Starting a Business in a Recession

Starting a recession proof business is an excellent option for business minded people who are seeking a safety net when the economy takes a dip. According to the Bureau of Labor Statistics the unemployment rate rose to 10% in 2008, leaving millions of people in America desperate to find ways to take care of themselves and their families. 

During this period, many people pulled money out of the stock market looking for safe investment opportunities that would keep their money working for them while they weathered the storm. Many started recession-proof businesses and found by doing so that they had made the right decision.

Knowing where to start is usually the biggest hurdle for many entrepreneurs. There are some things you definitely need to know and plan for. Certainly you need to decide on what specific recession-proof business will be the best one for your particular situation. The good news is it’s totally possible to start a recession-proof in America regardless of your financial means or skillset. 

There are a variety of recession-proof businesses you can run that require little money to get started, or fewer necessary skills, and even less formal education. Due to the wide variety of recession-proof businesses you can choose from, most of them can be started with a little research, some upfront planning, and a good positive attitude. 

We’ve broken down our favorite recession proof business ideas into nine categories and provided proof that each business has held up or even thrived during a major recession, the required skill level necessary to be successful, and the earning potential to help you decide which business idea is actually right for you.

1. Health and Senior Services

nurse wrapping a patients arm in gauze

Health care spending in the United States grew at a rate of 4.2% from 2008 to 2012. After the recession of the early 2000s, the health care sector grew a whopping 8.8 percent.

This business is ideal for service-minded people who can work with the elderly and sick, but also anyone wanting to improve their health to ensure they don’t get sick in the future. Health and Senior Service business owners usually have a degree in a health related field or previous experience working in a healthcare setting.

Startup expenses for a senior nutrition business can be relatively low, but they normally include the cost of marketing collateral and advertising. You can expect you’ll need some type of professional space to meet with seniors or their family members, or you could go the route of meeting them directly in their homes. Growth prospects for the business are high due to the large population of baby boomers who will eventually need these specialty services.

This field is wide-open and certainly there are a lot of areas you could focus on. The example of starting a senior nutrition business is just one route you might take. Additionally you may wish to start a private hospital or a health and wellness center or even a gym. Each of these businesses will have different requirements in terms of startup capital and regulations but the health and senior services industry is recession-proof and a safe bet for anyone wishing to continue generating profits when confronted with a recessionary period.

Learn how to start these health and senior services businesses:

2. Retail Consignments

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The National Association of Resale & Thrift Shops, being the second-largest resale trade association, surveyed its membership regarding sales from 2008 to 2009, which was a period of recession. A total of 263 stores responded to the survey, with more than 64.1 percent stating that sales increased. Store owners have noted that the increase was approximately 31 percent.

Retail consignment businesses are ideal for those on a budget or with less money to start a business, not to mention a great business for people who enjoy working within the four walls of a brick and mortar retail establishment. It’s a niche specialty market focused on connecting sellers with buyers, but there’s room for financial gain by being the middle-person.

This consignment business requires a place to house other people’s used items, as well as racks and shelves for storing these items and you’ll need someone there (likely yourself) to check people out and help them whenever they have questions or need help with an item, which can be a little taxing if you’re the type of person who prefers to bounce around a lot. With a regular stream of customers coming into your shop, you could expect profits of around $70,000 to $250,000 per year.

Learn how to start a retail consignment business.

3. Convenience Store

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Convenience stores tend to charge more than other discounted retailers (think: Dollar General or Wal-Mart); however, convenience stores also tend to sell a lot of alcoholic beverages, cigarettes and tobacco, a variety of hot and cold drinks, and basic grocery staples and small indulgences like donuts and sweets, so they tend to do well even during periods of recession. The items just mentioned are products that people tend to consume more of during periods of recession. In fact, during recessions, research has found that consumers spend less total dollars on alcohol and other vices. However, the total quantity of consumption increases. This is likely due to an increase in people buying more substantial amounts of these products.

