What do Microsoft, Apple, and Airbnb have in common? All these three big names are recession-proof businesses that survived through an economic downturn.
Recession-proof businesses are those that do not close despite a pandemic, just like what the world has now. Instead, these industries flourish even when other businesses are failing to keep up.
Since there had been a pandemic from the recent months of this year, it had been challenging for all entrepreneurs to keep up.
Social distancing had disrupted the way of life of many, and so, businesses needed to cut costs. Sadly, cost-cutting had involved laying off employees.
This pandemic has vastly affected the economy negatively. But did you know that a downturn like this is inevitable? It follows a cyclic pattern.
And did you know that not all industries suffer in a downturn? Some businesses thrive and even experience growth in their sales.
What happens in a recession?
When you think of the term “recession,” the first thing that you may think about is the Great Recession. It happened during the late 2000s when the real estate market crashed due to bad debts left unpaid.
Simply put, a recession is an economic slowdown wherein prices tend to decline. Demand is less as more people tend to not spend their money.
And so, entrepreneurs entice consumers to buy by lowering the prices of goods and services. But this is not always a good thing. Take the case of the current pandemic.
The lockdowns kept people in their homes and left brick-and-mortars without customers. Even when the stores are slowly opening to resume operations, many small businesses will not be able to keep up.
Operating with decreased capacity because of social distancing, restaurants like Cleveland’s Tastebuds are hard-hit.
Aside from this, the unemployment rate shot up to a level that is worse than what happened in the Great Depression.
And so, there is less money going around as jobless people tend to hang onto their savings until they find a new opportunity to earn.
But the good news is that you can always find opportunities to build a business or recession-proof your existing one to survive.
What makes a business recession-proof?
A recession-proof business will always have demand. If you have one, you can be sure to lock in profits even when other industries are lowering their prices.
Hence, build your business that will solve problems that consumers will not say no to. Or, serve stable and similarly recession-proof ones.
Another key element in this kind of business is diversification. Look at Amazon. The demand for Amazon’s services became so high that despite the pandemic, they were hiring.
Aside from being an online retailer, the company has physical stores selling fresh produce and cloud-computing services among others.
And everything they offer is considered essential in this pandemic which makes them thrive.
What kinds of recession-proof businesses can you start in Cleveland now?
Although Cleveland is also affected by the current pandemic, you can still build your recession-proof start-up in this city which was once hailed as one of the most entrepreneur-friendly places.
These businesses leverage the changing buying patterns of consumers when faced with stress brought by the recession.
Everyone knows that food is a basic need. But comfort food like sweets and chips do especially great even at a recession.
People need to feel good to address the stress they are experiencing. And eating their favorite ones makes them feel good.
Why not start selling those home-cooked meals or pastries that you have been making since you stayed home more often?
Food and home essentials will always have demand whatever the economic condition is. Start your grocery store, may it be physical or online, addresses the need for more supplies.
Boost your local SEO to improve your visibility in your community.
Home Repair Services
In a downturn, people can consider going out as a treat, not an essential. Hence, they stay home more often. And with a tight budget, people tend to buy fewer new things.
If something is broken, they have it repaired than replace it entirely with a new one. And staying home longer means desiring for more comfort.
Anything that needs repair will get repaired to avoid further damage which will be more costly for the homeowner.
Car Repair Services
Transportation is also essential. So, even in a downturn, car owners do not put off any car maintenance needs that they have.
This is also one of those services that will not experience a dip in demand simply because getting your taxes fixed is mandated by the government. Anything that deals with legal matters will always have demand.
Since buying essentials is a primary concern, people will cut costs by going into thrift stores. There is a surge in demand for cheaper things in a downturn.
Online Selling and Freelancing
Providing services remotely is a booming opportunity currently. With social distancing, working from home is something you can leverage on. Create a Shopify store and start your e-Commerce business.
Recessions could bring in threats in job security and businesses. But the good news is that it is not long-term.
Aside from the niches suggested in this article, your marketing strategy also matters. Everyone is spending more time indoors at the comfort of their homes and you should, too.
Utilize the power of the internet to market your products and services. It is the best time to do it and if you have not started at all, get in touch with us at Milia Marketing!