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10 Recession-Proof Businesses You Should Consider


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Many assume that a recession is a terrible time to start a business. Thankfully, the opposite can be true with careful planning. Recessions create less competition, which is a big advantage for an upcoming business. Still, you need a recession-proof business strategy to see results.

If you’re already a business owner, a looming recession might be the right time to rethink your strategy or add new offers. People love discounts during economically tough times and you could expand your products or services into some of the following recession-proof avenues.

We’ll explore what it means to be a recession-proof business. We’ll also take a look at 10 recession-proof industries and give you some ideas on how to recession-proof your business.


What is a Recession-Proof Business?

Put simply, recession-proof businesses offer consistently in-demand goods or services. People focus on saving money during a recession, so they’re less likely to splurge on luxuries. Yet, they will always need to buy certain things, no matter their economic situation.

Some goods and services are obvious. Food, health care, and housing are safe industries during an economic downturn. However, other types of businesses can reorient their marketing to stay afloat when a recession hits.

For instance, many cosmetic, fashion, and entertainment companies angle themselves as affordable luxuries when consumer spending is tight.

Our list of businesses that are recession-proof will include both necessities and accessible luxuries that increase in demand during a recession.


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10 Recession-Proof Business Ideas

1. Grocery Stores

When someone asks “what is the best recession-proof business?” the answer they’ll probably get is a grocery store. People always need to eat, and during a recession, they spend less on take-out and restaurants. Bulk buying also increases when customers are uncertain of their economic futures. Both phenomena make grocery sales soar.


2. Health Products

Health products, like cosmetics and vitamins, are always needed. They can be found in pharmacies or medical treatment clinics, but selling personal hygiene, dental care, or fitness products in your own space, like a convenience store, are also good options.


3. Confectionery or Liquor

In the Great Recession of 2008, Cadbury broke sales records. Small luxuries, like candy, baked goods, and alcohol, spike during uncertain times. The Great Depression of the 1930s saw a similar trend and many well-known candy bars were created in that period.

People seek comfort in these little luxuries when stress is high—and these are often the most affordable options.


4. Baby Products

As long as people have kids, people will need childcare products. Like groceries and healthcare, baby products are a fairly steady industry. Expanding your business to childcare services may also be worthwhile. Many parents work extra hours to make ends meet during times of economic hardship.


What is a Recession-Proof Business


5. Pet Products

The pet industry is booming. Many people get pets as a source of comfort during hard times. The industry is currently in a time of incredible growth. Pet expenditures in the US skyrocketed from $50.96 billion in 2011 to $109.5 billion in 2020. The 2020s are the first time in history that the pet industry was worth over $100 billion.


6. Accounting Services

The more people worry about their financial futures, the more interested they are in expert financial advice. Even in the best of times, most people dread doing their own taxes. If you have the expertise to provide this service, you have an excellent recession-proof option.


7. Auto Repairs

Even though private car ownership is declining, those who own cars will always need repairs. Opening an auto repair business is a fairly safe bet during a recession.

Modern cars have electronic systems that are not generally repairable by a novice and will require a knowledgeable and skilled mechanic more than ever. Most car owners prefer an expert hand who can keep their vehicle in tip-top shape.


8. Real Estate

Despite endless headlines about the housing market, real estate sales are soaring. Economic hardships often force people to downsize or move to a more affordable neighborhood. It’s the right time for real estate agents to take advantage of this shift. Many people are looking for expert advice on finding a home that fits their lifestyle and budget.


9. Home Improvement

Many reduce how much they travel or otherwise go out less when they’re saving money. As a result, they start thinking more about their home. This leads to a higher demand for home renovations. Some may take a hands-on approach to keep themselves occupied, but you can angle yourself as an expert consultant who makes their home renovation project better.


10. Logistics

Getting into logistics is also one of the best recession-proof business options. (Cargo delivery, for example.) Mail needs to get delivered, and all of those grocery stores and healthcare firms need to get their shipments from somewhere. People also tend to buy goods more often than services during recession periods, which increases the demand for efficient logistics.


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How to Make Your Business Recession-Proof

The industries we named tend to be more resilient during a recession, but any business can be supported through a recession. Even the most recession-proof business can fail if its owner neglects best practices.

Here are some tips on how you can recession-proof your business, no matter your industry.


1. Prepare Early

Don’t wait until you’re in the middle of a recession to start making adjustments. The moment you see one on the horizon, start planning. A few things you can do in the face of an oncoming recession are:

  • Build up your cash reserves
  • Strategically time your inventory purchases
  • Verify your insurance coverage
  • Diversify your revenue streams
  • Be innovative with your workforce—make cuts as a last resort
  • Have an emergency plan in place in case you need to drastically cut spending


2. Boost Your Marketing

When companies cut costs, marketing is usually the first to go. This is a huge mistake. Strategic, tailored marketing campaigns are critical during a recession. Better marketing campaigns lead to more sales and modern consumers simply don’t trust outbound sales tactics like cold calling.


Recession-Proof Business

Source: New Perspectives


According to research, salespeople are perceived as some of the least trustworthy professionals. Although marketers also score low, consumers don’t speak directly to marketers. Good marketing campaigns gently encourage the consumer to make their own purchasing decisions.


3. Match Your Expenses to Your Sales

To make your business recession-proof, it’s not only important to have higher cash reserves, but also to link all business expenses with corresponding sales. Avoid using reserve funds to finance daily operations. Instead, try to cover daily costs using the revenue generated within the same period.

By linking your expenses to sales, you can better manage your cash flow and ensure that you only spend when you have the revenue to cover it. This strategy also lets you preserve your cash reserves for unexpected events that may arise during a recession.


4. Keep Your Overhead Low

Job loss is a major fear during recessions. You can try to mitigate this fear as much as possible by keeping your overhead low. Avoid onboarding new hires when there’s an incoming recession. If you need extra help, look towards part-time workers and freelancers until you’re in a better place to assure job security.

Keeping overhead costs minimal decreases the chances that you’ll be forced to let go of full-time employees. If you do hire new workers, prioritize quality over quantity. This helps save on training costs and reduces the risk of lay-offs.


5. Nurture Customer Retention

New leads always help generate new revenue, but be mindful not to push new lead generation at the expense of customer retention. Do what you can to ensure customer satisfaction with the products or services you offer.

Consider offering discounts or running promotions specifically for your existing customers. Implementing a loyalty program that rewards repeat business can also be effective. This approach will increase the likelihood of them remaining loyal to your business and recommending it to others.


How to Make Your Business Recession-Proof


6. Consider a Small Business Loan

Small business loans can provide the necessary financial support you need to maintain cash flow and meet financial obligations. They may also help build credit scores, which are crucial for securing future financing.

Perhaps surprisingly, taking out a small business loan during a recession can present growth opportunities. Recessions create unique opportunities to pivot or expand operations. However, capital is required to do so. Your small business loan can go towards new projects, operations, or inventory to boost your bottom line.


What Kind of Loan Will Recession-Proof My Business?

Credibly works with you to determine right-size financing for your business.

We offer capital loans, merchant cash advances, long-term business loans, business lines of credit, and other financing options.

Have questions or are interested in learning more about our financing opportunities?

Our financing experts are ready to help.

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We recognize the unique financial needs of your business. Although we don’t provide mezzanine financing, we’re equipped to help you assess if this is the right path for you.

Our commitment is to understand your business’s potential beyond just the numbers. We’re here to offer insights and guidance—not just financing.
If you’re considering your next financial move and wondering if mezzanine financing fits your growth strategy, let’s discuss your options.

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