Fortunately, you can find ways to make money during an economic downturn, such as by starting a business. 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.
Here are three more recession proof business ideas in the retail sector. 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. Franchising offers a proven business model with established brand recognition, training, and ongoing support from the franchisor. Additionally, as part of a larger network, you can benefit from collective buying power, marketing resources, and shared knowledge.
Childcare Business
Without some radical shift in the culture, there will always be a need for childcare, and thus starting a business in childcare during a bad economy could be a smart business idea. Providing a sanitized, healthy work environment has become much more important, and larger companies who aren’t impacted by the recession may be more willing to pay a cleaning company. Smaller businesses who are striving to provide a healthy work environment to their customers and employees could be clients as well. This is a flexible business in that it can be done online and in one’s local area relatively easily, with little to no overhead costs. You will need some experience in fixing broken devices, and getting things “certified refurbished” will take some learning. Still, it’s a good business idea for an entrepreneur looking to start a business during a bad economy.
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- Another one of the best recession-proof business ideas is to work with cars.
- Many business owners find one of their largest business expenses is the cost of labor.
- You can tutor kids in almost any subject, so you can focus on your area of expertise.
Whether you’re now working from your dining room or built-in home office, you know that home is where the heart, family — and now work — are. Start planning to get your business recession-ready with the top 5 Tried and True Strategies for a Recession Proof Business. More people than ever are working from home, which means companies are increasingly reliant on technology. Plumbers and electricians provide valuable work that continues through almost any type of downturn.
Online teaching
A recession-proof business or business model continues to perform well during times of economic duress, when other business types may be forced to cut costs, reduce their workforces or even shut down. These countercyclical businesses either provide necessities that consumers require even during a recession or find their products or services in higher demand due to economic hardship. We need to keep in mind that the coronavirus crisis is not, as the economic downturns from the 1980s and 1990s, a typical “business cycle” recession. For that reason, industries that we typically identify as recession proof businesses, like auto repair or college and universities, have not made the list this time.
The amount may vary depending on your business needs, but a good starting point may be enough to cover three to six months of operating expenses. Business owners should adhere to their budgets regardless of the economy, but it’s especially important to operate within a budget when sales are lagging. To get a clearer financial picture, assess all revenue streams, identify fixed costs, consider variable costs, and calculate your profit margin. Your event planning business could expand its clientele by engaging families that are interested in throwing family get-togethers or parties to take their minds off their problems.
Keep more revenue and save hundreds with the lowest rates in the industry
Staying recession-proof is all about being needed by your customers, regardless of how the economy is faring. It’s a bad idea to start a business during a recession if you have no prior experience. If it’s the right time for you, you have the competence, and you can line up customers to earn revenue, go for it.
Here are the top recession-proof industries, along with common traits needed to survive uncertain times. If you don’t have the resources required to take on such massive cleaning projects, you can certainly try your hand at personal cleaning services. But demand for cleaning services will almost certainly increase exponentially once these measures are eased. That gives you some time to start your cleaning business and work out any kinks before your customer base surges. In a recession, customers may reduce purchases or take a longer time to pay invoices as they’re also trying to save cash and reduce waste.
Of course, not all businesses are suffering from the downturn as severely as others. And although the coronavirus outbreak has impacted pretty much all spheres of our lives, from education to health, several industries that have been stable or even grew during this situation. Hardworking, business-savvy individuals are great candidates for a grocery store business, which is another one of many recession-proof business ideas. People have to eat and when they cannot afford to eat out, they spend at the local grocery store, so your job is to make food easy to come by for them. While it’s possible to get into this market as a beginner, having previous experience with managing a grocery store and relevant experience working with grocery software is a major plus.
Bespoke startups
For example, people might attempt to make bread during a recession, but it’s unlikely they’ll try to whip up baby formula or cobble together handmade shoes. Kurt Adams is a Senior Editor at LendingTree, where he manages our network of freelance contributors. He also oversees small business content and frequently edits mortgage and credit cards content.
Cleaning Services
Employment figures are an indicator of how well an industry is performing. If the healthcare industry doesn’t need to reduce staff at the same rate as other industries, evidence suggests the health sector outperforms other sectors during economic struggles. People cut back on luxuries during a recession, but that doesn’t mean they never buy anything that isn’t strictly necessary. There’s even a tongue-in-cheek economic theory called the Lipstick Index, which argues that sales of cosmetics will always rise during bad times because they’re a relatively affordable luxury. For many, dining out during a recession starts looking like an extravagance.
Recession-Proof Online Business Ideas
However, there are some enterprises considered pandemic-proof businesses or ones that fare better in tough economic times, such as auto repair and discount retail. One note is that this business will require you to set your emotions aside to a certain extent because the people you’ll be dealing with will likely have fallen on some hard times. If you’re looking for a business idea that will take-off during a recession, though, this is undoubtedly one of them. Unfortunately, a bad economy means that many people will no longer be able to pay for things they purchased on credit while the economy was in better shape.
Many consumers and businesses want to avoid having to buy new during financially tough times. Maintaining a vehicle may mean you’re able to put off purchasing a new car. Fixing your refrigerator may prevent or delay a trip to the appliance store. It’s easier to spend a bit of money on mending an issue than to take on a monthly Recession proof businesses payment when times are tough. Companies that offer these repair and regular maintenance services will see less of a dip in business during a recession than others might. For a business to survive a recession, it needs strong leadership, an excellent product or service, attentive customer care and a handle on industry trends.
Plus, customers may switch to higher-priced brands with reputations for quality, knowing the item will be durable. While inflation doesn’t necessarily correlate to recessions, luxury goods often hold their value during this time, so demand may rise. And, B2B organizations that serve these recession-proof businesses will not see as big a drop in accounts receivable. Jimmy Daly started Superpath, a professional community for content marketers, a few months after the start of the pandemic. He chalks up its success to its focus on careers because it helped members get advice, find work, and develop skills during a difficult economic time.
Not only are beauty products a recession-proof commodity, but they are also highly scalable. As you bring more money into the business, you can add more products to your line, helping you scale more sustainably and with demand. For example, Glossier started out with only 4 products, and has now become a billion-dollar beauty brand. Care workers do some of the most valuable work in our society, assisting seniors, people with disabilities, and other individuals who might need help looking after themselves on a daily basis.