You are currently viewing 12 recession-proof businesses and industries

12 recession-proof businesses and industries

visual space / Getty Images

A looming recession often forces people to rethink their career choices, either because they fear being laid off or because they need a raise. But a recession can be a tough time to try to change jobs or start a business. Some industries and businesses are more recession-proof than others, and knowing which ones they are can be helpful in a recession.

If you want to know what businesses do well in a recession, think about those that provide goods and services that people and businesses can’t live without, or those that save consumers money on what they need. Here are a few companies and industries that are likely to fare better than others in a downturn.

Bonus offer: Find a chequing account that fits your lifestyle. $100 bonus offer for new current account customers.

Which companies succeed in a recession?

In times of recession, consumers and businesses need to get creative to get what they need at the best price. This may mean paying less for goods and services or getting just what they need and nothing more. These types of companies can help them do that.

Consultant

If you have specialized expertise in a particular area, a recession can be a good time to get a shingle out. By providing advice to other businesses when needed, you help them reduce their costs, even though you may charge more than you would as an employee.

It’s a particularly good choice right now, as companies struggle to fill vacancies. In order to carry out projects while waiting to find the right permanent fit, they can hire a consultant.

You can start your consulting business on the side, keeping your full-time job until you start – provided, of course, that your consulting work does not conflict with your day job.

Independent

Another sector that will likely do well in a recession is freelance. Companies hire freelancers for a number of tasks: content writing, graphic design, photography, and even finance and accounting. A freelancer is someone who provides a service as needed and who is an independent contractor, not an employee.

Bonus offer: Bank of America $100 bonus offer for new online checking accounts. See the page for more details.

As with consultants, freelancers provide their services for just the time they need. Once the job is done, the freelancer moves on to the next client. Because they lack benefits such as vacation and health insurance, freelancers can charge more than a salaried employee could earn. And if you’re currently working full-time and just looking to earn a little extra cash, freelance work is a great side hustle.

Online Marketing

During a recession, businesses often increase their marketing efforts to try to win more customers. TV and print advertising budgets can be reduced, while online ads are increased as they are more easily targeted.

Marketing online can be a profitable way to increase sales, but you need to know what you’re doing. An online marketing company can help by providing business advice and services around e-commerce, website design, social media and more.

Concert work

Similar to freelancers, gig workers are paid for the services they provide. Ride-sharing services like Lyft and Uber, and delivery services like GrubHub and Instacart are popular examples of work-on-demand, but there are many more.

Gig workers are independent contractors but use companies to connect them with people seeking their services. For example, Wag connects dog walkers to dog owners, Fivrr connects creatives to businesses who may need a logo or blog post, and Uber connects drivers to those who need transportation. .

Good to know

If you plan to work on-demand or become self-employed, keep in mind that you will be responsible for your own health insurance and there are no paid vacations or sick days. You will also have to pay the self-employment tax, which means you pay the employer and employee portions of the Social Security and Medicare tax withholding. Consider these costs when setting your prices or determining how much you need to work.

Online teaching

Times of recession have often seen an increase in DIY activity, whether it’s a homeowner trying to fix a leaky pipe or a business wanting to update a website. These do-it-yourselfers often turn to YouTube or other online channels to learn how to do things they would otherwise have to pay for, so online education providers often find recession times are good for business. .

home repair

When money is tight, people are more likely to want to fix what they have rather than buy something new. If a cash-strapped homeowner can just replace a few boards on their deck instead of having a whole new deck built, they’re likely to. Additionally, for homeowners who may need to sell their home during a recession, ensuring that all necessary repairs are made can make the home more attractive to potential buyers.

Car repair

In times of recession, drivers are more likely to want to repair their current car and keep driving it, rather than incurring the expense of buying a new one. This leads to more business for auto repair shops as people try to keep their cars running longer so they don’t have to replace them.

Resale online

Reselling expensive clothes and accessories has long been a popular way to make money. But doing it on the internet gives you a much larger audience. After all, that sequined purple boa might not find a new home in your town, but for someone in another part of the country, it might be just what they’re looking for. With consumers looking for quality goods and clothing at a great price, resale tends to gain popularity during a recession.

social media influencer

When consumer budgets are smaller, companies need to be more innovative to find new customers. They can turn to social media influencers – those who have many social media followers who use them to promote products and get paid for it. Since a social media influencer’s capacity is only limited by the number of posts they can produce, if new businesses seek their services, they can usually accommodate them.

Food and drink

Even in a recession, everyone needs to eat. While high-end restaurants and bars may feel the pinch, grocery stores and more affordable eateries may see business surge as people look for more economical ways to eat.

Which sectors are not affected by the recession?

Defensive industries are those that do well regardless of consumer spending. Two of the largest industries not affected by the recession are:

Health care

People need health care, regardless of the state of the economy. While some people may be able to postpone cosmetic or elective procedures, health care is generally quite invulnerable to economic conditions. Hospitals still need to operate, so they need to be staffed, and consumers will still do what they need to do to take care of their health.

Government

The government establishes its budgets well in advance and provides the necessary services. Since the government is financed by taxes, it only needs to cut if tax revenues are reduced significantly.

Final take

While experiencing a recession can be scary, recessions come and go, so factor that into any decisions you make during a recession. That said, knowledge is power, so knowing how a recession affects different industries will always come in handy.

Information is accurate as of July 16, 2022.

Our in-house research team and on-site financial experts work together to create accurate, unbiased and up-to-date content. We check every stat, quote and fact using trusted primary resources to ensure that the information we provide is correct. You can read more about GOBankingRates processes and standards in our Editorial Policy.

About the Author

Karen Doyle is a personal finance writer with over 20 years of experience writing about investing, money management, and financial planning. His work has appeared on numerous news and finance websites, including GOBankingRates, Yahoo! Finance, MSN, USA Today, CNBC, Equifax.com, and more.

Leave a Reply