Recession-proof businesses refer to those businesses that do not get adversely affected during rotten economic times; instead they keep on flourishing irrespective of how bad the economy of the nation or the world is going on. During the period of recession, job security is obviously the top priority for everyone.
If you are considering starting a new business, one of the important factors that you have to work on is to find out whether the business you are going to start can survive successfully even during the worst kind of recession. The most reliable business ideas are the ones that are not attached to the inconsistent tastes of target customers, are not resistant from outsourcing and have long-term growth potential. Following is a brief rundown on ten such recession-proof businesses.
Health Care
Businesses providing nursing and other medical services remain unaffected even during the lousy economic times. No matter how bad the economy is, people continue to get sick; while they can afford to cut down other costs, but when they are sick, they will definitely get medical help and buy medicines and drugs. That is the reason why healthcare business still nourishes even during a period of recession. In fact, various reports claim that the number of people getting injured or sick increases during economic crisis because of the associated stress and depression.
Businesses Providing Basic, Necessary Services
If your business provides basic, necessary services that people will always need regardless of their financial situations, it will continue to survive smoothly even during economic recession. Non-cyclical businesses can be very reliable in this regard, such as repair services, pharmaceuticals, public utility services like gas and electricity, funeral services and other such things.
Information Technology
In this present age of Internet, all small, mid-size and large businesses rely very much on IT services to get the various processes of their businesses done. You do not necessarily have to run a large tech company; information technology industry is not just about that. Some of the biggest growth areas in IT-sector include database administration, testing and QA, software implementation analysis, systems and networking administration and software design and development.
Discount Retail Shops
If you are running a retail shop, coupons and discount offers can help you survive smoothly even during recession. Discount retail shops do great business during the normal days as well as during a period of recession. When people are going through tough economic times, they start spending less, but they do not stop shopping at all. In an attempt to save money, they prefer to shop in stores where they can buy things at a lesser price as compared to other stores. There was a significant rise of 5.1% in the profits of Wal-Mart during the first few months of the 2008 recession while other retailers had to suffer huge losses.
Luxury Retail Shops
In 2008-09, when the entire world was going through the worst recession period, there was interestingly a significant increase of 20% in the number of worldwide billionaires. These are the people who don’t give a damn about whether it is a recession, inflation or whatever; while the rest of world suffers from job loss, mortgages and other financial problems, they love shopping at luxury retail shops and snatch up designer handbags and other luxurious products.
During the 2008 recession, the annual profits for Prada and Hermes (well known luxury retail shops) was increased by 66 and 13 percent respectively. However, if your target consumers are the ones that are not really exceptionally rich, but have just modest income and who always try to buy status-symbol brands, your business will suffer badly in recession. During a period of recession, such consumers prefer to save money and they avoid luxury shopping. So, you have to target those who are really rich enough to remain unaffected due to recession.
Sin Wins
When recession happens, it brings depression for a large majority of the consumers; and when people are depressed, they smoke more cigarettes and drink more alcohol. The statistics say that the sales of tobacco, cigarettes and alcohol skyrocketed during the 2008 recession. The general formula is that when the economy loses, sin wins. However, this formula does not apply for all types of vices.
For example, the gambling and casino industry suffered badly during the recession. Cigarettes and alcohol are definitely exceptions, but here again, people tend to spend less on it, not by reducing their usual intake but by choosing to buy lesser quality products. For example, during the last recession period, which was probably the worst in the history, cheaper stores enjoyed a significant rise in the sales of wholesale beers while the sales of branded beers from restaurants dropped badly.
Contraceptives
While people are going through difficult economic times, the last thing they want is unplanned expenses; probably, that is the reason why the sales of contraceptives were up by twelve percent during 2008-09.
Cosmetics
The cosmetics businesses also do not suffer much during economic crisis. Women always want to look fashionable, and even if they cannot afford to spend much, they will still find inexpensive ways to pamper themselves.
Candies
Do you know that some of the most enduring candies of the United States of America were launched during the Recession Period of 1930-32, such as Three Musketeers, Mars bars, Tootsie Pops and Snickers? During the recession period of 2008-09, Nestle reported a significant 10.9% of rise in their profits while Cadbury’s reported a whopping 30% growth.
Debt Settlement, Bankruptcy And Tax Related Services
During recession, the majority of consumers find it very difficult to manage their debts, such as mortgages, car loans and payday loans. They look for affordable debt relief solutions. That is the reason why debt consolidation and settlement industry also flourishes during such times. More people get bankrupt during recession and they need help from legal experts to handle such situations.
Therefore, organizations that offer bankruptcy related services also do good business . Likewise, IRS also does not sit idle during economic crisis; people have to pay their taxes, and in order to save money, they do not mind hiring tax experts for help. As you can see, recession does not affect everything and everybody. The above mentioned recession-proof businesses never fail provided you have done the basics right.