Economic recession is something no business wants to face. In fact, recessions can be downright dooming for businesses that aren’t equipped to weather them. That said, there are actually some businesses that can thrive during recessions—often, because they’re essential businesses.
As the economic hardships continue to mount in 2023, it’s looking more and more like the economy could be headed for a recessionary period. If you’re an entrepreneur worried about starting up in a down economy, it’s worthwhile to start looking at recession-proof businesses and why these types of companies are equipped for success in even troubling times.
Here’s a look at 13 recession-proof businesses that have the power to flourish even in a down-trending, contracting economy.
13 recession-proof businesses to consider in 2023
- Real estate and property management. When financial markets start to suffer and crash, real estate becomes a safe haven investment. Plus, people will always need a place to live! As the real estate market ramps up, there are plenty of opportunities for small businesses to thrive.
- Pet retail and care services. People love their pets and would do anything to keep them happy and healthy. This is even more true among Millennials and Gen Z pet owners. Even during a recession, people will pay to pamper their pets: from food and treats to toys, comfort items, and practical accessories.
- Health services. Healthcare is one of few recession-proof industries. People will always need medical care—be it dentistry and optometry or urgent care and inpatient services. Small health clinics across every area of practice are a smart bet when the economy begins to slope downward.
- Food stores and grocery services. What’s more recession-proof than food? Food stores and grocery services see consistent business throughout recessions because, at the end of the day, people need to eat. This is especially true among stores with a good mix of fresh and prepackaged foods.
- Repair industry and renovations. When times get tough, more people shift into the mindset of “fix” or “repair” as opposed to buying new. They want to make their items last longer. From iPhones to homes, clothing to furniture, repair-focused businesses see a big uptick in business during recessions.
- Information Technology (IT) services. IT is a sector that hasn’t always been around during recessionary periods; however, it’s definitely a safe investment. Especially today, during the rise of remote work and digital services, IT services are always in-demand and an ever-present need.
- Legal services. Regardless of what’s happening economically, there’s always a demand for legal services. Whether they need representation in court or advice on how to start a business, people are in constant pursuit of lawyers, attorneys, and legal experts. If you have a legal background, now’s the time to start your own firm!
- Financial and accounting services. Nothing gets individuals and businesses to take an active role in their finances quite like economic recession. If you have a background in bookkeeping, accounting, financial planning, or any other fiscal expertise, there’s growing demand right now that you can capitalize on.
- Baby products. While it’s true people tend to have fewer children during times of economic hardship, that doesn’t mean they stop altogether! There’s always an ever-present need for baby care products: everything from clothing, to formula, to diapers, and beyond. Infant products are as close to a recession-proof business as possible.
- Education and day care. Recessions tend to see more people working multiple jobs or frequently searching for new employment. As a result, they lean more heavily on day care and education services in both part- and full-time capacities. Child care is a lucrative industry in any climate, but especially so in times of recession.
- Insurance industry. The insurance industry isn’t just filled with businesses that survived the great depression; it actually thrived! Insurance tends to be a great investment in recessionary periods and there’s an aura of fear and trepidation that make selling it a lucrative endeavor.
- Food and beverage industry. Just like food stores and grocery services, food and beverage production are among the safest recession-proof businesses. There are plenty of opportunities to provide delicious, affordable, and healthy food and drink to people searching for new options during trying times.
- Funeral. While it might sound morbid, it’s worth remembering that people pass away no matter what the economic climate is. And, with a rapidly aging population, funeral services stand to be a strong niche for small businesses in 2023 and beyond. Now’s the time to begin offering these services.
Need help starting a business?
It can seem scary to start a business during times of economic strife; however, the right business can put you in a position to succeed no matter the climate. You just need to make sure you’re starting your venture off on a strong foundation. NorthOne can help you start a business the right way.
One of the first and most important steps is getting your small business’ finances and startup capital in order. Do this by opening a business bank account: one that gives you the freedom and ability to manage your funds as you see fit. Here again, NorthOne is ready to assist. We know the importance of getting your business off on the right foot financially.
What is a recession?
A recession occurs when there’s a general decline in economic activity. It means that businesses are producing less, people are spending less, and there’s generally less money moving through the economy. Recessions tend to be protracted (several months) before economic expansion begins again.
What is a recession-proof business?
While no business is truly immune to recession, there are many recession-proof businesses that continue to operate normally during a recession—or even benefit from economic downturn. These are typically businesses or industries that are “essential” or that have an ever-present demand for goods and services.
What businesses are recession-proof of -resistant?
Some recession-proof industries include healthcare, food manufacturing and supply, infant care and education, repair services, financial services, legal services and others.
Ready to start a recession-proof business?
There are tons of business opportunities out there that can pass muster during times of economic recession. The key is understanding why these businesses are recession-proof and how to attract customers at a time when they might not be as willing or able to spend money on goods and services. With some good planning and forethought, you can create a business that’s capable of thriving in even the worst market conditions!