Starting a convenience store is an excellent business venture for individuals who have a good location in mind and who enjoy working with the public. That said, previous experience working in a gas station or convenience store would be really helpful and management experience is helpful to have under your belt as well. Growth potential may be lower given the number of convenience stores in existence, but there are many different ways you can differentiate yourself from the competition and you could focus on finding a prime location, that is, and where there are few other convenience stores around.

Startup costs include an array of considerations and the largest expense will be the cost of the location. Important considerations can include, are you buying the building? If not, are the rents too high to make a significant profit, and are you going to get enough drive-by traffic to make it at the location? Earning potential for convenience stores varies a lot depending on if you plan to serve hot food items (pizza, chicken, potato wedges, etc.), will you sell gasoline, will you stay open 24 hours a day and need employees or will you run the business yourself day in and day out. 

Learn how to start a convenience store business.

4. Information Technology

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Indeed, the information technology (IT) bubble played a crucial role in the recession of the early 2000s. However, IT was found to be the fastest-growing sector in the US before, during, and after the recession of 2007-2009. Software firms and new hardware seem to not be phased at all whereas a down economy is concerned. For this reason, you may want to put your energy into starting your own software company or web development firm. 

The information technology business is a good fit for people with advanced training in computer science, web engineering, and computer hardware, and a desire to continue to build on their existing skillset or hire individuals to help them build the business. Formal education related to information technology can be a 4 year computer science degree from a reputable university or a six-week coding boot camp and a passion for working with computers and other technologies is helpful but not essential. You can always learn as you go, but we don’t recommend it as technology is something you really should have an interest in and some passion for.

A technology business can be started at a relatively low cost, although startup expenses do include some advertising and marketing expense, some type of workspace, and certainly a computer  (if you don’t already one of these), as well as a phone and website. Since ongoing costs can be kept low, an information technology firm can easily turn into a high million-figure opportunity.


Learn how to start these information technology businesses:

5. Candy & Comfort Food

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If you’ve ever wanted to take your baking and candy making skills to market, you’ll be happy to learn that these types of small indulgences are boosted when recessions happen. Starting a small corner candy shop or a donut shop might keep the lights on and the bills paid up whenever a recession happens to shock the economy. You’ll be surprised to learn that in the US, candy consumption skyrocketed during the Great Recession. A report by the New York Times found that Cadbury's profits were actually up 30 percent in 2008, and Nestle experienced a sizable 10.9 percent growth.

Working with food requires both passion and entrepreneurial drive. Certain food business niches (particularly candy and donut shops) are growing at a moderate rate, meaning the work can be fairly sustainable during a recession. In order to get started, you’ll need a good business plan and sense of direction such as a where you’ll be located, will you sell to other businesses (like the convenience stores mentioned above), and a good bank balance or at the minimum some funding to get you started, as well as knack for cooking and the ability to do this work day-in-and-day-out.

Donut shops tend to charge between $5 and $15 per dozen donuts, but ultimately your earning potential will depend on how many you can make and sell during business hours, if you can win and retain new customers, the quality of your donuts, and the sales direction you decide to focus on. Donut shops can thrive on partnerships with other businesses and do well if they can keep their prices fair and quality high. Who doesn’t love a good donut? Come on, it’s comfort food! Everybody needs a little comfort, especially during a recession when everybody feels the stress and fear of uncertainty.

Learn how to start these candy and comfort food businesses:

6. Grocery Stores

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When people cannot afford to eat-out, they tend to do a lot more cooking in the home. For this reason people tend to spend more at grocery stores. Throughout the Great Recession, the USDA found that Americans significantly cut back their spending on food away from home. Instead, they chose to buy groceries and cook food at home. Grocery store spending grew a steady 8 percent throughout the Great Recession.

Hardworking, business-savvy individuals are great candidates for a grocery store business, which is another one of many recession-proof business ideas. People have to eat and when they cannot afford to eat out, they spend at the local grocery store, so your job is to make food easy to come by for them. While it’s possible to get into this market as a beginner, having previous experience with managing a grocery store and relevant experience working with grocery software is a major plus.

