5. Real Estate and Property Management
Recessions can actually be good for the real estate and property management sector, as it is often the best time to invest in property.
As real estate includes any property consisting of land and the buildings on it, ultimately it is an industry with an essential and very valuable product.
The MSCI’s statistics for 2019/20 showed the US real estate industry to be worth $9.6 trillion, so there is serious money to be made selling a home or business premises even during a recession.
Property Stagers: Professional property stagers help a seller make a quick sale and maximize their property price. This is why it is such a valuable job that will always be in demand.
Real Estate Agencies: The knowledge, network and experience required in the job of selling properties is not something ordinary folks have, so real estate agencies are in a good position to continue doing well during a recession.
A Rental Agent Business: Recessions can be a good time for the wealthy to invest in properties, but the not so wealthy still somewhere to live. Rental agents should always be able to find a sizable amount of tenants needing a home and businesses needing office space to cater to.
6. Baby Products Business
While many people make adjustments to their spending during a recession, spending on their children is not where they tend make the sacrifices. Historically, products for babies continue to sell well during economic downturns as families look to reduce spending in other areas.
Entrepreneurs moving into the baby products business could be very successful, as the industry is projected to massively increase in value over the next few years.
The baby care products market was estimated to be worth over $67 billion in 2020, with that set to rise to well over $88 billion by 2026.
7. Child Care
Similarly to the baby products business, the child care market has also grown in size and is set to continue. In 2019 the US child care industry was valued at $54.3 billion, and is projected to rise at a compound annual growth rate of 3.9% up to 2027.
As more and more mothers are empowered to continue their careers after child birth, the child care market will only increase in value.
8. Financial and Accounting Services
Accountancy and other financial information services will always be in demand during a recession. This is especially true nowadays as more and more complex laws and regulations are introduced each year.
It can be a very lucrative industry too, with the revenue of the US accounting industry forecast to have generated over $110 billion dollars during 2020 alone.
This sector endures because it is crucial for businesses to have their finances in order regardless of the state of the economy, so there are numerous financial and accounting services which continue to do well during hard times.
Tax Prep: The consequences of not declaring the right tax information is a serious matter, so businesses and wealthy individuals cannot afford to take risks with their tax prep.
Accounting Services: Astute business owners hire professional accounting services even during a recession as they can save the business money by ensuring everything is in order.
Financial Planning: Many wealthy individuals and organizations may seem content during a recession, but their fortunes can quickly diminish without proper financial planning using all available information.
Bookkeeping: Few business owners and entrepreneurs have sufficient bookkeeping skills and spare time to record their financial information correctly. It can be an exhaustingly time-consuming task for those lacking in bookkeeping experience, so hiring a specialist bookkeeper will continue to be a popular option.
9. Freelancing including Virtual Assistant, Writer and More
Freelancing has the potential to be one of the most recession-proof businesses in the world, even compared directly to many of the others on this list. Companies can save a lot of money by outsourcing certain tasks and activities to freelancers. This lets them pay for those tasks individually as and when they are needed rather than hiring a permanent employee.
Being a writer might conjure images of people writing editorials for the New York Times or the table of contents in a novel, but it is much more to do with creating content for all the business websites that need regular new content to stay relevant and improve their search engine ranking. Content creation, news articles, and other kinds of information content require a skilled writer.
Another popular option is that of a freelance virtual assistant who provides a variety of administrative services to different businesses and organizations from their own home.
10. Cleaning Companies
The state of the economy has absolutely no bearing on the many rules and regulations that commercial and public spaces are required to adhere to for hygiene and safety reasons.
For this reason alone, a cleaning service is recession proof and will continue to do good business during an economic downturn.
The list of organizations that require regular cleaning services include any and all medical and care facilities, stores and shopping centers, beauty salons and spas, restaurants and other hospitality venues, plus all recreational facilities and public spaces where people gather.
