Entrepreneurs choosing new ventures should consider these five industries fellow business owners consider recession-proof.
If you have experience in accounting, a bookkeeping business is an excellent idea during a recession.
According to Alex Smith, the CEO, and recruiting manager of an e-commerce company that sells customized bobbleheads, businesses that are serious about staying afloat rely on experts to manage their money instead of trying to do it themselves in-house. “Businesses want to have less anxiety and stress during tax season and want to be sure they are accounting for every dime,” he says. “You may offer that service to them and create a solid clientele that will stick with you through any economic downturn.”
2. Cleaning services
Smith also named industrial cleaning services as recession-proof, especially in light of the pandemic downturn, when cleaning took on new urgency. “The importance of maintaining a clean, healthy workplace has increased significantly, and larger businesses that are unaffected by the recession might be more ready to pay for cleaning services,” Smith says. “Clients may also include smaller companies who strive to offer a healthy work environment to their customers and staff.”
Residential cleaning businesses are also fairly recession-proof. Mike Walsh, the CEO of CloudMyBiz, which offers cloud-based solutions for businesses, says that cleaning is an essential service. “Senior citizens always require care regardless of the economic situation,” he said. “Caring or cleaning for those unable to do it themselves will always be needed, so create a business that offers those services.”
While inflation means rising prices, people will still need to pay for necessities and affordable luxuries like clothes and home goods. Alexandra Fennell, the co-founder and co-CEO of an eco-friendly women’s wellness company, suggests consignment stores, whether brick-and-mortar or online.
“The competitive prices on unique items will attract customers even during economic downturns,” Fennel says. “What’s more, consignment shop owners can directly implement consumer feedback and look for goods their audience wants, guaranteeing revenue.”
4. Business service freelancing
Freelancing, or being an independent contractor, is a solid option for recession-proof work. Steve Wilson, financial expert and founder of Bankdash, a financial review website, says, “By contracting with independent contractors for certain jobs and activities, businesses can save a lot of money. Instead of hiring permanent staff, this enables them to pay for those duties separately as and when they are required.”
Wilson says that virtual assistants are in high demand, since businesses may not need or be able to afford full-time assistants but still have tasks that need to be completed. A freelance virtual assistant can work for several different clients and fulfill their part-time assistant needs. Freelance writers are also needed for businesses, especially for marketing copy. Wilson says, “Being a writer can conjure up ideas of someone writing editorials for the New York Times or the contents page of a book, but it has more to do with producing material for all the business websites that require consistent new content to stay relevant and raise their search engine rating.”
5. Property management
According to Doug Greene, the owner of Signature Properties, in times of economic crisis, people still need three basics — food, health care, and housing. In order to choose a recession-proof business, prospective business owners should focus on these essential services.
“In real estate, this could be starting a property management company,” Greene says. “You get all the benefits of rising valuations/rents without the risk of actually owning the property.”
Greene says, “If you opt to manage short-term rentals, you could pull in 20-25% of the revenue the owner is earning, and all you have to do is manage the house. That’s a business model with low overhead that could easily scale. Starting this kind of business during a recession is optimal because you can decide what kinds of properties you want to manage, name your price, and you don’t need to invest in property or equipment.”
While a recession is a daunting prospect, starting a recession-proof business may be the solution to tightening margins and declining sales as consumers cut back on their spending.