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11 Best Recession-Proof Business Ideas to Start

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It’s becoming increasingly likely that America is headed for a recession, an extended period of time marked by a decrease in GDP, employment rates, income, spending, and other economic activity. If true, this would be the first recession since the Great Recession of 2009.

Tapping into your expertise to start a recession-proof business can help you weather the storm. Some business ideas are service-based and help clients and customers, even as the U.S. economy slows down. Other recession-resistant businesses provide staples that customers need on an ongoing basis.

Consider opening one of the following types of businesses if you’re looking to hedge against a coming recession — or to take advantage of some new skills you picked up during lockdown in the COVID-19 pandemic.

Best Recession-Proof Business Ideas to Start

During a recession and economic downturn, consumers tend to cut spending. This translates to less disposable income, which means consumers prioritize necessities and forgo more expensive luxuries.

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Recession-resistant businesses require:

  • Products or services with consistent and steady demand
  • Little to no initial investment
  • Low overhead that’s easy to budget for

This approach ensures that you’re always offering something your market needs, aren’t taking on substantial debt (which can be tied to increasing interest rates and negatively impacted by inflation), and aren’t susceptible to significant fluctuations in your business expenses.

Let’s look at some of the best-performing recession-proof businesses to consider opening.

1. Health Care

The global pandemic, and the economic recession that may follow, changed consumer health care demands. Because the need for health care is constant, health-based businesses are often considered recession-proof, even as the industry evolves.

In fact, according to the U.S. Bureau of Labor Statistics, the health care industry fared well during the last recession, with employment rising by 6.6% and wages increasing by 7.8% during the downturn.

The changes precipitated by COVID-19 and the growing economic concerns have created opportunities for entrepreneurs to launch health care businesses like:

  • Home Health Services: Non-medical care that includes caregiving, cleaning, companionship, and general help around the home
  • Childbirth Services: Midwife and doula services that assist mothers-to-be and new mothers with childbirth, pregnancy, and post-natal care
  • Mental Health Services: Services that include addiction recovery and support, counseling, and therapy
  • Home Nursing: Private nursing care with a focus on medical assistance and support
  • Wellness Coaching: Advice, guidance, and support that helps clients improve their mental and physical well-being through behavioral, dietary, and lifestyle changes

By launching a recession-proof business in the health care industry, you’re protecting both your own finances as well as the mental and physical well-being of your community.

2. Discount Retailers

During difficult times, marked by rumors of a recession and increasing inflation, consumers are eager to get more bang for their buck. Discount stores like Dollar Tree operate as cheaper alternatives to luxury retailers while helping customers limit their expenditures.

Historically, an economic downturn helps discount retailers and grocery stores grow, as seen during the Great Recession. This happens because consumers shy away from e-commerce and traditional retailers in favor of cheaper products and goods.

Although opening a discount retailer can require some upfront investment for inventory and real estate, it’s still an effective business model for weathering harsh economic times.

  • Your Inventory Isn’t Necessarily “Trending”. Products sold in discount stores are often purchased from wholesalers off-season, so they retain value over time.
  • Commercial Real Estate Remains a Strong Investment During a Recession. The value of commercial real estate tends to grow during difficult times, so owning property can hedge against inflation. If you rent your storefront instead, consistent customer demand for your discount products and low expenditures can help you continue to make your payments.

As a result, your discount store becomes a fixture for your customer base. Helping customers purchase necessities at bargain prices helps you retain your customer base, providing them with consistent value even if the economy turns for the worst.

3. Consumer Staples

Some types of products are in constant demand. These consumer staples form an essential part of a customer’s budget, and are often necessary for survival or to maintain a minimum standard of living.

In a way, consumer staples are like staple foods. Where potatoes can be integral to so many dishes — both main courses and sides — consumer staples form a core part of a consumer’s life.

As an entrepreneur, stocking and selling these consumer staples can help you build a recession-proof business:

  • Groceries (food and beverages)
  • Household goods and cleaning products
  • Children’s goods
  • Toiletries and hygiene products (including cosmetics)
  • Alcohol and tobacco

Selling consumer staples doesn’t require a significant investment. Many of these products can be sold from venues such as convenience stores and other small neighborhood retailers, so you don’t need to purchase or rent a storefront with a sizable footprint or maintain vast amounts of inventory.

Additionally, consumer staples should make up at least part of what you sell in a discount store. This helps you deliver added value to your customers by meeting multiple needs.

4. Home Improvement

Home improvements can increase the value of a home — something that’s especially important when a recession threatens to do the opposite. As a result, home renovations can function as a sort of ointment that reduces the sting of an economic downturn.

But homeowners aren’t always DIY experts. In many cases, they can resemble Tim the Toolman Taylor far more than Bob Vila. After all, it’s easy for a weekend project to quickly turn into a month-long nightmare that results in an out-of-service bathroom, non-functional electrical outlet, or mismatched tile pattern that hurts the eyes.

Even if a homeowner is capable of handling a renovation alone, there’s frequently a need for specialist work. Some homeowners are fine with plumbing work but shy away from working with electricity — likely the result of watching their stubborn father get zapped repeatedly during their formative years (as this author can attest to).

Launch a recession-proof home improvement business by determining your specialties. Are you more of a handyman (or -woman), or do you have experience with drywalling, painting, or landscaping? Can you finish the projects an otherwise formidable DIYer might be hesitant to do on their own? Does the odd electrical zap excite you?

With adequate home improvement skills, you can help increase the value of homes in your community as you build a recession-resistant business.

5. Repairs

Things break. Sometimes it feels like things break even more when you’re woefully unprepared for it — like in the midst of a growing recession.

