A recession within the coming year seems more than likely. While the economy is great today, more than a few economists believe a 2020 recession is quite possible.
1. What if you are looking to start a business today?
2. Are there businesses that you could start – or branch into – that are more likely than others to weather the storm?
Indeed, there are. Here are the eight industries that thrive under recession conditions:
1. Candy: Yes, you heard right. Candy and recessions go hand in hand. Both Three Musketeers and Snickers were invented during the 1930’s depression, and in the U.S., candy sales went up by billions of dollars in the last recession, in 2009. When people can’t afford larger luxuries, they turn to the smallest - and sweetest - kinds. And that means a retail business can launch, or grow, using candy as a lure.
2. Repairs: During a recession, because buying new is not always a possibility, repairing items already owned becomes far more popular. For instance, while car sales historically go down during a recession, automotive repairs go up. The same can be said for computers, furniture and the like. For those who are handy, this can be a boon.
3. Childcare: Some of the best industries during a recession are the ones people can’t live without. When people have children and jobs, they are more than likely to need childcare, especially as they tend to take whatever work (and hours) they can get. This could mean daycare, or an after-school program, or even babysitting – all of these industries remain crucial during times of recession.
4. Niche food stores: In a recession, you might expect the most expensive grocery stores would go belly-up. But this wasn’t the case in 2008. In fact, specialty food stores experienced growth throughout the recession. When someone really loves something (like candy!) buying it during a recession becomes a refuge. As such, specially made, hard to come by, or totally niche items can work.
5. Freelance and temp work: Among the first casualties of a recession is the full-time employee. Many businesses switch to hiring freelance and temp workers to fill the gaps. As such, one of the best industries during recessionary periods is the freelance market, where independent contractors provide businesses the ability to keep going, as they are more affordable than their full-time counterparts. The time to start your side-gig is now.
6. Static businesses: The boring, the mundane, or downright dirty. Some may call them these names, but others call them recession-proof. Businesses like tax preparation, junk hauling, senior care, accountants, funeral homes and so on provide services that will always be necessary, even during an economic downturn. People will always pay taxes, throw away garbage and die. While these industries aren’t sexy, they provide a sense of stability in unstable times.
7. Health and fitness: In 2008, many industries came to a screeching halt. But not this sector. Businesses that helped people remain healthy and fit maintained steady growth during that era. This was particularly true for yoga and Pilates studios.
8. “Sin” industries: When the going gets tough, people crave vices. During down times, sales of alcohol boom, casinos do well, and marijuana sells (this will especially be true as legalizing cannabis becomes more widespread.) It makes sense, no? When people are feeling down, they often turn to something to help ease their discomfort. Any of these ‘sin’ industries tend to have steady growth during a recession.
Although this is not a comprehensive list by any means, it can give you some clues as to what is and isn’t recession-proof.
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About Steve Strauss
Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest, The Small Business Bible, now out in a completely updated third edition. You can also listen to his weekly podcast, Small Business Success.© Steven D. Strauss.
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