Starting a business is generally considered a difficult feat. But there are certain kinds of businesses that thrive in good times and bad. Even in times of financial crisis, recession-proof businesses continue to operate and make a profit. This article addresses starting a business during a recession and what types of businesses are recession-proof.
Starting a Business During a Recession:
Many waits for the perfect moment to execute their business ideas but are surprised when hearing that a recession might be the ideal time to start a new business - their latest venture can serve as a safety net for those without jobs.
In search of a new career, entrepreneurs aim to create new opportunities for themselves, and others like them. But before venturing into a business deal, you should research recession-proof industries and focus on starting your business in one of these.
While many are reluctant to dive into something new during an economic crisis, this could work in your favor, as you’ll face less competition. In addition, established businesses that make money during a recession would also be less competitive because the recession will affect their operations. Thus, you’d be starting with a business plan optimized for the current economic state and buying power.
Costs in starting a business during a crisis period could be lower—manufacturers, suppliers, and vendors are usually willing to negotiate prices during such periods. Equipment might also be obtained at a lower cost—companies are selling their goods at low costs to make at least some earnings during a difficult time. You could even get highly qualified workers (with the required skill set) laid off due to the lousy economy.
You could focus on low-risk business ideas and consider clients' needs caused by the current situation. Then, if you manage to solve the problems people face, you can make a significant profit.
Another benefit of starting a business at such a time includes setting up your business for subsequent sucess when the economy recovers. If you succeed during a recession, you'll excel when the economy becomes optimal.
A recession-proof business is not something unseen or unheard of. Many of the most successful companies operating today had their beginnings during a recession. Thos who wish to invest won't be reluctant - experienced investors know that during recessions, it's better to move their money from the stock market and invest in promising new businesses.
Most services used daily are provided by companies that were established in difficult economic times. For example, Microsoft was founded in 1975, during the oil recession and the Great Recession of 2009 - which resulted in the establishment of many of our favourite companies: Airbnb, Uber, Venmo, and Slack.
Baked goods will never go out of business; people are constantly buying bread, cakes, and other baked goods. The baked goods industry is one of the industries that do well in recession—perhaps even better than a typical situation. The upside is that you don’t need to have any specific qualifications to open a bakery—although a love for food and some managerial skills might be a plus. The startup expenses of this business aren’t too substantial; you only need several employees, to begin with. If you’re producing high-quality goods, you can attract a lot of customers and make a profit.
Fast Food -
One of the most recession-proof products is fast food. Since the introduction of fast-food chains, people have constantly turned to this comfort food in times of trouble. You don’t need any specific expertise to become a fast-food supplier. And if you provide tasty food at affordable prices, you’ll be able to earn a decent income soon.
Auto Repairs -
Auto repair shops are among the recession-proof small businesses since cars are everyday necessities. If your car breaks down, we turn to an auto repair shop. Many cannot afford to go without a vehicle and purchasing a new car during a recession is a considerable expense. Experience is crucial in starting this business, but you’ll have guaranteed job stability and a steady flow of income once you do.
Dry Cleaning -
Laundry services and dry-cleaning are mostly unaffected during difficult periods, as people like to keep their clothes clean at all times. If you have any experience in the industry, you should give this option a try.
Residential Cleaning -
Owners and renters always wish to have their personal space clean, so you could specialize in providing cleaning services for apartment buildings. As one of the recession-proof businesses for 2021, the compensation you receive for these services is enough to keep your company operational, even during a recession.
Health and Senior Services -
The constant advances in medicine and science call for a more significant number of healthcare service providers. Those with a medical background should look into starting one of the best recession-proof businesses by either providing a particular healthcare service or for elderly care, as an increasing number of the elderly require assistance. For medical professionals, starting a business in a recession is a great idea.
Veterinary Services -
People care deeply about their pets. And pets require professional care. So, veterinarians shouldn’t worry about starting a new business even during a crisis; they’ll appreciate a profitable outcome regardless of the economy.
Funeral Services -
Sadly, many funeral services (burial, cremation) are in constant demand. These services are possibly the safest business to start, and you don’t need any previous experience. You only need to be professional and respectful, and you’ll have a constant workflow and an excellent income.
Baby Products -
Children cannot be neglected even in critical moments. One of the recession-proof business ideas includes selling baby products. No experience is required to start something of this kind, only an entrepreneurial spirit. If you decide to go into the baby-products business, you could earn substantial profits.
Accounting Services -
Even during an economic downturn, people still need to hire accountants for bookkeeping, tax prep, and other financial services. To establish a business of this kind, you need to be a certified accountant or bookkeeper. If you have the required education and certifications, you shouldn’t think twice about starting a business because recessions have a low impact on this sector, thereby turning a profit.
Freelance Writing -
Content writers are constantly engaged with writing news articles and creating content for various websites. Freelance writers can earn solid wages.
Freelance Translating -
Even with improved automated translation services, the demand for human translators is still high. Translation services are well-paid. And if you know languages, you can utilize this skill and earn money.
Virtual Assistants -
These assistants provide administrative services for organisations and businesses and are provided remotely online, or via phone. Virtual assistance is one of the good businesses to start in a bad economy.
Many decide to go back to college when a recession hits - so tutoring is going to be in demand. Another upside is that you can conduct this business remotely as well or combine online tutoring with in-person training.
Therapy and Life Coaching -
Recessions are stressful times, and people often face emotional and psychological problems. Providing help to people makes for a recession-proof small business. If you are a licensed therapist or life coach, you should start your own business. If you're a licensed therapist or a life coach, you should start your own business, which is practical since there are no ongoing expenses - you only need your expertise and time to make a profit. You could offer your services online and aim to be one of the top-rated online therapists.
Digital Marketing -
The dire state of the economy calls for increased use of marketing, especially in digital form, which could be the best business in a recession. Digitial marketing strategies - such as SEO, email marketing, and social media campaigns - are the fasted and most cost-effective ways to attract new clients. If you have experience in the industry, you might want to consider starting a marketing or advertising business - it pays well, and there's a constant need for it.
Courier Services -
With the rising popularity of online shopping, a need for courier services has become apparent. Companies like FedEx and UPS are thriving, proving that there are businesses that do well in a recession. You don't need specific experience to start this kind of business. Instead, you should give it a go since there is so much growth potential.
Physical Security -
Public institutions require security on-site to protect them from potential attacks, which, in recessions, is essential for banks and other organizations that deal with money.
Home Security -
Rising crime rates entice some to resort to top-notch home security systems to protect their property. If you know how to install home security and alarms, you'll have your hands full during a recession.
E-commerce (Electronic Commerce) -
E-commerce is possibly the best industry to start a business during a recession. People are constantly shopping online, especially during a pandemic. You can become an online retailer and sell (or re-sell) goods. To operate this type of business, you need to be self-motivated and dedicate enough time. If your online shop is successful, you can earn a substantial amount of money.
Debt Counseling -
During a recession, some cannot make payments on time and debt to accumulate. If you're one with experience in debt-handling, you could start a debt counseling business, which could bring significant profit.
Recession-proof business prove that you can be successful even during times of financial hardship. Before starting a business, outline what is essential in a recession and provide goods or services that will satisfy the needs of the population, hence ensuring the success of your business and a steady income.