While there are many different types of companies that have
their revenues subject to economic fluctuation, there are a number of
businesses that are generally considered to be recession proof. In this article
we take a look at the different types of companies that always tend to generate
substantial revenues and profits in any economic climate.
Accounting and bookkeeping services
Given the complexities of tax laws as well as the difficulty in maintaining a
proper set of financial records, accountants, bookkeepers, CPAs, and enrolled
agents are always able to generate revenues for their services. Regardless of
how the economy is doing, people are always going to be required to file tax
returns to both federal and state taxing authorities. As such, the demand for
these services does not wane during economic difficulties. These businesses are
able to generate very high gross margins from the per hour fees that are
associated with completing bookkeeping, managing payroll, filing tax returns,
and engaging in other activities that are common to this type of business.
Funeral Homes
It is the unfortunate fact of life that everyone will pass away at some point.
Even during times of economic recession, people will continue to pass away and
require the services of funeral homes and funeral director businesses. These
companies are always able to generate substantial revenues from mortician
services, sales of caskets, cremation services, as well as making arrangements
for funeral services. These businesses typically are the most stable industry
given the fact that they are able to thrive in any economic climate. The start
up expenses associated with the new funeral home are considered to moderate,
and these businesses – given their strong level of economic stability – have
readily available access to capital from banks and financial institutions.
Almost all lenders are willing to provide the necessary money needed to
establish a new funeral home business.
Healthcare Practices
Healthcare practices which include doctors, dentists, nurse practitioners, and
allied healthcare professionals are always able to produce substantial income
for their owners given the demand for the services in any economic climate. One
of the interesting aspects of this type of business is that they enjoy very
high barriers to entry given the fact that the practitioner must have completed
a substantial amount of education while conforming to a number of licensing
requirements. As such, this is not a business that can readily be started by
any individual that is looking to become an entrepreneur. As it relates to
licensed healthcare practitioner seeking to establish their own practices,
almost all financial institutions are willing to provide nearly 100% of the
capital necessary in order to establish a new medical, dental, physical
therapy, surgical, or related healthcare business.
Information Technology
Given the ubiquitous nature of the Internet and secure information technology
networks, the demand for IT consulting firms and IT networking companies is
substantial. These companies always generate highly recurring streams of
revenue given that they typically operate on a month-to-month service contract
with their clients. For entrepreneur that is looking to establish a recession
proof business, this is an outstanding opportunity. There is no formal
licensing or educational requirements in order for company to hold itself out
as an IT consulting firm. Additionally, many of the instructional courses
needed in order to provide comprehensive IT services can be acquired from a
local community college. Additionally, there are substantial online resources
where an individual can quickly become trained in the field of information
technology. These businesses have minimal startup costs, and they can be started
for as little as $10,000 if the owner-operator establishes a very small office
and primarily works at the site of clients.
This is one of the fastest growing industries within the United States,
and it will continue to become one of the largest and most profitable industries
over the next 20 years.
Pet Care Businesses
As many people own dogs and cats, the demand for comprehensive dog walking, pet
sitting, and general pet care businesses is substantial. Yearly, more than $50 billion
is generated on services specific for pets that live in the homes of their
owners. These businesses have next to no startup costs given that an individual
can simply establish a small website, distribute business cards, and post
flyers in community centers in order to create a local brand-name. Once
established, these businesses are able to generate highly predictable streams
of revenue from the daily services rendered to the client base. Additionally,
these businesses are very scalable as additional pet care technicians can be
hired to render services to a greater number of clients.
Retail Entertainment Businesses
Although retail entertainment businesses, such as arcades, bars, and related
entities offer a service that is not a necessity – these businesses are almost
always able to generate substantial revenues and profits given that they are
low-cost form of entertainment. During sharp economic declines, many people
will opt to go to retail entertainment facilities rather than taking an
expensive vacation. As such, the high gross margins generated from services
allow these businesses to provide entertainment that is affordable in all
economic climates. One of the recent trends among these businesses, especially
among arcades, is to develop a membership base that allows individuals to pay
monthly fee in exchange for being able to access the facility on an ongoing
basis. These recurring streams of revenue further add to the economic stability
of these companies.
Commercial Cleaning Services
Most commercial enterprises need to have clean and neat offices in order to
attract a customer base. Most commercial cleaning businesses often provide
their services on a monthly contract basis, which allows them to generate
highly recurring streams of revenue. Additionally, many wealthier homeowners –
who are less swayed by negative changes in the economy – are typically always
able to afford in-home cleaning services. As such, these businesses are
generally able to remain profitable at all times given their strong demand
among commercial, residential, and industrial clients. These businesses do have
moderate sort of costs, but these companies can be found for about $50,000
depending on the type of equipment and vehicles that we purchased for the start
up.
Specialized Contractors
In any economic climate, individuals are going to continue to have issues with
their homes and buildings that they own. As such, most contracting focus
businesses are able to continue to remain profitable in any economic climate.
It is no secret that homes will often have certain appliances and systems that
break down, and regardless of how the economy is doing – people are going to
need repair services for the systems. Specific types of contracting businesses
attend always remain profitable include HVAC contractors, roofing contractors,
plumbers, electrical contracting businesses.
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