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Recession proof business
8 min read

The best recession-proof businesses to start

With the global economy in a precarious place, this may deter you from the idea of starting a business. However, there are plenty of business ventures that can thrive during times of economic hardship. Recession-proof businesses range from everyday services we can’t live without, to those embracing new tech to deliver change for the better.

While no business venture is completely risk-free or recession-proof, there are choices you can make to hold your business up in tough economic times and reduce your chance of failure. Here are some examples of businesses that could either thrive during a recession, or face medium to low impact.

Food truck

Few industries are more vital than food. While tastes vary from person to person – everyone needs to eat. Food trucks are a particularly popular way to get into the food industry, as they offer chefs the same opportunity to develop their own unique menu, but with the added benefit of mobility. As a startup entrepreneur, you can literally take your business straight to your customers. And without the outgoings of a physical restaurant, you can create and develop your own unique menu at a much lower cost. Throw in the consumer dining trends created by the COVID-19 pandemic, the popularity of food trucks continues to rocket in the UK, as entrepreneurs spot the opportunity to cut their rental costs and attract new customers by going mobile.

To hit the ground running, make sure to do your research when it comes to your menu – for example, customer demands for a more healthy, sustainable lifestyle have led to a boom in plant-based products.

  • Is there a gap in your local market for this type of offering?
  • Also, keep a close eye on your competition – why are they doing so well?
  • What could you offer that’s different, better? You need to ask yourself: ‘What is my USP?

Read more: How to Start a Street Food Business

Home takeaway business

Are you looking to carve out a culinary career for yourself? But hesitant to commit to a high street premises during these turbulent times? Then starting a takeaway food business from home is a great option for you in 2022. See our full guide on how to start your own home takeaway business – from training to trends, as well as which delivery companies you could use.

Repairs and servicing

Whether it’s electricals, ovens, selling car parts, bikes, or clothes – people are more likely to mend old things than buy new when watching their wallets. From a maintenance perspective, these types of services will help ensure items work efficiently to prevent breakdown and unnecessary repairs in the future, which could prove costly for customers. Think outside the box when it comes to delivering your service, could you collect items to fix and drop them back to customers as a way to avoid paying out for a customer-facing workshop?

Read more: How to start a car parts business

Cleaning services

Keeping things clean and hygienic is a top priority for many, particularly as we emerge from the COVID-19 pandemic. Businesses want to deliver, and be seen to deliver, the highest levels of cleaning, hygiene and infection prevention to reassure and protect their customers, guests and employees. As a result, businesses are investing more in cleaning services. They’re no longer a ‘nice to have’, but very much a safety essential for many.

Additionally, with the emerging trend of ‘hybrid working’, where employees are keen to split their work between home and the office, this shift can also increase the demand for domestic cleaners. A survey by ICM revealed that 45% of UK workers predicted a permanent change in their employer’s stance on working from home. The mental health benefits of living – and working – in a clean environment will be of more importance to those who are spending more time at home. And let’s face it – the more time people spend at home, the more mess they will be making! Mix this increasing demand with technological advancements making it easier than ever for customers to find and hire a domestic cleaner such as TidyChoice and Helpling, and you’ve got yourself a business that has a good chance of weathering economic hardship.

Accounting, financial planning amd bookkeeping

Savvy organisations will respond to a recession by working with skilled professionals in accounting, financial planning, and bookkeeping to ensure any major decisions are well informed, and new opportunities are considered and capitalised on. Many individuals and small businesses might be in extra need of financial planning, asset management, and general financial guidance during times of economic uncertainty. Especially with COVID-19 financial support for businesses in play, small business owners might need a helping hand getting their heads around these new options to them.

Read more: How to become an accountant

Freelancing

If you specialise in a certain field, then freelancing is a viable, low-investment option that provides a useful revenue stream during an economic downturn. While some companies might unfortunately have to let go of full-time staff, they might retain freelance employees, who can be less expensive for them. On a similar note, consider setting up as a freelancer as a side-hustle alongside your current job (subject to the allowances of your contract), as it will not only provide some extra income on the side, but act as a safety net should a recession hit and your full-time job becomes at risk.

