The global financial meltdown caused by the pandemic today has far been the worst yet since the 1930’s Great Depression. Safe to say, not a single soul on this planet is surely expecting to beat the only depression recorded in history. That would be unthinkable.
In retrospect, when a recession is officially declared, the economy has already been down for months. During such a critical period, companies are forced to retrench thereby causing people to lose jobs, businesses generate a significant decline in sales, and consumers’ expenditures are massively contracted.
If tough economic times continue to persist, it would be tremendously difficult to bounce back. This is particularly true for businesses that had taken zero-step preparations for such an event. Although we couldn’t blame them. After all, who could exactly predict the next recession? Maybe we all need to learn a lesson or two about proactivity and precautionary measures.
And to be honest, forging a career during this tough economic time is no easy feat either. It is rather frightening. As a consequence, the nation’s economic output is completely hampered by the downfall., Who or what else is bound to thrive at such a difficult time?
Ah, thankfully, recession-proof businesses will.
What is a recession-proof business?
Recession-proof businesses are the only industries to remain unscathed during such an economic crisis. They are ideally the industries that supply the basic needs of the people — either in service or product form. They will most likely thrive and resist the impacts of the crisis since consumers’ demands are perpetually directed to their trade despite being financially stressed.
More than a year now, the economic devastation is still mainly caused by the coronavirus—a health crisis that is causing deaths and recession around the globe up to the present. But even with this unfortunate event, it is never wrong to create opportunities and lean into the obstacles.
Take Disney for example. The company was founded alongside the Great Depression taking its place. In a time of deep despondency, the Disney brothers knew America needed to be cheered up once more. That opportunity led them to grow their business — successfully surpassing the challenges of the recession.
Hence, in this time of slump, every individual, business, and investor should reconsider and take refuge in the so-called recession-proof business.
Listed below, in no particular order, are the 9 best recession-proof businesses that can surmount this critical period.
1. Grocery and Food Stores
Unsurprisingly, the food industry remains to thrive in an economic downturn. Profits earned in groceries, food chains, and stores were fairly steady during a recession. The frozen meal and coffee sector is a good case in point. Frozen meal firms were able to expect a 4.8% increase in total sales. On the other hand, the retail coffee market grew by 6%, a substantial growth from what was initially forecasted as only 2%. No crisis of any kind will probably stop people from eating and drinking, not even an apocalypse.
That being said, this sector may still be susceptible to the effects of the recession. During the last recession, the food spending of each household decreased by 7% presumably because consumers were inclined to purchase sale and discounted items or will look into cheaper alternatives to cut back expenses. The reality, however, is that people can only cut food spending by so much.
Interestingly, the eating habits of consumers in times of crisis are triggered and increased. People tend to crave and eat more when stressed out – particularly with sweets and alcohol. Snickers and Mars bars, which are popular chocolate bars, came into existence during the Great Depression. And, the sales of Cadbury chocolates have reportedly surged by 30% along with McDonalds’ remarkable growth in business during the 2008 recession. Hence, the food industry is one of the top recession-proof businesses.
2. Accounting and Tax Services
How tempting it must be to skip those taxes! However, in recession or no recession, taxes have to be paid on time or suffer the consequences.
What could be far worse is for an individual or a business to attempt accounting themself, thinking that it will spare them some bucks. While it seems like a quick win, so much risk is at stake and wrong calculations might backfire and lead to further trouble down the line.
By this point, resources should have already been protected, not lead to possible harm. The safe decision to make, especially during tough times, is to entrust a qualified accountant to deliver the job while you focus and target revenues.
Accounting firms are another sector in the business world that proves to thrive during recessions. It is especially timely during recession periods for businesses to have a good accounting and bookkeeping system in place.
In times of negative economic growth, a business’ first impulse will be to cut down costs and keep its finances in check. The truth is, many will need an accounting consultancy when cash flow is tightened. When a business is suffering, an accountant’s expertise is crucial to take a look at expenses, manage available resources left and suggest sound bits of advice on how to alleviate financial struggles.
Unfortunately, most business owners are in the dark when it comes to taxes. Accounting assistance will have an understanding of where these tax benefits can be an advantage. More importantly, these professionals will help an individual navigate and comprehend the recent changes of requirements for businesses brought about by the COVID-19 pandemic. Therefore, it is important to depend on accounting support when an economic recession hits.
3. Financial Advisors
Recently, have you noticed why more and more financial advisors are coming out of the shadows? The simplest reason why is because they are in the business that people will need once the market declines. To put it bluntly, their work was made for this economical storm.
Much like business owners, investors, and individuals who possess a considerable worth of investments and substantial assets wish to secure their wealth and confirm that they are well taken care of during the worst times.
With an economic downfall, it is only natural for us to be concerned and defensive with our resources. It is usually at this point that financial advisors rise in advancement with their profession in demand. Their sound advice will enlighten investors as to what type of investment accounts to choose.
4. Information Technology
In this modern world of technological advancements, I.T. careers are undeniably the profession high in demand and most definitely, recession-proof. Its main work drives innovation leading to a business’ success. As a matter of fact, the current recession is one of the reasons for high traffic online thereby leading to an increase in sales.
Nowadays, the business world in every department relies on information technology to optimize their work system and strategy. Without information technology, a business ceases to operate. During this pandemic, the I.T. Industry demonstrates a lot of potential for businesses now that the work from home experience is fully embraced. More offices now are allowing their employees to work offsite.
In another instance, Close is an internal dialer software created to foster utmost growth and productivity in every sales team. With this creation, a business can stay ahead of their competitors by introducing predictive dialers to their business and thereby generating more sales. The website has been running since 2013 and continually growing up to the present. This is a great example of how the modernization of Information Technology greatly contributes to the business world.
Furthermore, Information Technology is one of the important elements today that led to the growth of international trade and market. Businesses that leverage Information technology and invest on related assets get closer to the international market thereby potentially increasing sales despite a recession.
We will even go as far as to say that every type of industry today will need to incorporate information technology to enhance productivity. Their service is proven to be valuable for offices. The future is just bleak to businesses that refuse to adapt to technological advancements. Indeed, there are substantial reasons why I.T. is considered the fastest growing industry in the world. Their services are needed today and will be needed for a long time.
5. Telecommunications
Alongside Information Technology, the Telecom industry is here to stay, no matter what the economy is like. If anything, the repercussions of the Coronavirus crisis only proved the relevance of this industry today.
People need their phones, among other means, to communicate online. This made the industry intimately linked with the global economy. Because consumers are now globally interconnected, people have taken interest in learning how to speak naturally the native language of their clients. Furthermore, with the innovation of the telecom industry, online industries have also flourished alongside it.
The online industry has given a lot of people an opportunity to earn money from their homes and learn new things without the need to go outside. It is also because of this industry that people can sell things online.
On top of that, the pandemic outbreak led universities to follow the same path. Telecommunication suddenly became a requirement in educational institutions alongside the instantaneous rise of study materials ever since social distancing was implemented.
Although some consumers may have downgraded with their units, sales in telecommunication continually thrive, considerably proving them to be one of the top recession-proof businesses. The industry had already proven its efficacy even before the pandemic began and it will likely play an important role in the global crisis today.
6. Healthcare Services and Providers
Every now and then, someone will get sick. Even when finances are tight, if people are unwell, they will always seek a medical professional. This is why the healthcare industry can be said to be recession-proof because of its price inelasticity.
Clinical institutions and medical careers are one of the few sectors that remain unaffected during a recession. It is unlikely for this business to cut back losses and retrench in bad economic times.
By way of illustration, the Occupational Employment Statistics (OES) had surveyed nursing employment in the United States during the Great Recession. Focusing on the recessionary years, between 2007 to 2010, the survey concluded that while there was a national employment decline of about 7,257,090 million jobs lost, the nursing employment moved differently with an increase of 7.6% from the same period.
Healthcare and food (mentioned above) are among those essential industries that can perform well in recessions. We even have witnessed today the public health response to the COVID-19 outbreak and how healthcare providers demonstrate an important role during unparalleled financial chaos.
That said, we have also witnessed that because of the specific circumstances and emergencies brought by the pandemic, some sectors in the medical industry like surgeries were forced to shut down and unable to thrive compared to previous recessions. Furthermore, we truly salute our COVID-19 front-liners who are braving themselves to fight the virus today in such a difficult time.
7. Auto Maintenance and Utility Services
Companies that focus on utility, repair, and maintenance will likely stay unharmed and thrive during recessions. As it happens, people are even swinging back to DIY crafts and repairing things on their own. However, some repairs are just beyond our control. This is how the service business comes in handy.
As time passes, things will eventually break down. For automobiles, the so-called wear and tear items will need proper care. For utilities, a leak in water pipes will need to be inspected by plumbers. The services offered by these handymen remain unscathed during critical uncertainties. This is also true for businesses catering to the tools and materials needed for home or car improvement.
Furthermore, with the current pandemic and new positive cases continually rising across the globe, coronavirus cleaning and disinfection services are taking the spotlight as they become useful to businesses and homes affected by the outbreak.
During a time of widespread uncertainty, coupled with the new normal taking in, the utility services stayed afloat and continued their operations alongside new cleaning-related businesses coming in. Why so, you may ask. The simple reason behind this phenomenon is that such service is already deemed essential by the masses especially amid today’s global health crisis.
Additionally, with the rise of work from home set-up taking place in our shelter, it is unlikely for the utility industry to wane so soon. Besides, for businesses to reassure cleanliness and avoid scrutiny with health violations, they will need to hire cleaning services. This industry is therefore in it for the long run due to post-pandemic repercussions.