11. Tattoo Parlors
An interesting twist when compiling a list of recession proof businesses is the inclusion of the tattoo parlor.
It doesn’t seem to make sense on the face of it as tattoos must surely be considered a luxury item, but the fact remains that tattoo parlors continue to do well even during a recession.
It is probably because of the relative inexpensiveness of a tattoo compared to how long it lasts, plus getting ‘inked’ has been growing in popularity as each generation of people emerges.
12. Businesses Providing Retail Therapy
There are many items which are consumer staples such as toiletries whose sales remain steady during a recession. There are also several other types of retail which also does well even when the condition of the economy suggests people should be buying less.
Here are three more recession proof business ideas in the retail sector.
Luxury Retail: The consumers of this retail market are already wealthy and financially secure to begin with and will usually only be marginally affected by a recession. Businesses serving these customers can expect their sales to remain fairly consistent.
Discount Stores: At the other end of the financial spectrum are those people who are massively affected by recessions and need to make a lot of changes to their buying habits. A recession will typically see an influx of new customers to discount stores.
Pawn Shops: People who sell items to pawn shops often see them as an excellent short-term loan option, while buyers of pawn shop goods are attracted to the cheaper goods. Both of these types of customers ensures pawn shops do very well during recessions.
13. Courier Services
Courier services are a lot less vulnerable to economic slumps as there will always be a need to send packages locally, nationally and internationally.
A recession can even see courier services acquire new customers as businesses who usually deliver their own goods cut back on costs by outsourcing to one courier or another.
14. Beauty Business
The enduring success of the beauty industry as a recession proof business is actually far less to do with vanity than might be expected.
The ‘Lipstick Effect’ is a phenomenon where consumers continue to spend their money on small indulgences during recessions to compensate for the larger sacrifices they make. The name comes from the fact that it is especially applicable to the beauty industry.
Here are a couple of beauty businesses which continue to do well during a recession.
Nails: Manicures are inexpensive luxuries and their popularity doesn’t diminish during periods of financial difficulty.
Hair salons: Hairdressing has long been recognized as one of the very last expenditures people are willing to sacrifice to save money.
15. Technology Support
Computer and information technology jobs are expected to boom over the next few years.
The advancement of Big Data, cloud computing and security for the likes of credit cards means that technology support is a job with high recession resistance.
16. Funeral Services
The only certainties in life are… well, you know how it goes.
Recession or not, the need for a dignified last resting place after we reach the inevitable destination of all who journey through life will always be there.
Whether it is burial or cremation, the job of a funeral service will always be in demand regardless of the economy.
17. Staffing Agencies
There continues to be a lot to do for staffing agencies even when many companies are cutting costs and laying off staff.
Those cuts will be coming from industries heavily affected by a recession, but as you can see from this list, there are a lot of industries who thrive in such times and will continue to need more staff.
18. Education Businesses
Education and training courses are always in demand so a business providing such can continue to be successful during a recession.
A lot of people will be losing jobs and trying to retrain in another area which immediately boosts the amount of consumers available.
By providing education and training courses, either on site or at home, these kinds of businesses can actually thrive off a recession while simultaneously helping the country get back on its economic feet.
19. Digital Marketing
No matter what the economy is doing, digital marketing such as SEO, SEM, social media campaigns and email marketing will always be one of the most cost-effective ways reach new customers.
A recession will only magnify the low investment needed to generate more leads and conversions via a sound SEO strategy.
Digital marketing also provides a wealth of other benefits besides bringing in more customers. It is very flexible which allows a business to adapt to changing circumstances.