Read more: 10 side-hustle businesses to start this summer

Online marketing agency

This sounds like a surprising one given you’d assume fewer people would be buying things during a recession, however, the flexibility and scalability of an online marketing agency make it a business offering that can easily adapt to economic trends. 

Firstly, you’re not dealing with stock – just your staff’s time, making it less risky. By working with an agency, companies essentially have an entire team at their disposal, who are equipped to support where and when required. If a recession were to negatively impact a client’s in-house team, an online marketing agency can fill in these gaps. This agility alongside more efficient, affordable marketing will attract companies who will be looking to either outsource due to restructuring or freezing any new hires until the climate improves.

Online software company

Similar to an online agency, online software companies have less fluctuating overheads e.g. product prices, compared to other businesses. You also wouldn’t need to worry about other aspects such as shipping arrangements, packaging, etc. Software as a service (SaaS) companies are particularly resilient, as they deliver applications over the internet, as a service, as opposed to software that requires the user to install and maintain it.

It’s simply accessed by your customer online, helping them avoid complex software and hardware management. As the provider, you manage the application including security, availability and performance. If this is something you’re interested in pursuing, think about a software niche that people will invest in during any economic period, especially a niche that provides a more affordable version compared to more expensive services.

Home improvement company/Skilled trade contractor

It’s common for people to avoid going out and spending money during a recession, which means they’re willing to invest more in their homes / outdoor space, as they look to improve what they have. The home improvement industry, as well as skilled trade contractors such as carpenters, plumbers and electricians, don’t face much decrease in demand during recessions. A new report by small business insurance provider, Simply Business, claims a boom in home renovations caused by the pandemic has led to a dramatic increase in earnings for tradespeople – after analysing over 200,000 policies from tradespeople across the UK. Millions of households sought home renovations during the pandemic, with the fastest-growing tradespeople being:

  1. Joiners (36%)
  2. Furniture removal (15%)
  3. Glaziers (12%)
  4. Dry lining (10.5%)
  5. Office cleaner (10%)
  6. Fencing contractors (7.5%)
  7. Builders (7%)
  8. Driver – HGV (6.3%)
  9. Roofers (6%) / Electricians (6%)

Online teaching

If you’re knowledgeable and passionate about a specific subject and can communicate well, then online teaching could be the business for you. Video conferencing software such as Zoom, Microsoft Teams and Google Meet, as well as personal tutoring websites such as Personal Tutors and MyTutor have made it easier than ever for educators to set themselves up as online tutors. Demand for online tuition across all academic subjects understandably rocketed during the pandemic, and it looks like its popularity is here to stay. Its flexible nature means you can provide your services from anywhere without too many initial set up costs, while being able to remotely fit in with your students’ busy lives. For many, additional tutoring is seen as an essential cost to help them/their children get the grades they want, particularly at degree, A-Level and GCSE level. Tech developers have spotted the increase in this sector, with new video chat applications and education software enabling the recording of chat sessions as well as features such as messaging, interactive whiteboard, maths and drawing tools.

Additionally, take a look at the National Tutoring Programme (NTP), which the government launched in November 2020 to provide additional, targeted support for children and young people whose education has been most affected by the disruption of the pandemic. Evidence from the Education Endowment Foundation suggests that small groups and one-to-one tuition can boost progress by 3 to 5 months per pupil. The NTP offers state-funded schools and academy trusts the option to deliver tutoring through tuition partners, academic mentors and school-led tutoring. The last of which could include private tutors as explained by GOV.UK.

Hair and beauty

  • Salon

    Considered an essential by many, and a service that can’t be delivered virtually, a hair and / or beauty business is worth consideration. Bear in mind your competition though – could you find a location that doesn’t have a salon? Or could you specialise in an area to stand out from the crowd e.g. sustainable and eco-friendly products? Nail art? Exclusive use of a specific treatment or product brand in your area? To succeed during an economic downturn, start small and ensure your business is lean and agile. Plan to accommodate social distancing to ensure customers feel comfortable. Be smart with your purchasing decisions, for example – do I need this to perform my services? Will it result in efficiency gains? How long will it take to pay itself off? Are there other more affordable versions out there? Do I need this right now? While there will always be people on the hunt for a haircut, ensure you’re prioritising the right things first, and commit to a plan that enables growth over time.