Bottom line: Everyone seems to have a heightened focus and concern on hygiene all due to the pandemic. Consequently, this meant a surge in demand for cleaning equipment and commercial cleaning services. The cleaning boom is certainly one of the few businesses that flourished in this COVID age.
8. Children’s Goods and Dating Industry
A baby’s necessities such as diapers, milk, and bottles, among others, are almost entirely recession-proof. When you are raising a child, you need to provide for your kid regardless of the economical situation. It is for this reason that businesses on baby and childcare products can withstand a recession and rarely crumble.
Nowadays, parents are forced to keep their children in their homes for health security. Times have changed and most of the parents are on their own to teach and entertain their kids. Consequently, these effects from the pandemic skyrocketed the number of purchases for children’s books, games, and crafts, among others.
For reasons both practical and emotional, even children’s toys and clothes are recession-resistant. In March of last year, the total sales of children’s toys in the United States significantly grew by 27%. Parents cannot simply ignore the fact that their toddlers grow up fast, hence needing bigger clothes and shoes. And, well, a toy is merely a “want” but parents will need it to pacify their kids.
Parents, naturally being the loving kind people that they are, would rather cut back expenses on other areas than sacrifice their children’s needs.
Furthermore, due to long-term lockdowns and community quarantine, another repercussion brought about by the COVID-19 pandemic today is disrupted family planning leading to unplanned pregnancies. As a result, childcare products cannot be simply overlooked when setting up for a recession-proof business.
That said, family planning is still crucial and should therefore be observed. When family planning is mentioned, people presumably take it as counter-information of no sex. Family planning is only encouraging birth control. Couples can still be intimate and be playful with lingerie and whatnots but with precaution.
9. Courier Services
Rain, shine, or recession – packages are delivered!
This is what distinguishes courier services from other businesses. With the boom of E-commerce during this pandemic period, the freight and logistics companies are well-positioned and undeterred in the international market today.
The same with the maintenance and utility services, industries offering delivery services are staying afloat during recessions. In today’s crisis, the social distancing implemented across the globe impacted the freight industry positively. Even simple errands like grocery shopping are now offered by delivery companies like the Grab App, one of Southeast Asia’s leading mobile apps providing mobility to consumers. Of course, this implies that the industry has to adapt to the changes brought about by the pandemic.
That said, the industry has diversified enough to greatly benefit and earn profit from purchases done through online transactions. In addition to this, shipping giants can save millions as they capitalize on fuel, a commodity that usually drops in price during an economic downturn.
No matter what economic situation we are in, the courier services will continually prosper given that consumers are bound to send packages now and then, either for personal matters or business-related. Being able to function and offer that unique kind of assistance to the consumers’ needs makes them less vulnerable to recessions. Besides, targeting both the Business-to-Customer (BTC) and Business-to-business (BTB) markets deserves them a spot among the top recession-proof businesses.
Support Your Business In A Recession
An economic downturn is an unavoidable event but its unfavorable effects on our businesses can be mitigated. If you are devastatingly encountering a drop in sales, your business needs to be strategic – both in finances and marketing.
The important thing to remember during an economic downturn is not to panic but instead, plan effectively on how to bounce back. Marketing your business affordably might just strengthen it back. Actively strategizing smart decisions (a.k.a. Digital Marketing) to support your business might be your easiest ticket out of this unforeseen event.
With that said, businesses need to refocus on their core competence now more than ever. What are the bestseller products that they have? What services are more often demanded? Concentrate now on your businesses’ core products or services because it is where you can generate more revenue.
Enhance the marketing tactics of your recession-proof business further today with digital marketing and enjoy the benefits of potentially reaching wider prospect clients. Some of the best online digital marketing certificate programs are readily available for you.
Customers Are Priority
Alongside strengthening your business, it is equally imperative to deliver quality customer service. Prioritizing your customers is about providing what the customers want and when they want it. If you can maintain and deliver effective customer service, you will probably retain existing customers while gaining more.
Make them feel seen and keep your business interactive. This will help your market grow. Remember, the more people you reach means more cash flow. Deliver this equation so that your business can withstand the economic slump.
Nowadays, with relevant and effective marketing strategies standing by, the internet has created countless ways for you to drive traffic into your recession-proof business and thereby, hopefully, increasing cash flow. All you have to do is make use of these tools to innovate and develop as a whole.
Conclusion
While recessions often spell troubled times for most of us, they are not permanent. Certainly, not all businesses are instantly doomed when it strikes. At least not if we support and protect it with all our might. And, more often than not, lost jobs may just be blessings in disguise to another opportunity.
Several new businesses have already been created and established particularly during recessions because many clever people were quick to adapt to the structural change of the economy. But, more importantly, every recession is different. The key factor is considering the volume of demand by the consumers and such industry will thrive and cope throughout the decline. The companies who were able to support and specialize in remote services have seen a boom and will probably perform well afterward.
Finally, you now have a good place to start with what might work for you. While we all considerably feel despondent at this time, it is very possible to get back on our feet and once again rebuild that recession-proof career or business.