The average small town grocery store makes around $60,000 up to around $300,000 or more per year, and the potential is even greater if you live in a heavily populated area. Of course, this may require spending more on building costs, which would mean a greater upfront and ongoing expense.

Learn how to start these grocery store businesses:

7. Child Care / Day Care

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One might think that during a recession child care centers would take a hit as more people are laid off work, more able to take care of their children full time. However, the numbers tell us differently. Child care will always remain a top priority for parents. The number of child care centers has been steadily increasing. There were a total of 86,212 centers in 1992, with that number jumping to 111,506 in 2001

If you enjoy taking care of children, a business opportunity that might delight you would be to start a day care facility. Ironically, birthrates tend to follow the flow during recessionary periods. As the economy contracts, so also do the birth rates in developed nations. But, keep in mind that just before a recession usually you see a trend of higher birth rates and thus the reason for more daycares. If you look back at 2007, just before the 2008 and 2009 recession, there were more births recorded than ever before in US history.

Child care centers, and daycares are initially a bit of work to set-up. Most daycares are self-sustaining once you get them up and going, so it’s important for the would-be business owner to understand that the biggest challenge is simply working around children. Anyone with a background in child development and enthusiasm for working around young children has the potential to turn a decent profit in this industry.

Daycares typically charge per child between $972 to over $1,500 per month, and of course, your earning potential is determined by how many children you are caring for day-in-and-day-out. The cost of insurance, rent on a building, and ensuring the business is kid-proof and safe, can be significant, but so can the profits. This trend is on the upswing, as many households are maintained by both parents working. During a recession it may be necessary for both parents to find work doing whatever they can and certainly for less money than they might make before the recession hit.

Learn how to start these childcare businesses:

8. Tattoo Parlors

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Tattoo parlors generally experience good sales during periods of recession. According to a poll, one in five Americans had a tattoo in 2012. This number increased by 7 percent from 2008. The trend seems to want to continue as more and more people are getting tattoos every year. 

Someone starting a tattoo business should love tattooing and have significant experience with tattooing and some artistic skills. Individuals who are willing to pay a higher price point for better quality tattoo artists are typically looking to enjoy a certain personal experience. However, selling tattoos and original body art items does not offer as much guaranteed return as some of the other recession-proof business ideas on this list. You have to make a name for yourself and build a portfolio and have a sanitary environment from which to work and know that your best advertising is your ink.

Startup costs are low, but it’s important to keep in mind that you may need to purchase a rented commercial location. An ambitious tattoo artist can gross up to $100,000 per year -- sometimes even more via owning a shop and having other talented tattoo artists work for you. This is a leveraged business model that requires you know your market and are able to control your expenses.

Learn how to start a tattoo parlor business.

9. Training and Tutoring Services

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As more and more Americans lost their jobs during the Great Recession, many of them opted to return to college. In 2007, a mere 1.9 million adults were enrolled in college. That number jumped to a whopping 2.3 million by 2011.

Training and tutoring services businesses are started by self-motivated individuals with a deep passion for teaching and training others. Most training and tutoring professionals start out as one-on-one tutors helping students in their classes with their school work, and often already have the necessary education and teaching expertise at their disposal -- which typically makes their startup costs low.

The tutoring industry is massive and offers considerable opportunities for someone to make a consistent income regardless of the economy and what it’s doing, but earning potential depends largely on your area of specialty, the number of subjects you can tutor someone in, and the direction you decide to go. You can start a tutoring company by simply hanging out at a local university and meeting with clients on campus to help them out or you can rent a brick and mortar location in a shopping center area and hire educators to tutor larger numbers of students from varying grade levels. Since more and more older adults tend to go back to college during a recession, tutoring seems like a very promising option for starting a recession-proof business.

Learn how to start these training and tutoring businesses: