What makes a business recession-proof?
Only industries that are recession-proof have survived this economic crisis. These are the industries that provide the most basic services and products for the population. They are likely to thrive and resist the effects of the crisis because consumers demand their trade, despite being financially stressed.
The coronavirus, a global health crisis that continues to cause recession and deaths around the world, has been causing economic devastation for more than a decade. Despite this terrible event, there are still opportunities to create new opportunities and overcome obstacles.
Disney is an example. The Great Depression was the time when Disney was founded. The Disney brothers saw the need to lift America up again, even in times of despair. This opportunity allowed them to successfully overcome the challenges of the recession and grow their business.
In times of recession, investors, individuals, and businesses alike can re-evaluate their options and seek refuge in so-called recession-proof businesses.
These are the top 5 recession-proof businesses that can help you get through this difficult period.
1. Grocery and Food Stores
It is not surprising that the food industry and grocery shops thrive during economic downturns. In a recession, profits in grocery stores, food chains and stores are fairly stable.
A good example is the frozen coffee and meal sector. The total sales of frozen meal companies increased by 4.8%. The retail coffee market saw a 6% increase, which is a significant growth from the initial forecast of only 2%. There is no crisis that will stop people eating and drinking, even if there is an apocalypse.
This sector could still be affected by the recession’s effects, however. The last recession saw a decrease in food spending by 7 percent for each household. This could be due to consumers being more inclined to purchase discounted or cheaper items to reduce their expenses. However, the reality is that food spending can only be cut so much.
It is interesting to note that consumers’ eating habits in times of crisis are increased and triggered. When stressed, people tend to crave sweets and alcohol more. During the Great Depression, Snickers and Mars chocolate bars were created. According to reports, Cadbury chocolate sales have increased by 30% and McDonald’s has seen remarkable growth during the 2008 recession. The food industry is therefore one of the most resilient to recession.
There’s a reason logistics is often called a “recession-proof” industry. Regardless of the state of the economy, people always need things delivered, people need to move houses and businesses always need to get their products to market. We saw during the COVID19 pandemic that a work from home order, created an influx of people migrating out of big cities and into coast areas like the Gold Coast. Demand for removalists Gold Coast is at an all-time high. As a result, logistics professionals can usually count on steady employment even in tough times. But what are the specific reasons logistics is so recession-resistant?
COVID-19 has changed the way we think about many things, including logistics. Logistics is now seen as an essential service, delivering food around the clock to those who need it. This pandemic has shown us just how vital logistics is to our society.
1) The demand for logistical services remains strong throughout economic cycles.
2) Limited overcapacity: Most transportation and warehousing industries are very capital-intensive, so it can be difficult for new players to enter the market and compete. This limits excess capacity.
In any pandemic or war, it creates civil unrest. Lockdowns and uncertainty affect global supply chains and transport companies become inundated. This is where global demand soars and the time taken to deliver, ship or freight commodities across the global multiplies. Suddenly, logistical companies have a hard time to deal with the sudden increase in demand.
3. Financial Advisors
Have you noticed that there are more and more financial advisers and money managers emerging from the shadows lately? Their simple reason is that they are in the business people will need when the market falls. Their work was designed to withstand this economic storm.
Investors and wealthy people want to protect their wealth and ensure that they are well cared for during difficult times, just like business owners.
It’s natural to feel anxious and defensive about our resources when there is an economic crisis. Financial advisors are often in high demand and this is when they rise in their career. Investors and retirees will benefit from their sound advice when choosing the right type of investment account.
4. Accounting and Tax Services
Another sector that thrives in recessions is the accounting industry. Businesses should have a solid accounting and bookkeeping system in place during recessions.
A business’s first instinct in times of economic decline is to reduce costs and maintain its finances. Many will require an accounting consultant when cash flows are tightened. An accountant can help a company with financial problems. They will be able to assess the business’s finances, determine how best to manage resources, and offer sound advice.
It is tempting to forget about taxes! But no matter what recession you are in, taxes have to be paid on time. Otherwise, you will suffer the consequences.
A person or business could end up doing bookkeeping by themselves thinking it will save them money. Although it may seem like a quick win there is a lot of risk involved. Miscalculations could backfire and cause more trouble later.
It is a safe decision, especially in difficult times, to trust a qualified accountant to do the job while you concentrate and target revenue.
The telecom industry, along with information technology, is here to stay, regardless of the economy. The COVID-19 crisis’ repercussions only confirmed the importance of this industry.
To communicate online, people need to have their phones. The industry became closely linked to the global economy. People are interested in learning the native language of clients because they are interconnected globally. Online industries have flourished along with the innovations in the telecom industry.
Many people have the opportunity to make money online and to learn new skills without having to leave their home. People can also sell items online because of this industry.
Universities were also influenced by the pandemic to follow this path. Along with the rapid rise in study materials since social distancing was instituted, telecommunication became an essential requirement for educational institutions.
Although some customers may have downgraded their units in the wake of the pandemic, telecommunications continue to thrive and is proving itself to be one top recession-proof business, in particular Voice Over IP setups which can dramatically decrease the costs of a company’s telecommunication bills. This industry has already demonstrated its effectiveness before the pandemic, and will continue to play an important part in today’s global crisis.
6. Information Technology
I.T. is a vital part of the modern technological world. It is a highly sought-after profession. It is the main job that drives innovation and leads to business success. The current recession is actually one of the main reasons for high online traffic, which leads to an increase sales.
Every department of the business world relies on information technology for optimising their work systems, strategy, and operations. A business cannot function without information technology. The I.T. is vital during this crisis. The I.T. industry has a lot to offer businesses, now that it is fully accepted. Many offices are now allowing employees to work from home.
Information technology is also a key element in the development of international trade and markets. Businesses that use information technology to invest in related assets can be closer to the international markets, potentially increasing sales even during a recession.
Even further, we will say that all industries today need to use information technology to improve productivity. Their services are valuable for offices. Businesses that resist technological advances will face a dark future.