It may go without saying, but a business cannot prosper if it does not can't survive - andyou, as a business owner, are almost inevitably faced with situations that put you in survival mode at some point. A recession is one of the most likely and urgent challenges that can put you in this position.
Uncertainty and broader economic turmoil can strain virtually any business 's operations. any business. But as devastating as it can be, an economic downturn does not have to be hopeless. There are some steps you can take to make sure your business is recession proof.
Here we are going to go over what a recession proof business is. , take a look at some recession-proof business ideas, and review the steps you can take to protect your business from a recession.
'Recession-proofbusiness 'is a relatively loose term used to describe certain businesses, industries or assets that are better equipped than most to economically withstand the impact of a recession.
Businesses who are generally seen as inherently recession-proof are often "needs-oriented. " They sell products or services that people cannot live without, regardless of the state of the world. economy.
Bu The ability to withstand a recession is not necessarily limited to these types of businesses. Virtually any business can take giant strides to "play the gamble" and defend against the impact of an economic downturn.
Before we look at how your business can improve its chances of surviving a recession, let's take a look at some more conventional recession-proof business ideas that you might consider pursuing.e if you are looking to start a business that is well equipped to handle less than ideal economic conditions.
- Accounting and financial advice
- Home and household repair cars
- Some food and beverage retailers
- Candy and comfort foods
- Online education
- Baby products
“Defensive industries” are often considered the most recession-resistant. These types of businesses - the ones that consumers will need to buy from,whatever the circumstances - are among the best equipped to deal with economic turmoil.
Of these industries, health care could be the most important. Regardless of the state of the economy, people will always take care of their personal well-being. This trend, coupled with a need for constant advancements in science and medicine, makes health service companies one of the most sustainable and reliable businesses in times of economic crisis.
Pharmaceuticals, home care for the elderly, contraceptives, walking-in clinics and other healthcare businesses present viable opportunities for entrepreneurs and investors. If you're looking for a business that will withstand uncertain economic times, you can start by looking at the services people literally can't live without.
2. Accounting and financial advice
Accounting and other financial advisory services are almost always in demand during a recession, and it makes sense: One of the easiest and most convenient ways to deal with financial insecurity is to seek financial advice.
Individuals and businesses alike need to know how to navigate the troubled waters of the economy to weather recessions, and it is a difficult task to do without professional and insider insight.
If you have the know-how, skills, education and knowledge to provide this, whether through something like bookkeeping, accounting or planning financial, you can prepare to maintain a successful business in difficult economic circumstances.
3. Home and Car Repair
Utilities, such as home and car repairs, are another defective industry.nsive key, recession resistant. Most people don't have the resources and knowledge to handle routine home and automobile maintenance, let alone major renovations, construction, or parts replacement. But the need will always be there.
Even during a recession, the average person will struggle to live with a termite infestation or major water damage. And car owners will always have to get from point A to point B.
The repair behind these kinds of issues isn't intuitive or accessible to most - so if you know how to deliver it reliably, you just might have the basis of a lucrative, recession-resistant business.
4. Some food and beverage retailers
You may have noticed a common thread running through the points on this list: Recession-proof businesses revolve around the nneed. And the last time I checked, you need food to live. Now, this particular point does not apply to all grocery retailers.
Some restaurants often struggle to cope during a recession, but there are plenty of other businesses out there. Food and drink that tend to thrive thanks to the uncertain economy. Bulk food stores, grocery stores and fast food chains tend to resist during economic downturns.
5. Candy & Comfort Foods
Now, this one may seem counterintuitive. You don 't need candy to survive. These are essentially micro-luxuries - but oddly enough, that's what makes candy and comfort foods recession-proof.
People are always forced to splurge on every now and then in the midst of the recession. - after all, allworld needs some sort of respite from the economic turmoil. Sweets and other comfort foods provide a relatively inexpensive outlet for these expenses.
In the midst of a recession, Hershey 's sales have actually increased . Like I said, candy is a micro-luxury - a lot of people need it during tough economic times.
6. Online Education
A recession comes with soaring unemployment - and spikes in unemployment come with a significant chunk of the struggling workforce to refine his skills and strengthen his curriculum vitae. This trend is helping to create a market for online content for personal and professional development.
