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With the rise of 2020, we saw a new reality unfold a reality in which over 22 million people lost their jobs, in the US alone. At this point in the economic downturn, many industries have been forced to a halt until the foreseeable future. This shaky economy is a scary scenario for any entrepreneur.
While many have taken time off to assess the markets, some risk-takers are using this time to begin their entrepreneurial expeditions. If done properly, starting a business during a recession can be an amazing opportunity to build influence over businesses that are scared of making moves.
History demonstrates, time and again, that many highly successful companies have their roots in slow economies. Responses to an economic downturn can teach us a great deal about running businesses.
This year, we might see a wave of new businesses that take toll of the economy, out of sheer necessity. With so many people without jobs, there is a big chance that we will see a high density of independent businesses making headway in 2020.
On the surface, it seems counter-intuitive that any business would succeed in a slow economy. However, a 2009 study by the Kauffman Foundation reveals that over 50% of the Fortune 500 companies started either in a bear market or a full-blown recession.
Let’s take a look at some industries and business ideas that still have a shot towards prosperity in this trembling economy. That being said, you can practically make any business idea “Recession-proof” by focussing on employee retention, honing in your marketing, and building a reserve of liquid funds; so you can make big moves, while other businesses are struggling.
- Food Industry: Sweet Treats, Cafes, Bakeries etc…
Even though consumers cut back on their spendings during times of economic hardship, people still make room in their budgets for what trend analysts call “small indulgences.” Businesses that deal with sweet treats like donuts, pastries, and chocolates, prosper during recessions.
For reference, during the 2008 financial crisis, Cadbury’s profits shot up by 30% and Nestle’s profits saw a jump of over 10.9%.Many treats became popular during the Great Depression in the 30s. Brands like Snickers, Tootsie Pops, and Mars bars, were all created and thrived during that time.
The theory behind this prosperity is simple; people turn to sweets and fast food for comfort during fast times. Since chocolate boosts serotonin and endorphin levels in the brain, it is natural that people turn to these treats when they are anxious.
If you are an entrepreneur with a sweet tooth, you may consider opening a bakery or chocolaterie. Have your treats recognized by getting international with your recipes, and create items that accommodate all the different needs of your customers. The more options you provide, the larger your customer base gets.
Even though consumers cut back on their spendings during times of economic hardship, people still make room in their budgets for what trend analysts call “small indulgences.” Businesses that deal with sweet treats like donuts, pastries, and chocolates, prosper during recessions.
For reference, during the 2008 financial crisis, Cadbury’s profits shot up by 30% and Nestle’s profits saw a jump of over 10.9%.Many treats became popular during the Great Depression in the 30s. Brands like Snickers, Tootsie Pops, and Mars bars, were all created and thrived during that time.
Although, local grocery stores often feel the tension of the market in times like these. A good way to get past your competition, like a local grocery store, is to provide Delivery Services. In a time when people are afraid of going out, customers will appreciate it when their favorite stores start delivering to their doorstep.
- Sanitation Industry- Cleaning Services
While residential cleaning services often take a hit during an economic downturn, commercial cleaning services are always ticking along, regardless of the testing times. Cleaning services are often a necessity in corporate/ public environments.
Though this is a competitive industry, it has plenty of room for improvement. Every year, the average sanitation company losses close to 55% of their clients due to poor service.
Since 2007, the sanitation industry has grown steadily, with an average rate of 6.6% per annum. Industry revenue is only predicted to increase over the next five years.
If you can offer thorough, high-quality services, you will have an excellent chance of succeeding in this market. To attract attention, you can create a rate structure that caters to the basic entry-level customer, as well as the large corporations that demand annual packages.
- Search Engine Optimization
Every business craves the attention of the market- to attract customers, and to let the world know what it has to offer. These days, the one fool-proof technique of gaining the wanted attention of the customers is Search Engines. So many companies across the world rely on search engines to generate business.
Due to the recent boom of the E-Commerce industry, the amount of online businesses is heavily increasing. With the growing attraction of a web market and a hard strike by a pandemic, many other businesses have also been forced to go online.
All of these companies need someone or some way to get attention, but very few of them know how to navigate the complicated world of search engines. This is where you can come in with your skills of Search Engine Optimization (SEO). SEO is the process of optimizing your website to attract targeted traffic from a search engine’s organic (unpaid) rankings. In other words, it’s the practice of improving your online visibility, so your web page has more visitors.
Every day, millions of people across the world, search for things online. Internet searches are a great source of traffic for a website. In fact, a 2018 Traffic Referrer Report suggests that almost 70.6% (nearly 60% come from Google) of all traffic on the web originates from a search engine. Thus, to have more visitors, a website needs to have a higher position in the organic rankings
Before you start building your base, set aside a few hours a week, to learn SEO. There are plenty of online resources that can teach you everything you need to know.
