With businesses needing more affordable and efficient marketing, the Tobie Group could step in. It can seem scary to start a business during times of economic strife; however, the right business can put you in a position to succeed no matter the climate. You just need to make sure you’re starting your venture off on a strong foundation. Even if a parent loses a job or has to cut back on hours, they may opt to keep their kids in childcare.

Individuals and businesses alike need to know how to navigate murky economic waters to ride out recessions, and that’s a tough task to approach without professional, insider insight. ‘Recession-proof business’ is a relatively loose term used to describe certain companies, industries, or assets that are better equipped to economically weather the impact of a recession than most others. And history proves that businesses can prevail, or even thrive, during them.

How to Recession-Proof Your Business

When larger purchases like electronics, vacations and new cars are out of reach, people tend to console themselves with alcohol. It isn’t a healthy habit, but it is one of the best-performing businesses in a recession. Others like Salesforce, Google, and Facebook launched immediately before an economic winter, and these companies survived recessions to become some of society’s most prominent business names.

Savvy entrepreneurs understand that waiting for the “perfect” moment to start a business is futile. A better tactic is to opt for a company that can withstand the test of time and economic downturns by choosing recession-proof industries. While cleaning businesses do have exposure to recessionary pressures, certain cleaning business models are well-suited to endure economic contraction. For example, cleaning businesses servicing commercial clients operating in recession-proof industries experience reduced exposure to a recession.

And 29.4 percent expect finding affordable parts to be one of their biggest challenges in 2022. While some people might neglect repairs during a recession to save money, this won’t be the case for everyone. Other recession-proof businesses will also require occasional repairs through a recession. The food industry can be very resilient during times of economic hardship.

These industries are usually ones that everyone needs, even when finances are tight. But before we dive into what industries are recession proof, let’s discuss what a recession means. If you’re all-in on a single revenue stream during economic turbulence, you’re making yourself particularly vulnerable to a lack of prospects’ interest or waning needs.

The Future of Recession-Proof Industries

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. 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. Sales at grocery stores, candy sales, and alcohol sales all tend to increase during a recession.

And with a recession comes a minimum two-month downturn in the economy, affecting Gross Domestic Product (GDP), real income, employment, industrial production, and wholesale-retail sales. One might think that during a recession child care centers would take a hit as more people are laid off work, more able to take care of their children full time. There were a total of 86,212 centers in 1992, with that number jumping to 111,506 in 2001. You can always learn as you go, but we don’t recommend it as technology is something you really should have an interest in and some passion for.

‘Inc.’ in a company name means the business is incorporated, but what does that entail, exactly? Leaks and electrical failures are not only inconvenient but can actually be hazardous or even life-threatening. Many home repairs in these domains require extensive knowledge, if not an actual license from the state, making professionals necessary. When things break down and money is on the line, it’s more important than ever to have qualified professionals ready to assess and repair the problems.

Home Improvement Services

During a recession, consumers will skip out on spending in certain product categories. The average small town grocery store makes around $60,000 up to around $300,000 or more per year, and the potential is even greater if you live in a heavily populated area. Of course, this may require spending more on building costs, which would mean a greater upfront and ongoing expense. With a regular stream of customers coming into your shop, you could expect profits of around $70,000 to $250,000 per year. Health care spending in the United States grew at a rate of 4.2% from 2008 to 2012. After the recession of the early 2000s, the health care sector grew a whopping 8.8 percent.

• Since the onslaught of cybercrime, every aspect of technology now needs cybersecurity defenses—from our computers, smartphones, and tablets to the websites and apps that we access.
• The general understanding is that two consecutive quarters of negative growth in an economy constitute a recession—and that negative growth can utterly decimate once successful businesses.
• Experts suggest these five start-up ideas are well-suited for periods of economic downturn because of consumer demand.
• Remember what I said earlier about baby items being recession-resistant?
• 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.

In times of economic uncertainty, the best business opportunities can be found in recession-proof industries. Whatever your industry, there are certain features that will make your business more likely to survive tough economic times. A business model has a much better chance of being recession-resistant if it is adaptable, is focused on preparation, and has consistent consumer demand. For example, in the early part of the 2008 economic crisis, revenue at tax preparation provider H&R Block rose 11%, for example.

Effective cash flow management

Grocery stores are a good sector to be in, as people tend to eat in more. And of course, people will always need toothpaste, laundry soap, and other staples no matter the economic situation. After all, if you have a baby when the recession hits, that’s not going to prevent you from needing diapers and bottles. That means recessions can impact a wide variety of industries across the board. Which is why it’s important to consider businesses and industries that are recession proof.

It’s not just about a safe place to leave your child while you’re at work. Also, digital marketing businesses can operate with lower overhead costs—adding to their recession-proof nature. Many business owners find one of their largest business expenses is the cost of labor.

Damaged roofs, leaking pipes, and other issues will still need to be repaired immediately. The best strategy for protecting your business depends on the type of recession, your industry, and a host of other factors. Traditionally, many entrepreneurs assess their current business expenses to identify areas where they can save money. Many businesses may take the initiative to invest in technology to help automate processes and reduce waste. Likewise, businesses may search for more affordable materials and suppliers. Assessing variable costs can help you save significant money and emerge from a recession even stronger.

Shipment of goods in a global economy persists even in a recession, leading to a wealth of business for many delivery companies when other businesses might be struggling. Delivery services continue to be more and more in demand, and that demand isn’t subsiding during Recession proof businesses downturns. Here is a list of 10 recession-proof sectors to consider so you can start a business on more solid ground. Small Business Trends is an award-winning online publication for small business owners, entrepreneurs and the people who interact with them.

Products

Comfort foods, like candy, are typically low in cost — and many believe that low cost is worth that momentary bliss. There’s not much to say about water, electricity, and gas utilities — except we all need them all the time. While some comfort items and vices can do well in a recession, services that people need usually perform the best. That’s why utility services historically continue to do well, no matter the economic situation. Childcare options also include family members caring for children or a personal live-in babysitter or nanny, both of which come with hefty price tags.

There are some services, like waxing and hairdressing, that most of us just don’t have the skills to execute well at home. In general, anything requiring expertise is hard to replace or do without, and therefore more recession-proof. Not only are beauty products a recession-proof commodity, but they are also highly scalable.

• When economic conditions are favorable, businesses may not prioritize investing in technology and automation.
• Because they offer needed products and services, they are the last industries to be affected by changes in consumer spending.
• It’s looking likely that we’ll see a recession in the United States in the coming year.
• By providing essential solutions, these businesses ensure their relevance and demand even during economic downturns.

While most analysts define a recession as two consecutive quarters of negative growth, other indicators can point to a recession. These include a reduction in GDP, fewer retail sales, higher unemployment, and slowdowns in manufacturing. The reality is people still want to look good, and some beauty treatments cannot be executed without the help of skilled staff. Also, this is not a service you can outsource to another country, meaning consumers need access to in-person beauty professionals. When it comes to recession-proof businesses, you have plenty of options within the industries listed below.