With the economy tightening everyone’s purse strings, consumers are more likely to try and fix something that’s broken rather than replacing it with something new. However, repairs can still be costly.

According to Angi, homeowners spent an average of $3,018 on home maintenance and $2,321 on home emergencies in 2021. Similarly, drivers are often forced to fork over a pretty penny to keep their vehicles roadworthy, especially once those vehicles pass the 14-year milestone, according to CarMD.

If you’re mechanically inclined, put your skills to work by starting a maintenance and repair business by providing services such as:

As motors burn out and screens fizzle and pop, your fix-it nature can save homeowners, drivers, and other customers heaps of money while helping you grow a recession-proof business.

6. Financial Advisors

The current recession, unlike its predecessor, didn’t begin because of a financial crisis. However, there’s no denying that the pandemic resulted in economic slowdowns and an increasingly volatile stock market.

This turmoil has wreaked havoc on the financial stability of many Americans. Lockdowns often led to lost or diminished wages, dwindling savings, and reduced growth rates of retirement accounts.

Navigating through all this can feel like a minefield, especially if the world of finance is detached from one’s day-to-day life. But if you know how to make sense of it all, filling the role of a financial advisor can help you launch a recession-proof business.

If you have the understanding, know-how, and required licenses and certifications for your state, your expertise and guidance can be invaluable to those looking for help. Some specific roles to consider include:

  • Accountant
  • Bookkeeper
  • Financial planner
  • Independent insurance agent
  • Tax preparer

Depending on your skills and preferences, you can target either or both individuals and businesses. Individuals and families need help stretching their income and planning for major purchases, college tuition for their children, and retirement. Small businesses may be looking to outsource a previously in-house role while balancing their cash flow.

7. Pet Care

About 23 million American households adopted a pet during the COVID-19 pandemic, according to The Washington Post. At the time, many employees were working from home and sought the companionship of a four-legged friend (or other variety of critter).

Fortunately, according to the ASPCA, the overwhelming majority of those households have opted to keep their newly adopted family members even as the country returns to a semblance of normalcy.

However, that also means someone needs to care for the animals that, for the bulk of the past two years, had constant attention from their owners.

Types of businesses revolving around our beloved animal companions include:

If you’re looking for a recession-resistant business that lets you play with cute critters, starting a pet care company blends the best of both worlds — almost like cats and dogs getting along.

8. Information Technology

COVID-19 prompted an evolution and widespread adoption of new technologies and apps. With social distancing forcing workers and students into the confines of their homes, services like Zoom saw its meeting participants grow by 2,900%.

And not all those new participants were professionals on the clock. Many were students, parents, and grandparents eager to communicate from afar.

Unfortunately, this rapid and widespread adoption of a new (to them) technology also introduced a heap of technical issues, particularly in groups of people unused to more advanced or modern devices.

As the pandemic fades away and the current recession grows, these technical issues remain. The result is an increase in demand for information technology services, with a focus on education, tech support, and repairs.

Recession-proof businesses in the IT field include:

  • IT consulting for small businesses
  • Networking and telecommunications
  • At-home or outsourced tech support
  • Computer repair and maintenance
  • Cybersecurity consulting

With tech continuing to improve and evolve, the information technology field will likely remain exciting and in demand.

9. Real Estate

In contrast to commercial real estate, which tends to remain strong during a recession, housing values can plummet. Although it’s still up for debate as to whether real estate will follow trends from the last recession, demand is still high.

Investors and landlords are investing in real estate. Some of these purchases may be short-term investments, but many are also great sources of passive income.

You don’t need to fork over thousands of dollars to benefit from the real estate market. In fact, you don’t need to purchase any property in the first place.

As landlords buy real estate and diversify their properties, the need for maintenance and management increases. After all, one person can’t handle all the work alone, especially as they scale their business.

This presents you with the opportunity to launch a property management company. Because real estate is a strong investment, you likely won’t struggle to find work. And if you expand your offerings to include on-site repairs, cleaning, and presale staging, you can further increase demand for your services — and position your business as recession-resistant.

10. Education and Tutoring

Social distancing and remote learning disrupted the traditional education system. This has left gaps in the education of some children — and even adults — who could benefit from focused, one-on-one tutoring that helps them catch up on lost learning.

In fact, these issues may only be the tip of the iceberg: the impact of the current recession on education and school funding may rival, or even surpass, the damage caused by the Great Recession.

Establishing an education or tutoring business can help offset some of the impact felt by families and students. The demand for specialized third-party education isn’t likely to diminish, either; there will always be students who’d benefit from extra learning, and the ability to pivot to other types of education can expand your client base.

11. Freelancing and Consulting

During economic downturns, companies cut costs by laying off staff. However, that doesn’t always translate to reduced needs: a company that fires its marketing team still requires promotional campaigns and materials.

Launching a freelance or consulting business lets you leverage your skills to fill in these gaps. In other cases, you can supplement a company’s existing teams without the company incurring all the costs of hiring a full-time employee.

Even better, there are almost no limits to the type of business you can launch as a freelancer. Although demand varies depending on your skillset, niche, and experience, consider becoming a freelancer in one of these roles:

  • Editor
  • Graphic designer
  • Programmer
  • Social media marketer
  • Web designer
  • Writer

Stepping into the role of a freelancer or consultant helps businesses benefit from your expertise on an as-needed basis. And because you can maintain a diverse roster of clients, you can hedge against the effects of a recession, even as your own business grows.

Final Word

It’s impossible to guarantee that a business is recession-proof. However, taking steps to ensure you’re targeting a market with consistent demand, offering value to your customer base, and providing quality goods or services can increase your chances of success.

Starting a business during a recession can be nerve-wracking, but it can also give you the edge you need to weather the storm.

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