If thereโs one thing weโve learned as a result of the Covid-19 pandemic, itโs that we have no idea what the future holds. Life as we know it has changed a lot since the start of 2020, in ways that we never saw coming.
Not only did our daily lives change drastically, but the stock market and the economy have also been very bumpy. This volatility is a major concern for business owners who donโt want to see their businesses damaged or ruined by circumstances they canโt control.
To avoid this outcome, one option is to start a recession proof business.
Why Start a Recession Proof Business?
If the unpredictability of business ownership concerns you, a recession proof business could be the right choice. Economic changes and fluctuations impact some types of businesses more than others.
Itโs possible to build a business that wonโt be crushed by recessions or economic downturns, but you have to know the types of businesses that can survive in those economic climates.
One common myth is that recession proof businesses canโt or wonโt succeed in a strong economy. But recession proof businesses can be profitable when the economy is strong.
Alternatively, maybe you feel there is a recession ahead, and you’re looking for a business idea that will not only survive but thrive during uncertain times, which we’ll also cover.
What Makes a Business Recession Proof?
While there are many different types of businesses capable of surviving an economic downturn, here are a few common characteristics of recession proof businesses:
- They provide essential services. Consumers typically cut back on spending during a recession, but they have to continue spending money on essential services like healthcare.
- They sell consumer staples. People need to buy certain products regardless of the economy. They may cut back on luxury or discretionary spending, but they still need to pay for the essentials.
- They offer low-cost alternatives. Many people look for ways to save money or for lower-cost alternatives when finances are tight. If you sell a product or offer a service that can help them save money, they may turn to you during a recession.
Recession Proof Businesses: 10 Good Ideas
Below is a list of specific types of businesses that are capable of surviving and even thriving during a recession.
#1. Overseas Outsourcing
Remote work is more common and practical than itโs ever been, and many types of businesses are able to hire overseas workers to save money.
The idea here is to build your business using talent that costs less than youโd pay for an equally qualified American employee, and use the lower overhead costs to offer customers or clients a better price without sacrificing quality.
Why itโs recession proof: When a recession hits, businesses look to cut costs in any way possible. Theyโre more likely to choose a service provider based on price when minimizing expenses is a priority. By outsourcing the work to overseas talent, youโll be able to offer the best price to your customers.
Saving money by outsourcing work overseas doesnโt mean you have to offer a low quality service. There are plenty of highly skilled workers in other countries, but it does take some effort to find the right ones.
How to get started: Before you start, youโll need to understand the laws and regulations related to hiring international employees or contractors. Hiring contractors is the easier option, but it may not be right for your business. How to Employ and Pay Remote Employees Around the World is an insightful article from Remotive that serves as an excellent primer on the subject.
#2. Cost-Reduction Consulting
A cost reduction consultant is hired by businesses to find ways to lower expenses without damaging the operations of the business. According to Consultport, a company that helps to match consultants and businesses, cost reduction consultants โskillfully cut costs in a strategic manner that doesnโt impair business operations or productivity. They define and implement sustainable actions that effectively reduce expenditures towards increasing savings.โ
Many cost reduction consultants specialize in a specific industry like manufacturing or retail. Some charge an hourly rate and others bill a percentage of the amount saved.
Why itโs recession proof: A cost reduction consulting business can thrive in any economic condition. Businesses are always interested in saving money in order to increase profitability, and thatโs especially true during a recession when the business may be struggling to stay in the black.
If you opt to bill a percentage of the amount saved for your clients with no other fees, thereโs zero risk for clients to hire you and it will be easier to secure business.
How to get started: Entrepreneur has the following advice for anyone looking to start this type of business:
โPotential clients will largely be small-to-midsize businesses, but you can also target your marketing efforts toward professionals, nonprofit associations and privately-run institutions […]. Get started by developing an expense reduction manual. The manual should be representative of the type of business or industry you’ll target and include an index of categories you’ll analyze, such as business location, employees and communications. The purpose of the manual is to act as a road map to guide you through each client’s business. You can then tailor the manual to a specific client’s business and enter subcategories for each business component that you analyze.โ
Related: Learn how to use AI in your consulting business in our guide to making money with ChatGPT.
#3. Selling Used Items
There are a few different business models that involve selling used items. You could purchase items at yard sales, flea markets and auctions and resell them online for a profit. You could also open a consignment store in your local area.
Why itโs recession proof: During a recession, many people look to save money in any way possible. One of the best ways to cut expenses is to buy used instead of new, so a recession leads to increased demand for lower-cost used items.
If youโre running a consignment shop you can also offer people the opportunity to make some money by selling things they no longer use, which is of more interest to people when money is tight.
How to get started: The easiest and lowest-risk way to get started is by selling online. You wonโt need to pay rent for a storefront and the start-up costs can be very low. Look for items at yard sales, flea markets, auctions, estate sales and thrift stores that you can resell online. Facebook Marketplace, eBay and sites like Craigslist are ideal for reselling the items you buy.