  • Online beauty business

    Continuing under the hair and beauty umbrella, you might want to think about starting your own online beauty business. With salons and spas closing their doors during the pandemic, more money was spent online on items such as high-end skincare products, as customers invested in pro-grade skincare for salon results at home. According to market analyst Kline, who named consumer spending on higher-priced products as a key beauty trend for this year, 75% of physicians who participated in the survey indicated an increase in revenue for professional skincare products.Traditional nail polishes were also a key seller, as consumers opted for premium-quality products that were easy to use and remove at home. Another key trend reported in the findings is an increased focus on self-care rituals and safe, clean ingredients, which Kline reports is leading the beauty industry’s pivot to wellness. If you’re considering an online beauty business, Kline’s Beauty’s Brightest Trends Report for 2022 is a great starting place.

Virtual assistant

If you have sharp organisation skills and a hawk-eye for detail, then you might want to look into the benefits of becoming a Virtual Assistant (VA). For many busy business owners, this remote role fills an essential gap in the day-to-day running of their business – from booking travel to managing a calendar, to responding to emails and copywriting. This type of role is particularly essential to those who can’t afford a full-time assistant – and could become a preferred option for those looking to cut costs during a recession.

Online business manager

If you are a service provider who has a background in leadership and project management, good initiative and wants to work on a freelance basis, then it’s worth thinking about becoming an Online Business Manager (OBM). An OBM offers management-level support to busy business owners – and is usually relied on to free the business owner up for other things. Sometimes this is for a temporary period should a business owner need a break, or when things are particularly busy for the business. The tasks and responsibilities of an OBM differ to a Virtual Assistant, for example, they’re more strategy-focused rather than task-based, work independently rather than require direction, work for fewer clients on larger retainers, can manage a team and use their own initiative to drive business growth. If a business can’t commit to hiring this role full-time in-house, or needs to cut costs without slowing the growth of their business, then an OBM is a more flexible role that requires less overheads.

Online counsellor/therapist

Technology is making it easier than ever to provide convenient, affordable online counselling services to those looking to lead happier lives. The pandemic, a looming recession and an improved societal awareness around the benefits of taking care of your mental health and wellness has meant demand for this sector has increased, and is likely to even more-so during times of increased hardship. One in four people experience a mental health problem of some kind each year in England, with the overall number of people reporting mental health problems increasing in recent years. Websites such as Talkspace and My Therapist Online represent a major breakthrough in modern psychology: using technology to improve individual and couples therapy. This use of technology is also known as ‘telemedicine’, and is part of a growing shift in the healthcare industry, with technology enabling more convenient, affordable and on-demand benefits. If you’re a qualified counsellor / therapist or considering training as one, the demand is there and its popularity is only going to increase as a result of improved access and affordability via technology.

Airbnb host

Airbnb was founded in late 2008, in the midst of one of the worst financial crises in history. Over the following years, while most companies suffered, Airbnb in fact grew to become one of the most successful and influential companies of our time. During a recession, tourism is still happening, but people have less disposable money to travel and want to travel in more economical ways – making staycation accommodation an appealing option. And it’s not just tightening the purse strings that encourages travel closer to home, but people are still gaining confidence in travelling abroad since COVID-19 hit, and mix this with cancelled flights following airport staff shortages and an increased public awareness of the beautiful holiday spots on their doorstep, then an Airbnb business could be a great opportunity worth exploring. Make sure you do your research in advance – what would be your competition? Are there any unique selling points to your accommodation that you could market? How could you ensure your customer service and overall experience is the best, encouraging lots of positive reviews? There’s a great Airbnb community that you’ll become part of, so you need to ensure you have the passion and patience to successfully build your Airbnb business over time.

Read more: How to start an Airbnb business

Dropshipping

If you want to start a business selling items online but are worried about overhead costs, then you might want to consider dropshipping. This is where you don’t actually pre-order the items you’re selling or keep them in stock, so you won’t need to commit to storage space either! Instead, you post a listing and then order from a third party to fulfil the order. You make a profit by charging a higher rate than the original retailer (usually a wholesaler). During a recession you want to make sure you’re not overcharging your customers – you can avoid this by only buying from wholesalers or suppliers rather than other end retail stores.

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