7 Ways to Recession-Proof Your Business +9 Recession-Proof Business Ideas

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Make sure you only start a business if you’re an expert and are financially stable. Look for businesses that have demand no matter what the economy is doing. The economic cycle is the ebb and flow of the economy between times of expansion and contraction. Recession resistant refers to an entity such as stocks, companies, or jobs that are not greatly affected by a recession. An asset with a negative beta has an expected return below the risk-free rate during normal times. Recession-proof investments often underperform during normal times, as well as during the recovery period following a recession.

  • And even when people are cutting back on spending, they still need to eat.
  • Even during a recession, people need comprehensive treatment and preventative health care services.
  • With rules and regulations getting more complicated and confusing, consulting experts seems to be the go-to move.
  • Consequently, these effects from the pandemic skyrocketed the number of purchases for children’s books, games, and crafts, among others.
  • While the Great Recession occurred due to a property market crisis, not all recessions have had the same impact on home values.
  • These include a reduction in GDP, fewer retail sales, higher unemployment, and slowdowns in manufacturing.

Our cloud-based platform delivers real-time visibility into the financial performance of any business, from a consolidated level down to individual transactions. This means you have the information you need to adapt quickly as financial markets shift and can focus on strategies to help your business weather any financial storm. If your business isn’t any of the types listed above, you can still adjust if you understand how to manage cash flow for hard times. Asking for shorter payment terms from customers, for example, and start now to build up your cash on hand. Businesses that provide goods and services with inelastic customer demand tend to do well in a recession. Examples include certain luxury brands, niche products and baby care.

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You can invest in stocks for companies in recession-resistant industries. 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. While you might not be able to do that, you can find other ways to help people work online. An easy option is to become a website hosting reseller and work with small business owners here. People won’t stop getting sick just because of economic downturns, so you can still get new and returning patients.

This Recession-Proof Company Has a Best-in-Class Dividend – The Motley Fool

This Recession-Proof Company Has a Best-in-Class Dividend.

Posted: Wed, 22 Feb 2023 08:00:00 GMT [source]

In fact, the recession proof business ideas industry was valued at $544.06 billion in 2020, and the demand for it is still growing. It generally makes the recession proof list, no matter the economic climate. 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. That’s why alternative childcare franchises, like Le Village Cowork, are up and coming. Le Village Cowork offers a combined coworking and childcare space for parents looking to spend more time with their children throughout the day — without sacrificing the quality of their work. From restoration to renovation, home services remain popular — and have even increased since 2020.

Financial Services

This idea makes sense regardless of the macroeconomic conditions, but it is especially important during a recession because it allows the business owner to steer the ship rather than row the boat. During a recession, when inventory turnover may be slow, inventory can become even more costly, since it becomes more susceptible to obsolescence, theft, damage, and higher costs for longer storage. Downsize the less popular, less profitable and more easily replaced inventory to increase cash flow while also evaluating the supply chain and considering stocking up on best sellers. As with maintenance and utility services, industries offering delivery services are staying afloat during recessions. In today’s crisis, the social distancing implemented across the globe impacted the freight industry positively.

Healthcare and other services for seniors are generally recession resistant. Home care is growing by billions of dollars, and health is a practical and necessary industry even in a recession. If you’re looking for good businesses to start in a bad economy, the healthcare industry makes the list. Taking care of yourself and loved ones are necessary — even when times are tough. Guidant’s 2021 Small Business Trends survey also highlights this fact, listing healthcare as a thriving business during the pandemic. During a recession, consumers may reduce spending, leading to decreased revenue and profit margins.

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But not all businesses are affected in the same way or to the same extent during a recession. The difference in outcomes was largely due to the type of product or service they sold and how they met customers’ needs. Customers still buy essentials during economic downturns, such as food, utilities and other household staples. Additionally, certain services are still in demand during a recession, such as healthcare, automotive repairs and education. Industries that provide recession-resistant products and services are sometimes called recession-proof or defensive businesses.

recession proof

Home improvement companies still have plenty of work to do during tough economic times—which makes them great candidates for recession-proof small businesses. Harry Campbell started The Rideshare Guy, a community and resource platform for the gig economy, in 2014, but he noticed a surge in business during the pandemic downturn. «During the pandemic, I noticed a traffic spike as many people were interested in exploring such side hustles to stay afloat during tough financial times,» he says. The boost in community members caused Harry to work harder than ever, but it paid off in unprecedented growth. In times of negative economic growth, a business’s first impulse will be to cut costs and keep its finances in check.

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