One option is to specialize in a particular type of product.
If youโre taking a specialized approach, you may have more success buying underpriced items online since itโs more challenging to find specific types of items locally. In addition to selling on platforms like eBay, you could also start your own website with the intent of growing the business for the long-term.
If you’re not sure what products to focus on, check out our list of the best things to sell online for ideas.
#4. Childcare
Childcare is a necessity for many families. You could offer childcare services on a small scale out of your house by taking care of a few children, or you could rent or buy a facility and look to build a larger business.
Why itโs recession proof: Working parents need childcare, regardless of economic conditions. Itโs an expense that canโt be cut from most household budgets. Additionally, the demand for childcare may increase during a recession as some single-income families become dual-income families out of necessity.
How to get started: The first step is to familiarize yourself with the laws and regulations for childcare service providers in your area. Contact your stateโs Department of Children and Family Services (DCFS) to get details about licensing requirements and other applicable regulations. In most cases, youโll also need a current CPR certification.
Starting with a home-based daycare is the best option for keeping risk and startup costs as low as possible. For a step-by-step guide, see The Ultimate Guide to Starting a Daycare Business from FreshBooks.
#5. Healthcare Services
Healthcare services are always needed and there are several different types of businesses you can start, including:
- Home health care
- Massage therapist
- Medical mobile screening
- Nutritionist or dietician
- Physical/occupational therapy
- Wellness coach
Why itโs recession proof: Health issues donโt stop during a recession. In many cases, medical expenses are necessary and unavoidable, so a healthcare service business can survive in any economic climate.
How to get started: The details can vary significantly depending on the type of business you choose. Most types of healthcare businesses will require you to be licensed or certified if youโre the one performing the service.
However, there are a couple of options if youโre not licensed:
- You can use a medical staffing agency to hire workers with the appropriate licenses.
- You can choose a business that allows you to get licensed quickly. For example, you can get training and a license to work as a massage therapist faster than you can become a Registered Nurse.
By hiring licensed workers to provide the services, you can focus on managing and growing the business. This will require more startup capital compared to providing the services yourself, but it can be difficult to work on growing a healthcare business when youโre also the one performing the services.
Quickbooks has an excellent and detailed article on the topic: Complete Guide on How to Start a Healthcare Business.
#6. Senior Services
Senior citizens (and their families) face the difficult decision of staying in their own home or moving to a facility that provides a more specialized level of care. Many seniors prefer to stay in their own home because they donโt want to give up their freedom, or because nursing care is expensive.
As a caregiver, you can offer services that assist seniors so theyโre able to stay in their own home.
Your services might include things like:
- Assisting with personal care like bathing or dressing
- Cleaning or organizing the home
- Cooking or meals
- Gardening or lawn care
- Grocery shopping
- Help with pets
- Providing rides to appointments
Why itโs recession proof: Senior citizens need care regardless of the economy. During a recession, seniors may be hesitant to move into a costly facility, which means theyโll need services that help them stay in their own home longer.
How to get started: Most states do not have licensing requirements for non-medical senior care services. Be sure to check with your state or city to see if licensing is required before getting started.
Assuming that you donโt need to get licensed in your area, you can start looking for your first client. Word of mouth is the best way to advertise, since clients will prefer to hire someone they know or someone whoโs been recommended to them. Talk to your family, friends, neighbors, coworkers and other acquaintances and let them know about the services youโre offering.
When youโre getting started, itโs helpful if you can take a broad approach and offer a wide variety of services for seniors. Almost everyone has a senior in their life, so finding your first client through your existing network should be a realistic goal.
#7. Professional Training and Services
Helping people make money is a business model that can work regardless of the economic conditions. There are many different ways to start a business providing some sort of professional training or assistance, including:
- Coaching on consulting
- Online courses
- Resume writing
- Test prep
You may have some experience and expertise you could use to start a training-oriented business.
Why itโs recession proof: Unemployment typically increases during a recession. More people will be looking for jobs or for ways to make money, and you can provide the training they need.
Not all of your customers or clients will be people who lost jobs. Others may be looking for ways to improve their skills and advance their careers. Maybe theyโre interested in changing jobs and theyโre looking for ways to make themselves more valuable due to the increased competition for jobs.
How to get started: One of the fastest and cheapest ways to get started is to create an online course. Platforms like Teachable and Kajabi make it easy for anyone to create and sell an online course with minimal startup expenses.
Consider your strongest skills, experience from current or past jobs or hobbies, and think about the type of course you could create that would provide training to others.
Once your course is created, itโs time to start selling. With an affiliate program (a feature offered by both Teachable and Kajabi) you can allow bloggers, website owners and influencers to promote your course in exchange for a commission on any sales they generate for you.
