Here are 14 Recession-Proof Business Ideas That You Should Try
It is overwhelming to be in the midst of a recession. Unfortunately, recessions are something we can't control on a personal level, and as a result, you’re probably a bit worried. But, there are ways to prepare financially for a recession. You can change your career route into a recession-proof business or job.
Businesses that are recession-proof can still thrive in times of economic turmoil. This means you have more financial stability!
Consider recessionproof industries to help you if your finances are insecure or you want to start a company.
Let's first discuss the definition of a recession before we look at which industries are likely to experience a recession.
What does it mean to be in a recession?
When there is an abrupt drop in consumer spending, it's called a recession. It occurs when consumers are worried about the economy, or lose their job and income.
Officially, economists define it as a decrease in the Gross domestic product (GDP). for two consecutive quarters. In other words, GDP refers to the overall economic activity of a country. When a recession is officially declared, it’s usually already been going on for a few months.
A recession can be defined by the National Bureau of Economic Research. “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators.”
Recessions have the potential to impact many different industries. This is why it's so important to think about businesses and industries that can withstand a recession.
Are there any recession-proof companies?
Industries that do not suffer from a severe economic decline are often the best for recession-proof companies. These industries provide a vital service that is needed by everyone even when money is tight.
When the economy goes south, businesses in the staples industry are those that do well. Businesses that provide staples, such as vehicle repair, plumbing, electricity and grocery all do very well.
So, if you’re looking for recession-proof business ideas to switch into, then keep reading to find out which ones have the best chance of riding out an economic storm.
Industries that can withstand a recession
Here are some industries that can withstand recessions, and will likely support you through tough times.
- Products for babies and baby care
- Get groceries, food, and drink
- Digital Marketing
- Beauty Industry
- Funeral services
- Real estate investing
There are 14 recession-proof companies to look at
Let's look at some business ideas based on this list of recession-proof industries. You may be surprised at the top recession-proof business ideas.
But these products and services are still in high demand, even during recessions. Below are fourteen great business ideas for a weak economy.
1. Products for babies
One of the most resilient industries is baby products. After all, if you have a baby when the recession hits, that’s not going to prevent you from needing diapers and bottles.
Most parents are willing to cut down on expenses in order to save money on purchasing things for their kids. While they aren’t totally recession-proof, children's products tend to be recession-resistant.
Parents might not be able to spend hundreds of dollars on toys at Christmas during a tough year, but they will still buy presents. Babies grow fast and constantly need new clothes. And kids will always want a new pair of shoes to wear to school come September.
If you are looking at starting a business that can withstand a recession, then consider something that caters to kids and especially babies.
2. Food and beverage
Food and beverage are also recession proof industries. Because even during a recession, people need to eat. While people may cut back on splurges like eating out at restaurants, they will still splurge on core food staples.
Sales at grocery stores, candy sales, and alcohol sales all tend to increase during a recession.
Why do these recession proof businesses thrive despite money being tight? Because items like chocolate are what a buyer will consider "affordable luxuries" during tough times! So, people will still treat themselves to these items before splurging on a bigger purchase.
For instance, did you know that Snickers Bars were invented during the Great Depression? It shows you how much we crave sugar when our stress levels rise!
Grocery stores are a good sector to be in, as people tend to eat in more. That means they will spend more time on home-cooked meals. And of course, people will always need toothpaste, laundry soap, and other staples no matter the economic situation.
3. Retail consignment
When things get tough, one of the first things people cut down on are new clothes. But that doesn’t mean people want to give up their love of shopping.
Secondhand stores saw a 31% increase in sales during the last recession even as other retailers’ sales dropped. In fact, the thrift store craze stayed after the recession was long gone. Plus, it’s just as popular to buy used clothes as it is to buy new ones.
People also try to save on electronics, jewelry, musical instruments, and more by purchasing them preowned. Retail franchises and other second-hand shops such as pawn shops are good businesses to start in a bad economy.
4. Courier and delivery services
People will always need mail. This is why courier and delivery services are among the top recession-proof businesses. Courier and delivery services tend to be less vulnerable than other sectors to a recession.
Even though sales might decline, there is a need to send packages. And with more and more people turning to buying and selling secondhand online, the need for delivery is likely to rise.
Some businesses might even outsource their courier services needs. So, whether it's raining, the sun is shining, or there is a recession, there is always a need for delivery services.
Remember what I said earlier about baby items being recession-resistant? This is also true for childcare. While it can be difficult for parents to pay for things like daycare costs when budgets get tight, it’s still a necessity for many families, especially when both parents work.
