Top 10 Recession-Proof Business Sectors

Alice Tuffery, writer

Published at 09/05/2019, Updated on 04/05/2022 , Reading time: 7 min

Top 10 Recession-Proof Business Sectors — Photo © recession-proof-businesses.jpg

No business venture is completely free from risk. But there are choices you can make to limit your chance of failure. Below, you’ll find a list of the most recession-proof business sectors.

When looking at business opportunities, you need to think about more than just their profit potential; you should be confident your chosen franchise will be able to survive economic changes. The most attractive ventures can survive a recession and keep making sales while others suffer or collapse.

Recessions can have a huge impact on the way people spend their money. Companies that start to suffer may be forced to alter their business strategies or make staff redundant. Between 2008 and 2013, the unemployment rate was at its highest point since 1995. Between August and October 2009 alone, the number of people without a job rose from 877,000 to almost 2.5 million.

A drastic reduction in staff members can massively impact a company’s productivity, so it’s in businesses’ best interests to make sure this doesn’t happen. But which sectors are safest if you want to maximise your chances of surviving economic crises?

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Top recession-proof business sectors

1. Businesses that sell essentials

Although most people try to cut down on their purchases during economically turbulent times, there are some things you just need to buy: food, shampoo, loo roll, laundry detergent. Some people might consider items like cosmetics, contraceptives and alcohol to be necessities too, and continue to visit the businesses selling them.

Browse grocery store franchise opportunities here.

2. Discount retailers

You only need to take a look at the recent changes to the supermarket sector to see just how successful discount stores have become. By avoiding famous brands and displaying products in their original crates, these businesses are able to save money and offer their customers lower prices. Whether you sell food, clothes or household items, you’re bound to attract savvy shoppers during times of economic recession.

In June 2008, The Independent reported ‘soaring’ sales at discount retailers. While Lidl’s sales grew by 12.8 percent – well above the growth rate of Sainsbury’s, Asda, Tesco and Morrisons – Aldi boosted its income by over 20 percent in just three months.

If you really want to safeguard your venture, why not combine this option with the one above? Selling essentials at better prices than your competitors can offer is almost always a safe bet when it comes to starting a robust business.

3. Health-related businesses

There will always be people who get ill and need medicine, treatment, care and support. Any business offering these products or services will be in constant demand, no matter the economic situation.

What’s more, in the UK, our ageing population will cause problems when demand exceeds capacity. We’ll always need more healthcare companies to support those who need it. And research suggests times of economic turmoil also have an impact on many people’s health. As City, University of London and King’s College London state:

The start of the recession was associated with worse dietary habits and increased BMI and obesity … In addition, there was an increase in the use of medicines and a higher likelihood of suffering [from] diabetes and mental health problems.

This suggests healthcare businesses should be in higher demand during recessions than ever. By launching your own company in the sector, you should benefit not only from consistent income, but also from the satisfaction of knowing you’re helping vulnerable people in your community.

Browse healthcare franchise opportunities here.

4. Commercial cleaning businesses

Many entrepreneurs overlook the cleaning sector because they believe people will simply start doing their own cleaning if they want to tighten the purse strings. This may be the case in the residential cleaning market, but not for commercial cleaning.

Official regulations state employers must provide a clean, hygienic workspace for their employees – and this means all offices, meeting rooms, toilets, kitchen areas and even storage areas must be cleaned regularly. Most business owners would lose money as opposed to saving it by spending time carrying out this extra work themselves. As a result, franchisees of cleaning businesses shouldn’t notice a significant drop in sales during recessions.

Browse commercial cleaning franchise opportunities here.

5. Repair and maintenance businesses

The majority of repair and maintenance businesses work on essential items people can’t afford to go without. From roofs to boilers, cars to leather boots, there are many items you could specialise in if you want to start a recession-resistant business. Companies contracting electricians, mechanics and builders, for example, are a great place to start your research.

Browse:

Car repair franchise opportunities here
Home improvement and construction franchise opportunities here
Electrical franchise opportunities here
Garden maintenance franchise opportunities here

6. ‘Make do and mend’ businesses

When people have less disposable income, they try to find ways of giving faulty belongings a new lease of life, rather than replacing them. While high-end clothing outlets and new furniture stores are likely to take a hit, companies that help repurpose items should become more popular among consumers. With this in mind, why not invest in businesses offering clothing alterations, furniture upcycling or home maintenance services?

Browse furniture repair franchise opportunities here.

7. Death and funeral services

Although it may sound morbid, funeral-related businesses are likely to prosper, regardless of the economic climate. Most people would be reluctant to compromise on a loved one’s funeral for the sake of saving a few pounds. If you get the formula right and set up a trusted funeral parlour with a positive reputation, you should be able to generate income all year round.

While funeral-related businesses are less likely to suffer in times of financial hardship than those in other sectors, they’re also expected to see rising demand in the coming years. According to the Office for National Statistics, around 600,000 people pass away every year in the UK, but this number is expected to reach 700,000 by 2040.

Browse funeral and death services franchise opportunities here.

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8. Education

Like the funeral sector, education should continue to operate fairly normally during economic crashes. Similarly, parents will be hesitant to sacrifice their child’s schooling to save a few pounds. But there’s an added factor here. When money’s tight, many people who would have sent their children to private schools opt instead for a state education, supplemented with private, after-school tutoring sessions.

In 2008, the Audit Commission said:

“One in 10 councils have seen higher demand for state school places for children that were previously educated privately. This was a particular problem in London with a third of London boroughs reporting higher demand."

So, your education franchise unit should be able to continue welcoming customers – and could even experience a boost in revenue – during tough times.

Browse education franchise opportunities here.

9. IT businesses

According to specialist recruiter Randstad Technologies, the IT sector weathered the economic recession of 2008-2009 better than any other sector. It says:

The growth in fin-tech jobs and IT security jobs [has] helped the tech sector do well compared to other industries.

As companies across the sectors seek new ways of streamlining their operational processes and maximising efficiency on a day-to-day basis, tech companies are in higher demand than ever. By developing or selling new, useful tools and equipment, you can make sure your business is always making sales.

Browse IT franchise opportunities here.

10. Home-based businesses

This isn’t strictly a business sector, but running a company from home can put you in a great position when it comes to surviving financial hardship. If you work from your own home office, you’ll minimise overheads by avoiding costly commercial rent and utilities. This should help you conserve money when your income reduces and keep operating for longer.

If you’re able to start your own home-based business in one of the sectors listed above, you can increase your chances of getting through economically turbulent times. The education and IT sectors lend themselves particularly well to home-based set-ups, and cleaning and repair businesses can be operated from a van, travelling to customers’ homes and workspace.

Browse home-based franchise opportunities here.

Get started

We’ve explored how to survive a recession and taken a closer look at some great recession-proof business ideas. These should help you in your decision, but you can find our whole catalogue of fantastic franchise opportunities – and all the information you need to get started – in our directory.