With global financial uncertainty, post-pandemic inflation, an escalation in armed conflicts around the world, and fears of a possible recession on the horizon, it’s a tough time for aspiring business owners.
Though the US economy has been holding strong compared with Europe, China, or Japan, many people still struggle to make a living or are forced to work in more than one job to make ends meet.
But economic history has proven that some businesses continue to thrive during hard financial times. These are recession-proof and, even when the economy tanks, they survive and remain profitable. The most common are health care and utilities, but few of us can enter those markets.
Others, such as food supplies, appliance repair, and beauty services, are more obtainable. And there are new recession-proof business ideas born from the pandemic and e-commerce sector.
The good news is even when the going gets tough, the smart can get going and start their own small business.
Below, in no particular order, are 16 recession-proof business ideas that prosper during economic change.
I read a lot of posts on recession-proof business ideas, and many of them include:
They’re all excellent recession-proof business ideas. The problem is only a tiny percentage of the U.S. workforce can do them without further education. In contrast, I believe anyone could start one of the business ideas below. And with that bold statement, let’s begin.
Although most of us make financial sacrifices during a recession, spending on children isn’t usually one of them. Commerce history tells us that children’s goods and baby products always sell despite the harshest economic downturns.
Michael Rosenberg, a Manhattan high-end clothing retailer, proved this during the Great Recession of 2008. He noticed that while adult garments weren’t selling, children’s clothes sales remained steady, so he switched his stock to newborn and young children.
As Michael said, “I always listen to my customers, and what I’d hear from mothers and grandmothers was, ‘How can you not spend on a baby?’”
He also began selling swaddling blankets, birth clothes, and first toys. He later expanded into prenatal clothes and christening gowns. Dresses from 6 months to 8 years were his biggest seller.
A customer of Michaels, writer and publicist Lee Anne McDonald, summed it up perfectly: “You must remember a little girl on her birthday; and the little boy who’s truck crazy. It’s the idea of hope. They’re our future.”
Michael saw an increase in sales from $40,000 per month to over $50,000 by tapping into our maternal instincts.
Yes, I’m serious. It’s an $11 billion-a-year industry. I’m not suggesting you start a funeral home or sell coffins; urns are this recession-proof business idea.
Industry reports show cremations have risen 20% annually since the pandemic began nationwide. And the Cremation Association of North America predicts that by 2030, 80% of all U.S. deaths will end in cremation.
The reason is that a standard traditional funeral costs around $7,000 while cremations average $1,000 to $3,000.
The recession-proof business opportunity here is that funeral homes report clients are not buying their expensive urns but cheaper online alternatives, and when the recession hits, it could be a great little urner (punny, huh?)!
Now a recession-proof business idea you could clean up with:
Recession or no recession, commercial buildings and residential properties still need cleaning.
Commercial cleaners have been in high demand since the pandemic because retail spaces and businesses that provide a public service must maintain a strict level of cleanliness.
However, residential cleaning is often more accessible, as you don’t need specific equipment or training. Essential services like window cleaning, carpet cleaning, gutter cleaning, pressure washing, and garden care are always in need.
The key is choosing clients that are also recession-proof as your target audience, so your cleaning business thrives during a recession.
The next recession-proof business idea suits anyone who craves geographical freedom:
Virtual assistants are self-employed freelancers who provide professional services like administrative, creative, or technical help to entrepreneurs, small businesses, and corporations from a home office.
The demand for virtual assistants (VAs) often increases during a recession as businesses cut costs by reducing full-time employment, making it a recession-proof industry.
And there are also some excellent VA perks, such as flexible working hours, multiple clients, and geographical freedom.
Statistics show that the beauty business is recession-proof. For example, it grew during the pandemic from $483 billion in 2020 to $511 billion in 2021, and forecasts predict it to exceed $784.6 billion by 2027.
The beauty business’s enduring attraction during recessions isn’t because of vanity; it’s the lipstick effect and a changing target audience.
The lipstick effect is the theory that when times are hard, we cheer ourselves up with small indulgences, like quality lipstick. But there’s more to the beauty business than lipstick.
For instance, American women spend an annual average of $3,756 on beauty products and services (Groupon). With American men not too far behind them at $2,928 per year.