Even if a parent loses a job or has to cut back on hours, they may opt to keep their kids in childcare. There are a lot of benefits for younger children to be in a safe and secure environment, especially when there is a lot of change going on that they might not understand. So childcare services are one of the industries that are recession resistant.
6. Health and senior services
Healthcare and other services for seniors are generally recession resistant. Home care is growing by billions of dollars, and health is a practical and necessary industry even in a recession. If you're looking for good businesses to start in a bad economy, the healthcare industry makes the list.
Demand is likely to continue as more and more people in the Boomer generation reach retirement. Seniors will still need help with basic needs as they get older and that’s unlikely to change when a recession hits.
Even if seniors aren’t living in a care home, they may need to hire a caregiver to help around the house or run errands for them. So basically any industries working with seniors can be great recession proof business ideas!
7. Technology and IT
If anything, quarantines and social distancing have shown that there will be even more demand for technology in the coming years.
Telecommuting and working from home are only likely to get more popular, especially with so many businesses realizing it’s possible and saving on overhead costs like rent.
The popularity of working from home is also likely to increase demand for businesses that cater to IT, as companies everywhere need to spruce up their telecommunications.
Even doctors are turning to technology as they urge patients to call in instead of going to the hospital.
Technology support for at-home services and companies is also becoming recession-proof businesses.
8. Repair services
Even in the best of times, things break down. No matter what, something will always need repair!
During a recession, people may even turn to repairing things instead of buying new things, or at least holding off as much as possible. This is why repair services make the list for good businesses to start in a bad economy.
Companies that focus on repair services for necessary items like auto mechanics, roofers, plumbers, and other home repair businesses are likely to see just as much work during a recession as when times are good.
Automotive services that fine-tune their services to their customer's needs do especially well during a recession compared to companies that are more specialized.
9. Cleaning services
No, I don’t mean home cleaning services are going to rise during a recession. But other areas that are legally required to have cleaning services tend to be recession-proof. Any workplace has to have a cleaner- a bank, office spaces, classrooms, hotels, and lobbies.
Usually, these services are outsourced to a cleaning company. Even if a company has to cut back on its employees, it will still need a cleaner.
Corporate cleaning companies are considered recession-proof businesses because they provide a steady source of income, even when the economy crashes.
10. Accounting services
Accounting services are another sector that will be in demand even when times get tough. In fact, they might be in even more demand during a recession as businesses use their services to find ways to cut down on costs.
Even during a recession, businesses will still need to pay their bills and keep track of payments and revenue. They aren’t likely to get rid of the person who knows the numbers.
If you’re good with math, then turning to financial planning or accounting or opening up a similar company could be one of the best recession proof businesses to start!
11. Freelance services
When a recession hits employers turn to freelancers as an alternative to hiring full-time employees. So, freelancing is one of the best recession proof industries to consider.
The great thing is you can diversify your services so you can create multiple streams of income. For instance, you could become a virtual assistant and be a freelance writer as well.
That way, you aren't relying on one type of job for all of your income! And you can even start freelancing with no experience.
12. Pet care business
The national pet industry made over $100 billion in sales for the first time in history in 2020! So, pet care and supplies like pet food are shown to be recession proof businesses now.
Another reassuring and heart-warming fact is that 52% of pet owners said more of their money goes towards their pets than themselves!
Vet visits, grooming sessions, and essential pet products can flourish despite facing economic uncertainty. So, consider these areas for recession proof business ideas!
13. Real estate
If you're an investor thinking about recessions, consider real estate investing or property. For example, owning a property that you rent out is still likely to do well in a recession, because people still need places to live, though it isn't a guarantee.
You may also consider REITs (Real Estate Investment Trusts) that pay dividends. It could make you an income even during uncertain times.
14. Self care and beauty
Surprisingly, self care and beauty make the list for a recession-resistant business. Although they may not realize it, necessities, Beauty salons can be found even in times of recession..
Although it is unlikely that people will spend large sums on beauty products, they may spend money on things such as a manicure and haircuts.
For a financial secure future, consider one of these businesses that are immune to recessions!
Recession-proof industries offer great opportunities in times of recession. Although it might seem more difficult, you can still find a job that is recession-proof or start a business that is recession-proof during tough times.
How to Build a profitable business You could find a way to survive in a recession. For times of crisis, it is essential to be able to manage your money and budget well. The Clever Girls Know podcast has more information about managing money.