As the COVID-19 pandemic continues ravaging the global economy, many people wonder what types of businesses are best suited to weather an economic downturn.
While no business is 100% recession-proof, some are better equipped to handle a downturn than others. Here are 9 of the best recession-proof businesses to start in 2022:
- Home Improvement
Home improvement is usually one of the first industries to rebound after a recession. This is because people are generally more likely to invest in their homes during tough economic times, as it provides a sense of stability and security.
Healthcare is another relatively recession-proof industry. This is because people will always need healthcare, regardless of the state of the economy. Besides, with the integration of technological tools, healthcare sectors can thrive much better than in the older days. For instance, the power of a rostering app (like the kind available with ShiftCare) tends to demonstrate that they are a great communication tool.
Education is another essential service that people will always need. Even during tough economic times, people still want to better themselves and invest in their future.
- Food and Beverage
People will always need to eat, so businesses in the food and beverage industry are generally pretty recession-proof. This is especially true if you offer affordable, fast food or home delivery services.
Technology is another industry that tends to do well during economic downturns. People increasingly rely on technology to work from home, stay connected with loved ones, and entertain themselves.
- Cleaning and Maintenance
Cleaning and maintenance services are always in demand, as people usually need help keeping their homes and offices clean. This is a great industry to enter if you’re looking for a recession-proof business.
- Personal Services
Personal services businesses, such as cosmetics, hair salons and pet grooming, are also relatively recession-proof. This is because people still need to care for themselves and their pets, even in tough times.
- Home Maintenance
Home maintenance businesses, such as plumbing and HVAC repair, are also in high demand during economic downturns. This is because people are generally more likely to repair their homes rather than purchase new ones during a recession.
While the retail industry has been struggling in recent years, businesses that offer essential goods and services, such as grocery stores and pharmacies, are generally more resilient to economic downturns.
These are all great industries to consider if you’re looking to start a business during tough economic times.
What to Consider When Starting a Business in a Recession
While there are certainly some advantages to starting a business during a recession, there are also some important things to consider. Here are a few things to keep in mind if you’re thinking about starting a business in a recession:
- Make sure you have enough cash on hand.
Starting a business is always risky, but it’s especially risky during a recession. You may have trouble finding investors or customers during tough economic times.
That’s why it’s important to ensure you have enough cash to sustain your business until it starts making money. It’s also a good idea to have a solid business plan in place, so you know exactly how you will make money.
- Consider your target market.
It’s also important to consider your target market when starting a business during a recession. This is because certain markets are more likely to be affected by an economic downturn than others. You can use Conjointly’s Conjoint Analysis Tool or similar resources to study the market and analyze how well your business can do and what changes you can bring to improve it.
- Don’t over-leverage yourself.
Another important thing to consider when starting a business during a recession is to not over-leverage yourself. That means don’t take on more debt than you can handle or invest more money than you can afford to lose.
These are just a few things to consider if you’re considering starting a business during a recession. While there are certainly some advantages to starting a business during tough economic times, it’s important to be aware of the risks involved.
The Importance of Market Research
Starting a business during a recession can be a great way to get ahead of the competition. However, it’s important to note that starting a business during tough economic times is still a risky proposition.
This is why doing your market research before starting a business during a recession is important. This means you need to understand the needs of your target market and make sure there is a demand for your products or services. For example, if you own a handmade cosmetics or skincare company, you might want to look at various cosmetic packaging services in tandem with the current trends. This could improve your reachability and also promote your brand.
However, in order to conduct market research, you may have to invest heavily in data, which could help you understand market trends and sales patterns. For this purpose, a reputed data analytics company such as Adverity (adverity.com) can offer the necessary assistance in formulating an appropriate plan to enable your business to flourish during tough economic times.
In addition, understanding how your target market has been affected by the recession is also important. This includes understanding their spending habits and whether or not they’re likely to continue spending money on your products or services during tough economic times.
All of this market research is important because it will help you determine whether or not starting a business during a recession is the right decision for you. If you do your market research and find a demand for your products or services, then starting a business during a recession can be a great way to get ahead of the competition.