The men’s personal care market is booming (a new target market) and is forecasted to hit $276.9 billion before 2030 (Allied Market Research). And you don’t need to be L’Oréal or sell products to take advantage of this recession-proof business idea; you could provide one of the following services:
Eyebrows: Regardless of the economy, eyebrows and lashes need regular care; the extension lash industry alone was worth $1.36 billion in 2020 and is predicted to almost double in value by 2028.
Nails: Manicures are quick, inexpensive luxuries, and their popularity never diminishes during a recession.
Hairdressing: Recession or no recession, a haircut is one of the last expenditures we sacrifice to save money.
Appliance repair involves fixing and maintaining things like laundry machines, dishwashers, ovens, fridges, and freezers.
During recessions, people often repair old appliances rather than buy new ones, making appliance repair and service a recession-proof business idea. And once you can fix a range of household appliances, every neighborhood is a business opportunity.
An appliance repair business is an affordable way to enter the lucrative home improvement market; however, the following small business idea makes you indispensable to it!
Service plumbing is a constant business source since every house has a toilet, sink, and shower. And it’s a must-need business because plumbing emergencies can’t wait until the economy improves.
It’s also a business that brings instant satisfaction to the client and you get paid on completion.
And the economic state has little effect on it compared to general construction, making it a multibillion-dollar industry and an excellent recession-proof business idea.
I’m installing solar and AC in the old townhouse I’m renovating, and I’m not alone. Due to recent heatwaves, almost 90% of American homes use AC.
Source: US Energy Information Administration (EIA).
Heating, ventilation, and air conditioning (HVAC) repair or supply are 2 of the best recession-proof business ideas because:
And with global energy prices soaring and the next great recession looming, now could be the perfect time to start an HVAC repair or supply business.
Service industry aside, the following 3 recession proof business ideas are ones we can’t live without:
Most of us enjoy dining out but that’s often the first luxury on the chopping block when a recession hits as people turn to home cooking to reduce expenditure. And when home cooking increases, so does the need for local grocery and low-cost food stores.
For example, during the great recession and recent pandemic, restaurants and cafes lost a lot of business. Still, local grocery stores only saw a slight dip in sales, falling 1.3% from 2006 to 2009, and low-cost food stores flourished.
Source: fermentationassociation.org
Why do local grocery stores prosper during a recession? Most people know that buying ingredients, not products, saves money. And local and seasonal shopping reduces food costs and promotes a healthy diet.
Why low-cost food stores prosper during a recession: A recent Sacred Heart University study found that we eat fewer healthy options during a recession as people turn to high sugar and fatty alternatives for comfort.
Next up is a recession-proof business idea that over 1 third of the U.S. population consumes:
Some countries like Italy and France turn their nose to frozen food, but not America—we love it.
In 2020, Statista research of the U.S. Census data and Simmons National Consumer Survey (NHCS) showed that 127.92 million Americans eat frozen dinners. This figure is due to rise to 130.55 million by 2024.
And 2020 IBISWorld industry statistics show that the industry is worth $40.8 billion, with a 7.8% increase by 2023.
And it’s recession-proof. During the great recession, sales in 2008 rose by 6.5% to $51.8 billion, rising a further 3.1% the following year. Frozen food sales also grew by 21% during the pandemic, showing that as our income decreases, our consumption of frozen food increases.
Source: www.eater.com
In case you’re wondering what frozen food sells best, statistics show that frozen novelties like desserts or juice bars are the most popular, with sales of $1.6 billion per year.
During the Great Recession, people didn’t stop drinking coffee, but how they drank it changed. In-home coffee consumption rose in line with the economic downturn, with gourmet coffee becoming the preferred choice.
Instant gourmet coffee grew from 2008 to 2011, with consumption rising to around 40% of total coffee purchases and 60% by 2020, as people ditched their $5 lattes for a cheaper alternative.
Companies and Markets.com research also found that young consumers drove the increase in gourmet instant coffee.
The lesson here is that when heading into an economic downturn, there’s an opportunity to start a recession-proof gourmet instant coffee brand marketed toward the younger demographic.
Resource: Vending times
Number 11 on our recession-proof business ideas is one of my favorites, and while it was slow to catch on in the U.S., the wheels of industry sure are turning now!
I’ve been living in Italy for the past several years and almost everyone I know (and don’t know) seems to ride an e-bike. And it isn’t just road bikes for shopping; electric mountain bikes are also popular with older fitness enthusiasts.
