The fear of a recession being imminent is a terrible thing. A recession is something that we cannot control individually, making you may be very nervous. However, you can prepare for a recession financially by making a change in your job or career.
Recession-proof companies can survive even during an economic downturn. This subsequently means more disposable income for you!
If you worry about financial security or would like to start a business, then consider recession-proof industries.
Before we go into what industries are recession-proof, let’s discuss what a recession means.
What does a recession mean?
A downturn occurs when there is a temporary widespread reduction in spending. This is because customers become anxious about the economy or have lost their jobs and sources of income.
The Gross Domestic Product (GDP) for two consecutive quarters has been officially characterized as a decline. GDP is used to determine a country’s total economic activity. When a recession is officially declared, it is typically been going on for a number of months.
The National Bureau of Economic Research (NBER) defines a recession as “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.”
So numerous industries can be affected by recessions that it’s important to consider industries and businesses that are unlikely to be affected. That’s why you must select industries and corporations that are likely to survive economic downturns.
What are recession-proof businesses?
Businesses that are resistant to economic downturns often operate in industries that are essential but often overlooked. These businesses are often ones that require products and services that everyone requires, even in times of economic decline.
Companies in industries that provide staple goods are the type of companies that tend to do best during economic downturns. Plumbing and electricians, grocery stores, and similar types of businesses do well when the economy is down.
If you’re interested in recession-proof business opportunities, then consider these suggestions.
Industries that are recession-proof
Here are some industries that are immune to economic downturns and could help you thrive even during difficult times.
14 Recession-proof businesses to consider
According to the list of the drought-proof industries listed above, let’s look at some actual small business ideas. You may be surprised to learn that what makes the list of recession-proof companies is quite different from what you might expect.
However, despite the current downturn, these are products that remain in high demand.
1. Baby products
Baby products are one of the industries that are recession-proof. After all, if you have a child during a recession, diapers and bottles will not be a problem for you.
Many parents will cut back on their expenses before cutting back on buying things for their kids. Children’s products are often recession-resistant, so they aren’t totally unrecession-proof.
Parents may not be able to spend hundreds of dollars on toys at Christmas during a difficult time, but they will nevertheless purchase presents for their babies. Children grow rapidly and require new clothes frequently. Kids will continue to need new shoes for school in September.
If you are looking for a start-up that can prosper during a recession, focus on an enterprise that caters to kids and infants.
2. Food and beverage
Food and beverage are also recession-proof industries. Even during a recession, people still need to eat. While people may avoid luxury items by eating at home, they still enjoy eating at their favorite restaurants.
Sales at grocery stores, candy sales, and alcohol sales all tend to increase in recessions.
These downturn-proof companies are thriving because consumers consider things such as chocolate to be “affordable luxuries” during challenging times. People will still treat themselves to them instead of spending their savings on a larger purchase.
Did you know that Snickers Bars were invented during the Great Depression? This illustrates how much sugar we crave when stress levels rise.
Stores are a good place to be in because people tend to live on home-cooked meals. This means that they will spend more time cooking. And of course, people will need toothpaste, laundry detergent, and other items regardless of economic circumstances.
3. Retail consignment
When things get difficult, many people cut back on buying new clothing. But it doesn’t mean they want to give up on shopping.
Sales of secondhand stores increased by 31% during the last recession even as gross sales of other retailers declined. In fact, the thrift store trend remained even after the recession had ended. It is just as common to purchase used clothes as it is to purchase new garments.
Because people also want to save on electronics, jewelry, musical instruments, and other items by purchasing them used, retail franchises and secondhand stores such as pawn shops are also good businesses to start in bad economies.
4. Courier and delivery services
People will need mail, which is why courier and delivery services are always among recession-proof industries. Courier and delivery businesses are less vulnerable to recession than other firms are.
Although sales may drop, we must continue to ship items. And more people are now selling used items through online channels, increasing the demand for delivery.
Some companies may even outsource their courier services needs. Thus, even if it rains, the sun is shining, or there is a recession, there is a demand for delivery service.
Don’t forget what I said earlier about the baby products market being recession-resistant. This is also the case for childcare. It can be difficult for parents to pay for things like daycare costs during tough economic times, but it’s necessary for many families. When both parents work, childcare is especially essential.