An Overview of the Best Recession Proof Businesses
|Reasons for Recession-Proof
|Food and Beverage Business
|Essential need for food and drinks
|Rising demand and constant advancement of science and medicine
|Pet Care Business
|Increasing popularity and rising pet ownership
|Renovation and Repair Industry including Plumber, Utility Services, and Auto Repair Services
|Essential services for home and vehicle maintenance
|Real Estate and Property Management
|Recession is a good time to invest in property
|Baby Products Business
|Spending on children remains steady during recessions
|Increasing demand as more mothers continue careers
|Financial and Accounting Services
|Crucial for businesses regardless of economic state
|Freelancing including Virtual Assistant, Writer and More
|Cost-effective outsourcing during economic downturns
|Hygiene and safety regulations remain constant
|Relative inexpensiveness and growing popularity
|Businesses Providing Retail Therapy
|Luxury retail, discount stores, and pawn shops
|Always a need for package delivery
|Lipstick Effect” and small indulgences during recessions
|Job growth in computer and information technology
|Demand for dignified last resting place
|Industries that thrive during recessions need more staff
|Increased demand for education and training courses
|Cost-effective and flexible marketing strategies
Is a recession a good time to start a business?
A recession can indeed be an excellent time to start a business as the costs can be much lower than starting one during a boom period.
Established suppliers, manufacturers and vendors that you may need to work with to start your business will be more likely to negotiate on their rates during a recession.
If you can get a business idea like those listed above up and running during an economic downturn, then you will have a great chance of achieving even more success once the economy recovers. Getting started during a recession will also set your business up well for the long haul.
Also importantly, during a recession, there’s often less competition, allowing your business to stand out more easily. This period can also be a time of innovation, as challenging times often spur creativity and unique solutions, which can be the lifeblood of new businesses.
What are the most recession proof businesses for Americans?
Healthcare will always be a recession proof industry as we simply cannot do without it. There are several different paths you can take, from providing care for seniors to supplying pharmaceuticals. If you can get a healthcare business up and running, then you will always have customers.
A cleaning business will also always have customers as there are so many laws and regulations that require organizations and public spaces to be kept clean for health and safety reasons. This goes for all kinds of business premises and areas open to the public so that this business idea can be very lucrative even during a recession.
With so many businesses operating online, the importance of digital marketing is only going to increase. Starting this kind of business opens up many opportunities that will still be there during a recession.
Additionally, the flexibility and adaptability of digital marketing make it resilient to economic downturns, as businesses seek cost-effective ways to reach and engage customers in challenging times. This adaptability allows digital marketing businesses to pivot strategies quickly, meeting the evolving needs of clients even when the economic landscape shifts dramatically.
What products sell well during a recession?
During a recession, consumer spending habits tend to shift towards essential items and affordable luxuries. Here’s a breakdown of the types of products that typically see sustained or increased demand:
- Staple Items:
- Food and Beverages: Essential food items and basic beverages continue to be in demand as they are daily necessities.
- Toiletries: Products like soap, toothpaste, and toilet paper are indispensable, maintaining steady sales even during economic downturns.
- Gas, Electricity, and Water: These are fundamental utilities that households and businesses cannot function without, making them recession-resistant.
- Telecommunication Services: With the increasing reliance on digital communication, services like internet and mobile connectivity also fall into this essential category.
- Affordable Luxuries:
- Premium Cosmetics: Consumers often still seek small indulgences during tough economic times. Affordable luxury items like premium cosmetics can experience a surge as people look for ways to treat themselves on a smaller budget.
- Entertainment Subscriptions: Services like streaming platforms may see increased usage as people spend more time at home and look for cost-effective entertainment.
- Economical Alternatives:
- Discounted or Value Products: Products that offer value for money, including generic or store brands, often see an uptick as consumers become more price-conscious.
- DIY and Home Cooking Supplies: With more people looking to save money by doing things themselves, products related to home repair, gardening, and cooking can become more popular.
In essence, during recessions, products and services that cater to basic needs, offer value for money, or provide affordable indulgence tend to maintain stability or even grow in demand. This shift in consumer behavior reflects the focus on essential living and the search for economic ways to maintain lifestyle quality.
How do you create a recession proof business?
