In recent years, the word “recession” has become all too familiar. From the housing market crash of 2008, through the pandemic to the current cost of living crisis, it’s clear that recessions can happen at any time. And with recessions come downturns for businesses in most sectors.
So the question is…is any business safe in a recession?
Surprisingly, the answer is…yes! While no business or industry is ever truly recession-proof, there are certain industries that are more robust than others when it comes to times of crisis and economic downturns. We’ve identified 5 sectors that fare better than others during recessions. So if you’re thinking about starting a new business, then consider looking at these recession-proof industries.
But before that, let’s take a quick look at what a “recession” means.
What is a recession?
A recession is a period of temporary economic decline during which trade and industrial activity are reduced. It’s defined as two consecutive quarters of negative economic growth, as measured by a country’s gross domestic product (GDP). This can be caused by a number of factors, including financial crises, natural disasters, or political upheaval.
During a recession, businesses may cut back on production, leading to layoffs and reduced consumer spending. As a result, economic growth slows and unemployment rises.
While recessions are often viewed as negative events, they can also offer opportunities for businesses to invest in workers and infrastructure, paving the way for future growth.
What is a recession-resistant business?
A recession-proof business is one that is able to weather an economic downturn. Typically, these businesses are essential services that people cannot do without, such as healthcare, transportation, or food.
As people cut back on spending, they gravitate towards businesses that offer good value for their money. Therefore, a recession-proof business is one that provides a product or service that people want or need, at a price they can afford.
So if you’re looking for the perfect recession-proof business to start or invest in, then keep reading to find out which ones have the best chance of riding out the storm!
Top 5 recession-proof business sectors
Some of the answers may surprise you…others you’ll have guessed. Either way, the demand for these 5 industries remains strong even during a recession. Here are the 5 top recession-resistant businesses:
1. DIY & Repairs
One of the best way to cut costs during a recession is to stop buying new things and look to repair them instead. If you’re a DIY guy or a gal, then this won’t be a problem for you. Got a big home renovation project you’re planning? See how much of it you can do yourself, whether it’s painting, fitting, or making something yourself like a new set of shelves.
Businesses that sell home and garden supplies, car mechanics, plumbers, and auto parts retailers like AutoZone do well during tough economic times.
One essential area where homeowners can save money during a recession is HVAC repair and maintenance. Instead of immediately opting for a costly replacement, consider troubleshooting common issues yourself, such as replacing filters or cleaning the condenser coils.
If you encounter more complex problems, don’t hesitate to reach out to professionals. Companies like Lee’s Air offer reliable services for heating and cooling systems, ensuring your home remains comfortable without breaking the bank.
Moreover, regular maintenance can prolong the life of your HVAC system, preventing unexpected breakdowns when you need it most. Simple actions, like checking for air leaks and ensuring your thermostat is functioning correctly, can save you from higher energy bills.
By investing a little time and effort into your HVAC system, you can keep it running efficiently and maintain a cozy environment in your home, all while keeping costs manageable during uncertain economic times.
When it comes to home maintenance, plumbing issues are another area where you can save money by opting for repairs over replacements. A leaking pipe or a faulty water heater doesn’t always mean it’s time for a costly new installation.
Often, a skilled plumber can diagnose the issue and offer a repair solution that’s more affordable. If you’re comfortable with basic plumbing tasks like fixing a leaky faucet or unclogging drains, you can cut costs even further by handling these small jobs yourself.
However, for more complex tasks like pipe repairs or water heater malfunctions, it’s always wise to call in a professional. If you’re in need of expert help, finding a reliable plumber perth can ensure your plumbing issues are resolved efficiently without breaking the bank. During tough economic times, choosing repairs over replacements and relying on skilled tradespeople for the big jobs can make all the difference in managing your household expenses.
2. Food & Beverage
The food and beverage sector is often seen as a safe haven during economic downturns, as people continue to need to eat and drink regardless of the state of the economy. This essential nature of the sector means that businesses in this space can weather recessions relatively well, making it an attractive option for investors or anyone looking to start a business.
While people may spend less time and money eating out at restaurants, they’ll still be sure to spend on food and drink essentials. In addition, the food and beverage sector is generally less volatile than other sectors of the economy, meaning that it experiences less extreme ups and downs. This makes it a more stable investment during periods of economic uncertainty.
3. Entertainment
The general rule in times of economic hardship is that consumer spending drops as people focus their spending on essentials like food, fuel, and health. But that’s not always the case. Experiences offering the chance to “escape” are especially popular amongst Millennials, even when spending is tight.
The key thing to note here is that it’s “experiences” that millennials crave compared to “physical things” like cars or expensive gifts. As this study shows, a whopping 78% of millennials would choose to spend money on a desirable experience or event over buying something desirable.
So keep that in mind if you’re thinking about investing in a franchise…Millennials especially, will still spend on experiences, regardless of the state of the economy!
4. Education
The education sector is another recession-proof industry, and may even experience growth during wider economic downturns. Education is an important pillar of any modern society, so parents will do everything they can to keep their children in school, no matter the cost.
But it’s not just children. As the U.S. freelance workforce continues to grow, remote work becomes the norm and more businesses move online, employees need to continually upskill in order to keep up in a rapidly changing digital economy. That’s why online education is becoming essential to acquire new skills and knowledge. In fact, there may be more reasons to invest in online education during a recession in order to boost your earning power if, for example, you’ve lost your job.
5. Healthcare
There are few industries more essential than healthcare, and that means the sector is generally recession-proof. People will always need medical care, even when economic conditions are tough. That means businesses in the healthcare sector can weather downturns better than most.
Of course, there are still challenges during a recession. People may be less able to afford medical bills, healthcare costs may rise, and more people might lose their health insurance. Preventative care might become more difficult when money is tight. But overall, the healthcare sector is a good place to be during tough economic times.
The Bottom Line
So that’s it! As you can see, starting a business during a recession doesn’t have to be as scary as you think. There are lots of recession-proof sectors to choose from…it’s just about choosing the right one!
Partnering with a known-brand like Pinspiration Franchise spans four out of the five sectors: it’s highly educational with their online courses, it’s an “experience”-based entertainment venue, it’s a DIY arts and craft studio…and we provide all the food and drink you’ll ever need to make it a special day out, whether it’s for a birthday party, date night, day out with friends, or a team-building work event.
So, thinking about starting or investing in a new business? Find out everything you need to know about Pinspiration Franchise here.