Even if a parent loses their employment or has to cut back on hours, they may choose to keep their children in childcare. Many benefits to young children exist when their environments are constant and unchanging, especially when there is so much change that they do not understand. Childcare services are one of the industries that are highly recession-resistant.
6. Health and senior services
Healthcare and services for seniors tend to be recession-resistant. Homecare is skyrocketing in value, and medical care is an essential industry. If you’re considering starting up a business in a poor economy, healthcare is an excellent industry to get into.
As more baby boomers retire, demand for assistance will probably grow. It would be unwise to discount this fact during an economic slump.
Seniors who are living independently but need help running some errand or making a home-cooked meal could hire a helper. This is why nearly any industry that employs seniors can be a good option for a recession-proof business.
7. Technology and IT
Although quarantines and stay-at-home orders have brought to light the need for technology, they have also demonstrated the substantial demand this technology will meet.
Telecommuting and working from home are only going to become more widespread, especially as so many companies have seen the benefit and are saving money on overhead costs such as rent.
The popularity of working from home is also likely to increase demand for companies that provide services for information technology, since businesses all over the world are looking for ways to improve their telecommunications.
Even doctors are encouraging patients to call in instead of going to the hospital.
Production support for at-home services and firms has also become a recession-proof industry.
8. Repair services
Even in the best of times, something will need repair. No matter what, there is always work to be done!
In a recession, people might even prefer fixing things to purchasing them, or at least delaying a purchase until the economy improves. This is why repair services make good businesses to start in a bad economy.
Businesses specializing in repair work for important items, such as auto mechanics, roofers, plumbers, and home repair companies, will see as much work during a downturn as they will with good times.
Automotive businesses that professionalize their services according to their clients’ needs greatly outperform less flexible competitors during a recession.
9. Cleaning services
No, I don’t mean home cleaning services are going to get more expensive during a recession. But other service areas that are legally required to have cleaning services are likely to be recession-proof. Any office should have a cleaner–a bank, office buildings, classrooms, hotels, and lobbies.
These services are often outsourced to a cleaning service. Even if a company is forced to lay off employees, it will still need a cleaning crew.
When the economy is bad, cleaning corporations are considered recession-proof businesses because their services generate a steady flow of revenue.
10. Accounting services
Another sector that may be in greater demand during a recession is accounting services. In fact, they may even turn out to be in higher demand when times are tough for companies as they look for ways to cut back expenses.
Even during a downturn, businesses must still pay their expenses and keep track of payments and earnings. They are unlikely to dismiss the person who knows what the numbers show.
If you’re good at mathematics, then becoming a financial advisor, accountant, or opening a similar company may be one of the best recession-proof business opportunities you can start!
11. Freelance services
When companies are faced with financial strain they are more likely to employ freelancers rather than full-time workers. Thus, freelancing is a beneficial recession-proof industry.
The marvelous thing is that you can cultivate multiple income streams by serving several markets. For example, you could work as a virtual assistant and be a freelance writer as well.
That way, you are able to work with a variety of tasks without depending on only one type of job for your entire income. And you could even begin working as an independent contractor with no experience.
12. Pet care business
The pet industry made over $100 billion in sales for the first time in history in 2020. This demonstrates pet supplies such as dog food, which are regarded as recession-proof industries, are safe investments.
Another heartening and encouraging fact is that 52% of pet parents said that more of their income went to their pets than they themselves did.
Vet visits, grooming appointments, and essential pet products can survive the economic downturn in spite of being subject to reduced sales. Therefore, these facilities make great recession-proof business opportunities!
13. Real estate
If you invest in real estate or rental properties in a downturn, you can still make a profit. For example, owning a home you can rent out may still do well even in a recession, as people need places to live. However, owning a home is not a guarantee of success in this circumstance.
You may also invest in REITs (Real Estate Investment Trusts) that pay out dividends. It can make you money during uncertain periods as well.
14. Self care and beauty
Self-care and aesthetics make the list of recession-resistant industries. Beauty salons are in high demand even during economic downturns because they are services that people desire. They aren’t necessities, however, which makes them recession-resistant.
While people are unlikely to spend a lot of money on beauty and grooming products, they will typically spend on inexpensive items like a haircut or a manicure.
Consider one of these recession-proof businesses for a financially secure future!
This list of industries that are highly recession-proof offers opportunities for people during times of economic difficulty. There is a possibility of launching a recession-proof business or moving into a recession-proof occupation even when times are tough.