Here are five steps you can take to make your company recession proof for job security.
- Choose the right business:
- Needs vs. Wants: Begin by focusing on businesses that cater to people’s fundamental needs rather than their wants. Essential services or products, such as food, healthcare, or utilities, are often less impacted during economic downturns.
- Recession-resistant sectors: Certain industries tend to be more resilient during economic slumps. Examples include repair services (people tend to fix things instead of buying new), discount stores, and education (many seek additional skills or certifications during unemployment).
- Be adaptable:
- Stay informed: Keep an eye on market trends, changes in consumer behavior, and any shifts in the economic landscape.
- Versatility in offerings: Diversify your products or services. Don’t rely on a single income stream. This spreads risk and allows you to cater to varying customer needs.
- Lean operations: Adopt a lean business model. Minimize waste in your processes, be it in production, services, or management, to allow for more flexibility and rapid adjustments.
- Negotiate with vendors:
- Build strong relationships: Before negotiation becomes necessary, build trustworthy relationships with your suppliers. Being a loyal and reliable partner can pay off during hard times.
- Seek bulk deals or long-term contracts: By committing to longer-term relationships or larger purchases, you might be able to secure more favorable terms or discounts.
- Explore alternative suppliers: Don’t be reliant on a single vendor. Having alternatives can provide negotiation leverage and ensure continuity if one vendor faces difficulties.
- Cash flow management:
- Budget wisely: Regularly review and adjust your budgets. Prioritize essential expenditures and cut back on non-essential costs.
- Emergency funds: Create a reserve of funds that can cover operational costs for several months. This cushion can be invaluable when revenues dip.
- Monitor receivables: Ensure timely collection of payments. Consider offering discounts for early payments or imposing penalties for late ones.
- Listen to your customers:
- Engage regularly: Use surveys, feedback forms, or direct communication to understand their evolving needs and concerns.
- Adapt offerings: If customers are seeking more cost-effective solutions, consider introducing budget-friendly options or payment plans.
- Strengthen loyalty: Offer loyalty programs or incentives to retain your customer base. Happy, loyal customers can provide stable revenue even in unstable times.
Which type of business is not recession proof?
There are some business ideas which are very prone to performing badly during a recession. These at risk business ideas include:
Mid-market brands often occupy a challenging position in the market landscape.
While they might offer a better quality or unique selling proposition compared to budget options, they still face fierce competition from these cheaper alternatives. This is particularly evident during economic downturns when consumers become highly price-sensitive.
Many such brands operate with significant debt, owing to expansion strategies or capital-intensive operations, which makes them vulnerable during economic slumps.
Moreover, their market positioning often restricts them from rapidly diversifying into other segments or niches, limiting their adaptability during tough times.
Startups that cater to niche markets or offer specialized services/products can experience soaring success during economic booms. Their unique propositions often attract a dedicated customer base, and they might enjoy limited competition.
However, the flip side is their vulnerability during economic recessions. If their core product or service isn’t essential or inherently recession-resistant, these startups can face severe challenges. Their niche focus might hinder quick pivoting, and they may lack the financial reserves of more established businesses to weather prolonged downturns.
The food industry is diverse, with different segments reacting differently to economic cycles. Fast food joints, delivery services, and budget snack brands often see a surge in demand during recessions.
People look for cost-effective, convenient options, and these businesses cater perfectly to that demand. In contrast, mid-range restaurants, which strike a balance between quality and affordability, can face challenges. Their primary customer base, often consisting of middle-income earners, might cut back on dining out to save money, instead choosing to prepare meals at home.
This shift in consumer behavior can lead to decreased footfalls and revenues, posing a significant threat to the survival of these restaurants, especially those without a strong takeout or delivery infrastructure.
In essence, while every business type has its strengths, vulnerabilities become glaringly evident during economic downturns. Businesses must recognize these vulnerabilities and strategize proactively to minimize risks and ensure sustainability.