Theprograms that offer professional certifications or other educational materials that can ultimately make job seekers more competitive in their respective markets often see a boost -recession.
If you have specialized knowledge in an area and the resources to create compelling educational content, you may want to consider building an online education business that can sustain itself in times of economic uncertainty.
7. Baby Products
Many people will spend less on themselves in the midst of a recession, but very few will skimp on spending for their children. Even as families with infants and toddlers if they cut back on spending during an economic downturn, they will always seek better quality products for their children.
Companies selling baby products , like baby bottles, cradleswaters, and baby clothes, generally hold up better than most during a recession. Parents will almost always look after their children, regardless of the economic situation. If you are looking to invest or start a recession-proof business, consider products suitable for this market.
How to Protect Your Business from Recession
1. Build credit for your business.
Creditors tend to raise their lending standards when a recession hits. So it's in your best interest to prioritize building credit if you want to prepare for an economic downturn. Although it is not taken for granted, there is a good chance that you will need financing if the economy plunges.
This is why take the necessary steps to position yourself as a reliable partner . , a trustworthy investment for creditors serves you when trying to protectyour business against the recession.
Have your financial records in order, invest in a business credit card to ease your personal credit report, stay on top of all the payments you need to make and make payments. 'other relevant steps that will help you be successful if you need a loan in the middle of a recession.
2. Plan carefully.
Effective sales forecasting is essential to sustainable business success, regardless of economic circumstances. But if you want to stay ahead of any surprises that might arise with the economic turmoil, you need to plan thoughtfully and comprehensively.
You can't predict with star-eyed optimism exclusively. You have to be pragmatic. Your forecast should factor in best case scenarios, realistic courses, and "code red " outcomes - and you have to plan around all three.
These less than ideal forecasts may include considerations about potential economic turmoil. Recessions can b They are unpredictable, but they are part of the natural ebb and flow of any economy. Make sure you have an idea of what your business can expect if this happens, so you have some sort of plan in place to deal with these kinds of conditions.
3. Maintain strong customer relationships.
Your existing customers can be an invaluable lifeline in times of economic uncertainty. Acquiring customers can become considerably more difficult during a recession, so keeping your existing base is essential if you want to stay afloat when the economy is in dire straits.
Make sure you have to be consistent (but not pushy) in staying in touch with your customers once you have onboard them. See how they like your product orservice and make sure that any major concerns they may have are addressed promptly and comprehensively. Maintain a strong, accessible, and continuously accessible customer support infrastructure that can handle minor customer issues and inconveniences as they arise.
In one way or another. another, make the effort to delight and help your existing base - do what you can to make sure they stay with you when the time comes for them to cut costs.
Succeed a recession means winning as much business as you can while losing as little as possible. The latter begins by developing and maintaining strong customer relationships.
4. Have a good grasp of your numbers.
You will have a hard time getting through a recession if you don 't have a clear idea of the financial situation of your business. If you don't knowyour most pressing KPIs - related to cash flow, profit margin, budget, production costs, inventory and sales - you won't be able to plan for worst-case scenarios.
Keep an eye out consistent and cautious about the numbers behind your business performance, day-to-day operations and financial history. These numbers will help you understand where you stand before a recession and help you navigate economic turmoil as a result.
5. Keep investing in marketing.
Businesses are naturally inclined to start making cuts across the board when a recession hits, and most of the time these businesses quickly turn to marketing before evaluating other departments.
In some cases, companies see marketing more as a 'good to have' than a 'need to have' in a business context. '' economic uncertainty,but you must avoid falling into this trap. Sometimes the best defense against a recession is a good attack.
Attracting new business is often key to weathering economic turmoil, so avoiding big cuts to your marketing budget can be a good bet when trying. to protect your operations against the recession.
6. Consider researching multiple sources of income.
Getting stuck in one lane can be difficult in the middle of a recession. If you rely on a single source of income during economic turmoil, you make yourself particularly vulnerable to disinterest from prospects or diminishing needs.
A recession naturally changes the needs, interests and priorities of prospects. If you want to maximize your chances of weathering economic turmoil, you need to be ready and able to change with them.
Recessions will almost always mean trouble for your business, but they don't have to be catastrophic. If you take the right steps, stay in control of your operations, and stay sane before and during economic turmoil, you'll be in a good position to keep your business as strong and recession-proof as possible.