When exploring business opportunities, you must think about more than their profit potential; you should be confident your chosen businesses will survive economic changes.
While inflation is on the rise and the stock market has struggled, there are recession-proof businesses that might assist you in gaining profit during times of unpredictability.
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But the more crucial thing is evaluating the existing market and selecting the ideal business. Here’s a guide to Recession-proof business models to keep in mind.
Table of contents
Top recession proof business ideas
1. Freelancing
If you are an expert in a particular field, then freelancing is a feasible, low-investment option which offers an invaluable revenue stream during a recession. While certain businesses might unfortunately have to let go of full-time workers, they can keep freelance staff members, which can be less costly.
On a similar note, think about setting up as a freelancer as a side hustle alongside your present position (subject to the allowances of your contract), as this will not only offer some extra income on the side but also serve as a safety net when a recession hits, and your full-time employment becomes at risk.
2. Cleaning products and sanitation services
While some may give up house cleaning services and do it independently, others may still prefer hiring cleaning services.
To preserve a safe and sanitary atmosphere, businesses or other organisations prefer hiring part-time or full-time cleaners to maintain neat and clean conditions, even during an economic downturn.
The coronavirus outbreak hasn’t decreased the demand for cleaning services at all. During such times, the number of individuals searching for cleaning services was twice the same as in the pandemic period.
3. Online teaching
Online teaching could be an option if you’re skilled and enthusiastic about a particular topic and can interact well. Video conferencing software like Microsoft Teams, Zoom, Google Meet, and personal tutoring websites have made it simpler than ever for instructors to set themselves up as online tutors.
Demand for online tuition throughout all academic subjects undoubtedly increased during the pandemic, and its popularity is here to stay.
Its adaptable nature indicates you can offer services from anywhere without too many initial set-up expenses.
4. Car repairs
Your car may have a faulty starter, radiator spills or inadequate emissions from time to time. And while certain individuals can tune up their vehicles on their own, many of us aren’t able to do the same.
In addition, individuals are also more likely to choose to repair their car during an economic downturn rather than buy a new one. If you don’t have the financial backing to start your own car repair company, you can provide these services to friends and family first.
Over time, the company can expand with the power of socialising and tactical advertising.
5. Beauty business
Individuals may be trying to cut costs, but they’re still likely to make purchases of beauty and self-care items. According to the lipstick effect, individuals are prone to invest money in small pleasures such as hair salons and nails.
Those with limited funds can also purchase their skincare, cosmetics, and body care expenditures because these are cost-effective luxuries.
So, this might be an excellent opportunity to launch an online boutique or to film makeup video blogs on YouTube for additional income.
6. Logistics, freight, and courier
Companies within the transportation, freight, and logistics industries now have access to vast information that assists them in effectively adapting services to meet customer demands.
With eCommerce establishing itself at the cutting edge of economic growth, the freight industry serves as the economy’s foundation. That stays true even if retail sales sink during a recession.
Because the supply of packages cannot be contracted to cheaper labour markets, courier and freight companies need a domestic presence. So it is a great alternative business.
7. Accounting and finance
The need for accounting and finance services remains strong even in recessions or downturns. While these sectors might not be generally seen as “recession-proof,” they serve essential parts in various aspects.
During difficult circumstances, people and companies still require accounting services for tax preparation, estate planning, and accounting.
In addition, the demand for financial services persists; customers and companies look for access to credit cards, auto loans, business loans, and other options for financing.
Despite the current economic situation, the significance of preserving financial stability while handling resources drives a constant need for financial and accounting services.
8. Debt collection
In times of recession, debt collection becomes an essential thriving business. As the economy fails, people frequently need help to meet their financial goals, falling behind on transactions for necessities such as car loans, medical bills, and utilities.
Debt collection seems like a recession-proof business, thanks to a higher need to recover overdue payments during difficult financial times.
9. Discount retailers
Given how much consumer income decreases during recessions, discount retailers generally prosper during recessions. When customers’ revenue declines, they have two options: they can either purchase fewer items or substitute cheaper goods.
They can’t just shut them out of their budget since there is a minimum amount of staple products, like food and basic household supplies, that they will have to purchase. That suggests they will look for less expensive options to save money on them, which is why discount retailers do well in a recession.
10. Baby goods and services
Baby goods and services are nearly recession-proof. Babies continue to be born, and their parents will need everything to provide care.
This involves baby food, diapers, formula, bath and hygiene supplies, and toys. Parents will make further reductions so they can at least treat their children well.
Frequently asked questions
What are the best small businesses to start during a recession?
There are many small businesses to start in a recession, such as repairs and servicing, digital services, consulting, cleaning services, accounting, financial planning, bookkeeping and freelancing.
What is a financial crisis?
A financial crisis happens when asset prices drop significantly, consumers and businesses cannot pay their loans, and financial institutions are short on liquidity.
Hire Small Business Accountants
Work with a UK-based accountant for tax, accounting, payroll, & EIS/ SEIS needs.
Final thoughts
A recession is not always bad for companies, as certain industries might thrive during one because their goods are necessities, not luxuries.
Understanding what industries prosper during an economic downturn could assist you in establishing a strategy for finding steady employment or secure investments that won’t leave you without a job or capital.