During the pandemic, the rest of the world caught on to the e-bike craze; now, they’re everywhere and people of all ages use them. Research firm NPD Group shows sales rose by 145% from 2019 to 2020.
But what about now?
In 2019, the e-bike market value was $40,312 million, but projections predict that by 2030 sales will reach $118,675 million. That’s a lot of e-bikes.
Why e-bikes sales could boom during a pandemic: When a recession hits, we look for ways to reduce expenditure, and as with HVAC products, ditching the car for an e-bike e-bikes saves on fuel and parking costs.
Many new terminologies came about during the pandemic, one being ‘staycations’ which meant a boom in camping gear sales.
As indoor venues closed and foreign holidays became a distant memory, the outdoor industry saw huge sales as people turned to the only alternative: The great outdoors.
But as with any panic-driven craze driven by unprecedented circumstances, the jury was out on whether we’d continue hitting the trail.
Turns out we fell in love with nature again.
A 2022 summer report by NPD Group shows a 19% sales increase in both online and brick-and-mortar stores from March 2021 to March 2022, which was on top of the enormous sales the prior year.
And it’s not just increasing sales; prices are also going up with a 5.6% growth.
Here’s a list of the bestselling outdoor gear in order of percentage sold:
The lesson here is when times get tough, people return to their roots, which makes an outdoor gear retail store an excellent recession-proof business idea.
Some folks see number 13 as unlucky, but the next could be a solid investment for a recession-proof business idea.
Recessions often mean falling property prices, making it an excellent time to invest in real estate, especially rental property.
Prolonged economic downturns can also lead to stagflation (when inflation and unemployment rise together), and real estate prices keep in line with consumer prices. And that makes real estate and rentals an inflation-proof business idea.
The key to buying to rent is ensuring you can afford a second property without a significant, high-interest loan and purchasing in an area that’ll stay rent-desirable throughout a recession.
Best areas to buy rental properties include:
Rental properties are a great way to earn a constant income during a recession. Still, they don’t come maintenance or trouble-free. And that’s why the next recession-proof business idea often thrives alongside them.
A recession often leads to high inflation, job insecurity, and higher interest rates, making it harder for us to secure loans. Resulting in a drop in housing sales as people choose rentals to avoid expensive mortgages, resulting in growth throughout the private rental sector.
An economic downturn provides an exciting business opportunity because as rental property demand rises, so does the need for maintaining them, making property management another recession-proof business idea.
And all you need to start a property management/handyman business are some maintenance skills, a work vehicle, tools, a business license/permit, and a marketing strategy.
Our last recession-proof business idea is one the previous 14 may very well need to succeed and it’s always in demand:
Digital marketing is how brands connect online with their target audiences with the intent to turn them into customers.
Forms of digital marketing include social media, website advertising, email marketing, content marketing (such as writers), mobile marketing, including text and multimedia messaging, affiliate marketing, and marketing analytics.
Digital marketing is here to stay. As more businesses move online, the forecast is for continuous growth regardless of the economy.
A recent University of Pennsylvania study states: “Research shows that companies that consistently advertise even during recessions perform better in the long run.”
Making a career in digital marketing is a sound recession-proof business investment.
Starting any recession-proof business idea takes time and there are specific steps you must take before you can start doing business. But the quicker you begin, the longer you can take advantage of any coming recession.
Statistics show that the average U.S. recession lasts 10 months with a recovery time of 2.5 months for every year of the boom preceding it.
And that’s great news as we’ve just had the longest period of economic expansion on record, 128 months from 2009 to 2020. This gives you ample time to start your business and reap the rewards for years.
This portion of our website is for informational purposes only. Tailor Brands is not a law firm, and none of the information on this website constitutes or is intended to convey legal advice. All statements, opinions, recommendations, and conclusions are solely the expression of the author and provided on an as-is basis. Accordingly, Tailor Brands is not responsible for the information and/or its accuracy or completeness.
Terry is a serial entrepreneur with over 25 years of experience building businesses across multiple industries – construction, real estate, e-commerce, hotelier, and now digital media. When not working, Terry likes to kick back and relax with family, explore Taoism’s mysteries, or savor the taste of fine Italian red wine.
Products
Resources
@2024 Copyright Tailor Brands