during a recession, people may still want to order things online.
They might order things for themselves or give them to family and friends as gifts. Courier services also don't stop when there's bad weather, so you can keep your business going.
Companies like Amazon have made it easier to start a courier business. You can become a delivery partner and run your own team while delivering Amazon orders.
If you prefer to work from home, consider going into telecommunications. Some recession-proof business ideas in this space include cell service and internet service.
While you might not be able to do that, you can find other ways to help people work online. An easy option is to become a website hosting reseller and work with small business owners here.
You'll get to help others make money online while you do the same. That can be great during a recession when people might want to minimize their spending on gas and transportation.
Unfortunately, it can be expensive to start some telecommunications businesses. You may need permits, and many companies must pay the FCC to get going.
Technology issues will probably increase people working from home or spending more time at home, so you can offer IT support to help individuals and small businesses stay online.
Specific business ideas include offering cloud storage services or providing tech help over the phone. You can choose a business model that meets your needs and helps you live the life you want to live.
IT businesses are also easy to scale, so you can start small. As you get more customers, you can hire people to help you handle the workload.
You also get to work from anywhere, so you don't need to pay for office space. If You can all work remotely, if it's just you or a small team, you can all work remotely.
Another recession-resistant business to start is something involving home services. Homeowners will always need anything from plumbing to HVAC to electrical work.
You can also start a home repair business o specialize in interior painting. People will always want to be comfortable where they live, so you should have an influx of work, even during an economic downturn.
Home services are also great because recessions make for a buyer's market in real estate. So buyers may choose to do some renovations after they move into their new place.
An increase in buying properties also paves the way for realtors to get more clients.
A cleaning company may also maintain demand through an economic recession. You can focus on corporate or personal cleaning services
or do both to expand your business.
Corporations may continue to need cleaning services, especially after the COVID-19 pandemic. Even without a health crisis, people need and want to work, so they can't get sick.
Maintaining clean offices and homes can help people stay healthy. People may cut back on the frequency of cleaning, but they might not get rid of the service entirely.
Another recession-proof business has to do with children's goods. Kids will always need clothing, milk, diapers, and other essentials.
Parents will typically be willing to pay for these items, even when they need to cut back elsewhere. Milk and diapers are great because kids go through them quickly.
Also, infant and toddler clothing companies can fare well during a recession. Young children will grow out of their clothes every few months and need new items.
You can also sell children's toys, but parents may cut back on buying those. It's better to focus on the necessities to get consistent sales.
Another family-focused business idea is to teach or tutor online. You can tutor kids in almost any subject, so you can focus on your area of expertise.
Kids don't stop needing help with their homework, so you can maintain a client base during a recession. Online tutoring also offers other benefits to families.
Parents don't have to spend time driving their kids to tutor, so the parents can work from home. They also don't have to spend money on gas, and you don't have to do that either.
Babysitting and Child Care
Even if their children don't need tutoring, parents may still be willing to pay for babysitting or daycare. During a recession, parents may be working more than usual to try and earn more money.
If both parents are working, they might need to pay for babysitting or a group child care setting. Either way, you can start a business taking care of children.
Of course, demand can go down during the school year. However, infants and toddlers will still need care, so you can focus on that age gap for a recession-proof venture.
As with children, many people think of their pets as part of the family. Pet owners will always need to take their animals to the vet for annual checkups and vaccines.
Of course, people will continue to have to buy pet food and treats for their furry friends. Not everyone takes their pet to a professional groomer, but a lot of people do, so that's another great business idea.
Now, you'll need to attend vet school to start your own veterinary practice. However, you don't need special training or qualifications to be a groomer, and you can partner with a manufacturer if you want to make pet food.
Car Maintenance and Repairs
Another one of the best recession-proof business ideas is to work with cars. People will always need to take their vehicle in for maintenance, such as oil changes and tire rotations.
It's also hard to predict when a car will need other repairs, but it can happen. If you open an auto shop, you may be able to continue to get clients as the economy fluctuates up and down.
You can become a car mechanic after completing an apprenticeship under a current mechanic. Then, you'll be able to open a business and hire other mechanics, or you can simply hire people immediately and act as the manager.
Food and Beverages
Some of the best recession-proof businesses fall into the food and beverage industry. One option is opening a grocery store chain since people will always need to shop for food.
You can also offer food delivery services so people don't have to leave the house. Restaurants may perform well, especially if you choose to allow carryout.
If you want to start something with less risk, you may look into setting up a vending machine business. You can hire people to stock the machines for you, and place them in high-traffic areas, and you don't have to manage them yourself.
Freelance or Gig Work
When looking at different recession-proof businesses, consider doing freelance work. You can work for yourself in almost any industry and be able to find clients.
Some industries that perform well include digital marketing, finance, and healthcare. For example, you might offer social media management services to healthcare companies.
Or you might become a virtual assistant for accountants. Then, you can take advantage of those industries without needing special training.
Plus, you get to take on as many clients as you want. That can help protect your income in case you lose one client because of a recession.
Another reason freelancing and gig work or great is that companies may lay off their full-time workers. However, they might increase temporary hires to get through a recession.
You can take advantage of that shift by starting a staffing agency where you connect businesses and workers. Companies may be willing to pay to get help finding good job candidates.