When youโre just getting started, youโll need to reach out to potential affiliates, but if you have a strong offer for customers and youโre paying a decent percentage (usually 25% to 50% for courses) to affiliates, you should be able to recruit people who will send customers your way.
You can also use Facebook Ads, Pinterest Ads, Google Ads, or other online ad platforms to get exposure for your course.
See Kajabiโs article 9 Steps to Sell Courses Online.
#8. DIY/Money Saving Media Company
Starting a media company is more realistic today than ever before. Anyone can start a blog, podcast or YouTube channel and have the potential to reach millions of people. You could start your own business to help people find ways to save money.
Related: Here’s how much money YouTubers make.
Not only is this a business that could thrive during a recession, but itโs also a business that many people enjoy running.
Youโll get to explore your creativity, work on things you choose, and help other people at the same time. Plus, itโs flexible and can be done around your existing schedule, part-time or full-time.
All those factors make it one of our top side hustle ideas.
Why itโs recession proof: Frugal living tips are in demand all the time, but especially during a recession, when people need to cut back on expenses. Your blog, podcast or YouTube channel could help people by providing practical tips and guides to spend less and get more for their money.
How to get started: Blogs, podcasts and YouTube channels are all ways of sharing content with your audience. The first step is to decide if you want to create written, audio or video content. If you decide to start a blog or podcast, youโll want to get your own domain name and web hosting so youโll be in full control of your website and online real estate. See our article How to Start a Blog and Make Money for more details.
Youโll also need to think about the specific types of content youโll be producing and the topics youโll cover. You could opt to provide general money saving or frugal living tips, or you could take a more specialized or niche approach. For example, you could focus on inexpensive recipes and how to save money on groceries.
#9. Repair and Maintenance
It may not be the first type of business that comes to mind, but offering repair and maintenance services can be an ideal way to make money. There are plenty of items you could repair, but some of the common options include:
- Appliances
- Clothing and shoes
- Electronics and devices
- Furniture
- Homes, decks, sheds, etc.
- Small engines (lawnmowers, leaf blowers, etc.)
- Swimming pools
- Vehicles
Why itโs recession proof: Repair and maintenance services are always needed, but during a recession consumers look to keep items longer rather than buying new replacements. Itโs usually cheaper to repair than replace, so opting to fix or take care of existing items is an effective way to save money. Additionally, people may not even have the option of buying a new replacement, depending on their financial situation; opting for repair may be the only choice.
To make it even more recession proof, think about the items people are less likely to replace during a recession. For example, luxury handbags or shoes may be too expensive to replace when finances are tight, so consumers might be more likely to repair those items instead.
How to get started: What type of experience and skills do you have? Some types of repair could be learned relatively quickly, but others require more experience. If youโre good with engines, starting a business repairing lawnmowers and other small engines would be an ideal option. However, if you donโt have experience, opt for something that can be learned faster, like how to repair clothes and accessories.
If you already have the tools needed for your choice of repair services, you can be profitable as soon as you find your first customer. Post an ad for your services on Craigslist and youโre likely to start getting some business. You can continue to re-post the ad to keep it fresh so new customers will keep finding you. Other apps and websites like Thumbtack and Angi are also great for advertising your business.
In the long run, word of mouth is likely to be your best means of advertising, so be sure to take good care of your customers so they tell others about you.
#10. Confections
Did you know consumption of candy and sweets increases during a recession? Peter Liebhold, chairman of the Smithsonian Institutionโs Work and Industry Division, says that โcandy companies are relatively recession proof. During the Great Depression, candy companies stayed in business.โ
You could start a business making candy or confections, or open a store or online shop that sells them.
Why itโs recession proof: According to the New York Times, โFor many, sugar lifts spirits dragged low by the languishing economy. For others, candy also provides a nostalgic reminder of better times. And not insignificantly, it is relatively cheap.โ
Historically, candy companies have fared well during recessions. The Timesโ article mentioned above references thriving candy companies in the 1930s during the Great Depression.
How to get started: There are several ways you could get started, but the option with the lowest startup costs would be to sell online. Create your own e-commerce site with a platform like Shopify or WordPress/WooCommerce. Creating your own candy will give you much better profit margins and less direct competition since no one else will be selling exactly the same products as you.
You could also get started by selling locally. Market your confections through Facebook, Craigslist, as well as word-of-mouth.
Recession Proof Businesses: Final Thoughts
If youโd like to start a business but you also want to be sure it can stay afloat in any economic climate, itโs a good idea to look at business models that have been proven to be at least somewhat recession proof.
The business ideas covered here can help to reduce your risk as a business owner by giving you a better chance to survive or even thrive during a recession.
Donโt wait for a recession to start your business.
All of these businesses can generate a profit in good economic conditions as well. Plus, getting started now will give you the time needed to grow the business so itโs established when a recession comes around.
What to read next: Check out our list of hot new small business ideas.
