Some businesses continue to thrive even during the most adverse conditions. During economic downturns, like the one caused by the recent pandemic, people usually cut back on their spending.
Businesses that do well during recessions either provide goods or services that increase in demand, supply basic needs, or alternatives to luxury products. Even though these industries mentioned below are most likely to have a lower risk of failing, remember, no business idea is ever guaranteed.
Interesting Time-Proof Businesses
Creating opportunities, even in the most difficult times, is not impossible. One example: the entertainment giant founded during the Great Depression, Walt Disney. During difficult times, everyone needs cheering up, and that was the opportunity that allowed them to grow.
Together with accountants, financial advisers, and health providers, three services essential to everyone at all times, here are 5 other interesting time-proof businesses:
#1- Baby’s and Children’s Necessities
Sellers of baby essentials (diapers, milk, etc.), children’s toys, and clothes for these age groups fall into the category of time-proof businesses. This is because parents always want to provide these basics for their children. This was shown recently with the pandemic when the total sales of toys in the U.S grew by 27%.
#2 – Home and Car Maintenance
During recessions, people don’t easily sell their homes or cars. Therefore, the solution is to use an auto repair provider and do home maintenance, leading to a greater demand for businesses in these fields. Spending a few hundred dollars on a car repair is far more practical than paying that money monthly for loan repayments.
Companies providing materials and tools for home improvements and maintenance also rake in the cash during recessions. This also applies to appliance repair services. Unfortunately, builders suffer the consequences since there is a drop in the demand for homes.
#3 -Food and Grocery Stores
Everybody needs to eat, even during a recession. That is why the food industry continues to be considered a time-proof business. Profits earned in grocery stores and food chains tend to remain steady. As the recent crisis showed, the frozen meal and coffee sectors saw substantial growth, surpassing the figures initially forecast.
During the previous decade’s recession, spending on food declined by 7%. Since consumers cannot stop spending on food, they preferred to buy discounted items or cheaper alternatives like no-name brands. This drop is rather small when drops in other industries are taken into consideration.
Other food-related habits that increase during troubled times are the sales of sweets and alcohol. It was during the Great Depression that Snickers and Mars bars, were created, and they went on to become popular candy bars. During the recession of 2008, Cadbury’s reported a surge of 30% and McDonald’s also experienced remarkable growth.
#4 Communications and IT
IT and its ability to help businesses grow is proving to be a time-proof business. Growth and international trade rely on software systems that help to increase sales productivity. Hardly any business on the planet today can run without technological advancements, even for those people working from home.
This last recession once again proved the importance of telecommunications. This time around, billions of people around the world were able to continue working, studying, and helping their children cover their school syllabuses because of their ability to communicate by phone and online.
#5 Shopping, E-commerce, and Couriers
People do cut back on luxuries doing a recession, but that doesn’t mean they aren’t looking for a bargain. During the 2008 recession, discount stores like Walmart, Dollar Tree, etc., saw some high returns. Additionally, there is a theory that cosmetics sales rise during tough times because they are considered affordable luxuries.
Thanks to discount retailers and eCommerce, shoppers continue to shop during a recession, even if it is for cheaper items. During the pandemic, with the rise in e-shopping and delivery services, the freight, courier, and delivery industries grew enormously. It is predicted that these services will continue to prosper since they have adapted their services to offer more than business-to-customer, having included business-to-business markets too.
Recessions are difficult for all businesses, but some are better geared to surviving because of the products they sell. During a recession, level-headed planning, as opposed to panic, is the best approach, ensuring the survival of a business.