Search Engines have crawlers that raid the internet and gather information regarding all the content that one can access online. This data is then translated into indexes that the search engines use, to create an algorithm that matches a search with the overall “best” result. A variety of ranking factors make up a search engine’s algorithm.
SEO works by building a high-quality website and advancing its content, in a way that is perceivable to the search engines. Search engines want to provide the best possible match for a user search. Your job is to use on-page and off-page SEO factors to make your website the best possible match.
This all may sound complicated right now, but if you put in the time upfront, you will profit immensely, down the road. SEO experts are constantly in demand. In this market, almost every business requires online attention, so every business needs someone like you.
- Virtual Assistants/ Freelancing
Another growing industry is one of the Virtual Assistants. Many recruiters have hired a few, at different stages of the company, to lend an extra pair of hands-on tasks that cannot be fully automated by their bots.
With so many companies now forced to operate remotely, recruiters are desperately in need of workers who they can trust and who can operate productively from their own homes. The demand for virtual assistants has been growing for years, and with the rate of developments of the telecommunications industry, this demand is only expected to rise.
Companies also spend a fair amount of money on platforms like UserTesting and Usability Hub. When a firm has a new service or product, they put it on certain websites, to survey users on their thoughts and intuitions. You can join as a tester and make money for each review that you give. You might not be making a living from it, but its income while you sit at home.
You can also look at platforms like UpWork and Fiverr, where you can offer your services in your own time. Upwork connects people with skills ranging from writing, administrative support, customer service, marketing, and accounting- with potential clients. These might just sound like freelance gigs in the beginning, but entire companies have been built around successful Upwork and Fiverr profiles. You just need to be good at what you do and work hard to stand out.
- Child Care
People always want their children to have the best care. This is the reason that the industry will stand the test of time. If you do not wish to own an entire child care business, you can still find profitable ways to support the people in the industry. You can also make money by helping people who homeschool their children.
The number of homeschool kids has been increasing at a steady rate since 1999. Over five years, starting in 2007, there was an 18% increase in the number of children being homeschooled. In 2020, there are over 2.5 children in the US, that primarily learn from home. Consider ways in which you can provide supplies and resources targeted at this ever-expanding group.
Single mothers and subsequently their children are hit hard during recessions. In 2009, single mothers of children under the age of six had an unemployment rate of 17.5%. In order to grow the economy, and to ensure a sustainable future, it is important to provide affordable learning alternatives and ways to connect parents with reputable sitters.
To ensure the prosperity of your child-care based business, consider providing courses that traditional schools cannot. Communication workshops and nature activities can allow children to exercise their brains while having fun.
- Cosmetics Industry
The beauty industry stands to be “recession-proof” in certain ways. Though business in the beauty industry may not prosper during quarantine times, it is very capable of sustaining a financial crisis.
When the market sees a recession, people still invest in their appearance, because of the notion that “when you look good, you feel good.” No matter the state of their bank account, people often spend money on items that help them improve their outer objective “beauty.”
Many times cosmetic needs coincide with people’s daily needs. Regardless of the situation, people always require soap, shampoo, deodorants, etc.
- Thrift Stores and Retail Consignments
Resale and thrift stores are one of the few types of businesses that manage to stay afloat during times of economic uncertainty. Since the Great Recession as well as the Great Depression, an average consumer has been determined to hunt for the best deals.
This makes it difficult for the big department stores to compete with resale and thrift stores. An August 2009 survey revealed that 64.1% of resale and thrift stores saw an increase in sales from 2008.
There is a large potential in the retail consignment industry as well; especially in luxury retail consignment. People love to wear designer clothes and look expensive, but they do not wish to pay “designer” prices. This is where the consignment stores jump in and please the majority that wishes for lower prices.
ThredUp, an online clothing consignment store, is a great example of a uniquely thrifty operation that sprung from economic hardship during the last recession.
The beauty of resale stores is that they have so much more to provide than just clothes. People also love to furnish their homes and inexpensively treat themselves to games, books and so much more.
People often turn to wallet-friendly, DIY projects during a financial downturn. Most look to retail stores, to fulfill their desires. Make your store more inviting by creating a boutique atmosphere consider giving local artists, a place to sell their wares.
Although sometimes they may seem almost interchangeable, there is a major difference between retail consignments and thrift stores. While a consignment store’s primary objective is to make a profit, thrift stores are often non- profit organizations. Though some for-profit resale stores regard themselves as thrift stores, the money raised in a thrift shop is typically used to fund a nonprofit organization.
These are some industries and businesses that have the capability of sustaining a hard blow from the economy. Though no business is truly “recession-proof”, your efforts and dedication can keep your company afloat. Many businesses that start during a recession have the potential of success. So to reiterate, if you focus on employee retention, honing-in your marketing, and building a reserve of liquid funds; you too can create a path for success.
