As a business owner or future entrepreneur, you may face the daunting wave of a recession in the ever-shifting economy. There may be ways to minimize the impact. History has shown that certain types of businesses have an opportunity to thrive during uncertain times. Let's dive into the types of businesses that can find their footing when times get tough.
Characteristics of Recession-Resistant Businesses
Let's uncover the traits that can help businesses thrive when others barely survive.
In-Demand Services
Setting your sights on in-demand services can provide a solid foundation for the best business during a recession. The in-demand services are the essentials people turn to, regardless of economic conditions. You can tailor your business model to offer services that meet basic and ongoing needs, which means consistent demand.
When you concentrate on services that support day-to-day needs, people will prioritize their spending on your services because they use them whether there is a recession or not. This includes emergency services or those services that are integral to managing a home or lifestyle, such as plumbing, HVAC maintenance, and electrical repairs. These types of services are not discretionary and are built into regular expenses of home ownership, making them recession-resistant options for business ventures.
Diversification in Services Offered
Recession-resistant businesses showcase a spectrum of services or cater to a varied customer base and often stand stronger against the economic tides. Having diversified revenue options is a way to build a flexible and resilient business that adapts and finds opportunities even when specific markets slow down, and adopting this approach means you're not just surviving a recession but also better equipped to thrive in one.
Niche Business
If you are looking for a business opportunity during an economic recession, carving out a niche or specializing can give you a better stronghold in the market. It's about creating a dedicated customer base that will stick with you, come high water or economic low tides. When a service is needed, and there are few providers, this can drive growth even in volatile economic conditions.
Home-Based Business Models
A home-based business venture can offer a unique financial advantage, especially during unpredictable economic climates. By shifting your business strategy to a home-based model, you can significantly reduce your spending through minimized overhead costs, reduced utility bills, eliminated commuting expenses, and decreased operations expenses. This strategic move to home-based operations can streamline your business expenses and position you for more significant financial agility in a recession-resistant business model.
5 Businesses That Do Well in a Recession
When economic uncertainty looms, businesses in the home service industry can emerge as beacons of stability. As a homeowner, you may need more expertise to handle all the maintenance and repairs your property requires, and this is where professionals step in, providing essential services beyond the typical DIY skill set. These businesses cover a spectrum of services integral to maintaining a home, ensuring they remain in demand and providing peace of mind regardless of the economic climate.
Pest Control Services
One business that can do well in a recession is outdoor services like pest control, which safeguard public health and your property. Some reasons for this include:
- Critical to Health: Pest control protects public health, mitigating pests' risks.
- Remarkable Growth: A striking statistic was released by the Bureau of Labor Statistics showing that employment in pest control services has surged by more than 18% since the end of 2019.
- Steady Demand: Economic highs and lows don't sway the need for pest control, underscoring its stability as a business.
- Broad Market Reach: The demand for pest control is pervasive, stretching from homes to businesses, making it indispensable across sectors.
Secure your future in the thriving outdoor services sector by downloading the Mosquito Joe® franchise guide.
HVAC & Plumbing Services
In your pursuit of a business that holds steady even when the overall economy doesn't, HVAC and plumbing services can be a smart choice because you would provide essential home services that homeowners prioritize for their well-being, which can translate to a dependable business even in downturns.
Consider this: Homeowners and businesses across the U.S. must replace over 3 million heating and air conditioning systems annually, with an additional $14 billion directed toward HVAC repairs. This necessity for professional and skilled services, driven by a lack of widespread expertise in these complex systems, can help ensure a consistent revenue stream. By stepping into this space, you could tap into a market where the need for maintenance and repair services is not as impacted by economic winds, offering you a stable, recession-resistant business.
Tap into the stability of essential home services by downloading the Aire Serv® or Mr. Rooter Plumbing® franchise guides.
Appliance Maintenance and Repairs
Appliance repair businesses could be a strategic move for you, especially when economic certainty is in question. Your services become indispensable as appliances, which can have issues regardless of the economy, play a critical role in daily life. It is hard to imagine, but 95% of homeowners have had a major appliance breakdown at some point, with over 40% reporting these issues in the last year alone.
This prevalence of repair needs, paired with the reality that, during a recession, consumers often opt to fix rather than replace appliances, amplifies the call for your business’ expertise. With a diverse service offering that allows your team to fix everything from refrigerators to ovens, your services can be in constant demand, making appliance repair businesses a robust choice in any economic scenario.
Download our Mr. Appliance® franchise guide to explore the diverse and indispensable appliance repair services in this established business model.
Restoration Services
In the aftermath of natural disasters, restoration services are the cornerstone of community resilience. Restoration businesses become the frontline warriors in rebuilding lives and homes when disasters strike.
- Critical Recovery Role: Restoration services are crucial following floods, hurricanes, earthquakes, and fires, aiding in the essential recovery of affected properties.
- Insurance and Assistance Synergy: Many homeowners with insurance or government assistance rely on your services for swift restoration, ensuring consistent demand.
- Diverse Service Spectrum: Your business can offer various restoration services, from water damage repair to mold remediation, catering to various homeowner needs after different types of disasters.
With such a diverse portfolio, your restoration business has the opportunity to stand as a pillar of stability, ready to serve when the unexpected happens, solidifying its position as an indispensable asset to the community.
Download the Rainbow Restoration® franchise guide to take the first step in securing a resilient, in-demand business.
Cleaning Services
Engaging with cleaning services ensures you're tapping into a market in steady demand. Serving a dual market of commercial and residential clients provides your business with the opportunity that many seek but only some achieve.
The flexibility of service models in the cleaning industry allows you to adapt to your clients' varying schedules and financial capacities, ensuring your services better align with their current needs. This adaptability weathers economic fluctuations and positions your cleaning service as a dependable choice for clients in any climate.
Download the Molly Maid® franchise guide to discover the potential in a steady-demand market, offering flexible cleaning services to commercial and residential clients.
Tips for Starting a Business During a Recession
Some businesses do well in a recession. Understanding the resilience of the home service industry, you can see why it's consistently ranked among the top for weathering economic storms. Franchising does offer certain advantages, such as reduced risk relative to independent start-ups with its established business models and brand recognition that can earn consumer trust, which is especially valuable during a recession.
Moreover, securing financing as a franchisee may be more straightforward, given that lenders are often more inclined to support a business with an established success record. If you’re ready to learn more about recession-resistant franchise opportunities, explore Neighborly® brands and take the quiz to find out which franchise opportunity might be right for you.