Similarly, individuals might be more willing to take on temp work if they can't find a traditional job. You can help them find the right company to work for.
You might also want to sell stuff online as your recession-proof business idea. Websites and apps such as eBay and Poshmark let you resell used clothing and other items.
Reselling allows you to make a profit on things you no longer use.
You can also check your local thrift stores to find good deals to resell online at a higher price.
Many buyers want to save money but still treat themselves to new clothes or goods. When you resell, you probably won't charge the original price, but you can still make a bit of extra cash whenever you make a sale.
You can also help others resell their clothes by opening a retail consignment shop. People can bring their used items to your store, and you can inspect the quality.
Then, you'll offer the person a cash payment or store credit for the stuff they brought in. You can turn around and sell the items for a bit of a profit.
And you don't have to just sell clothes in your consignment store. You may also sell used books, electronics, or toys as long as the items are in good condition.
Top Websites To Sell Stuff Online
When looking at recession-proof industries, it helps to understand the industries that do best in a recession. Here are some industries to consider when deciding on the right business:
- Financial services
- Basic transportation
- Consumer staples
Everyone needs healthcare, food, and transportation. If you can work in an industry that meets people's basic needs, your business may survive a recession and even thrive during that period.
Products in Demand During a Recession
Some products also stay in demand during a recession, even if they aren't in the previous industries. You can use these products to generate ideas of what to sell in your business:
- Nutrition and meal replacements
- Hair, skincare, and cosmetics
- Pet care
- Baby products
- Cleaning products
You can do a lot with some of these products that are always in demand. For example, you could sell any type of food item, from snacks to pre-made meals.
Are There Unprofitable Businesses in a Recession?
Some businesses may be unprofitable during a recession. While many food businesses, such as grocery stores, thrive, restaurants may not be as profitable.
During a recession, people tend to eat out less than usual. That means restaurants won't sell as much food and won't make a huge profit if any.
The hospitality industry can also suffer during a recession. Of course, hotels and airlines may still work with business travelers, but leisure travel usually slows down.
Sports and performing arts can also lose money in an economic downturn. People may prefer to watch sports from home rather than pay for tickets.
They might also switch to watching media on streaming services. Live performances and movie ticket sales might not be as profitable as usual.
What Is a Recession-Proof Business?
Recession-proof businesses are companies that survive or thrive during economic crises. More specifically, it can refer to companies that do better in recessions than normal or maintain business.
Another definition is that recession-proof businesses meet customers' inelastic or unchanging needs. A fantastic example is a grocery store since people always need food.
You can also sell other things that people will continue to use, from toothbrushes to paper towels or toilet paper. Any consumable product like this can thrive in a recession.
In other cases, a business might provide critical services that people can't do themselves. For example, people can cook for themselves but still need to visit a doctor for medical care.
Advantages of a Recession
As odd as it may seem, a recession has a few advantages. Understanding these benefits can help you make the most of the downturn when starting or growing your business.
Here are a few specifics you should know:
- Slow inflation
- Balance rising costs due to inflation
- Lead to future economic growth
- Reminds us of the importance of saving
- Helps increase efficiency in the workplace
While a recession can be devastating, it's not all bad. If you start or run the right type of business, you could thrive during periods of financial stress.
Which Recession-Proof Businesses Will You Consider?
Recession-proof businesses can help provide you with some stability as the economy changes. Luckily, you can find good business ideas in various industries, though some are more secure than others.
Be sure to consider your skills and interests. Then, you can compare recession-proof business ideas to decide the right choice for you.
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Recession-Proof Business FAQs
How to Recession-Proof Your Business?
If you're starting a new business, choosing the right industry is the best way to recession-proof it. You can sell things that people won't stop buying so that you can maintain a consistent level of sales.
For current businesses, consider if you can launch an online component. If you have a restaurant, offer online ordering and carryout or delivery.
You can also switch your focus to businesses as your primary clients. This is an excellent choice for hotels since people may still travel for work even if not for vacation.
Does a Depression Always Follow a Recession?
Depression doesn't always follow a recession. Recessions occur when the real gross domestic product (GDP) declines back-to-back for at least two quarters.
Other things that can happen include an increase in unemployment and a decrease in consumer spending.
Depressions generally last for multiple years, while a recession might get back to normal within a year. At least in the US, there's only been one depression, but there have been many more recessions.
How to Survive a Recession?
One of the best ways to survive a recession is to start a recession-proof business. However, consider investing in recession-resistant stocks consider investing in recession-resistant stocks if you're still getting your business.
You can invest in stocks for companies in recession-resistant industries. For example, you may buy stock in a food company or grocery store.
A recession is also a great time to bulk up your savings and cut back on your spending. If you have debt, work to pay that off before interest rates increase since interest rates can help slow or end a recession.
How to Make Money During a Crisis?
During a recession, it can feel as if your money doesn't go very far. Fortunately, you can find ways to make money during an economic downturn, such as by starting a business.
You can also start a small side hustle in an in-demand industry. Doing food delivery or grocery delivery can be an excellent, flexible way to make money.
Another option is to look for the best recession-proof stocks. That way, you can invest your money in companies that may grow in value during the downturn.