With gas and food prices skyrocketing, many economists believe we will enter a recession in 2023 — or may already be in one.
But not every business will be slammed by an economic downturn.
If you’re ready to take the plunge into entrepreneurship, starting a recession-proof business now can help you survive a recession and make great money in any economy.
What is a recession-proof business?
A recession-proof business will survive a period of time when the economy slows down, there are fewer jobs, and prices for homes, cars, and everyday goods increase (aka a recession). During a recession, a lot of businesses suffer because people typically spend and make less money.
Past recessions have forced many small businesses to close, but there have historically and statistically been certain industries that survive — and even thrive — in a bad economy.
What makes a business truly recession-proof? Our research, which we unpack below, found that businesses that fulfill basic needs like food, shelter, and water tend to be recession-proof, including grocery stores, plumbing, and HVAC companies.
Other recession-proof businesses might offer specialized services. For example, businesses like bookkeeping and accounting will always be necessary because individuals, corporations and small business need to pay taxes and manage finances during a recession.
Recession-proof business ideas
Before you start any business, there will be additional expenses related to creating a legal business structure, registering your business, purchasing insurance coverage, and acquiring necessary licenses and permits. The U.S. Small Business Administration (SBA) offers a business guide that goes into more detail.
Here are some of the best recession-proof businesses you can start now:
1. Home repair services
Harvard research found that people in the United States spend $400 billion on home improvement each year.
Plumbing businesses are considered recession-proof since most people can’t wait out a water leak or clogged toilet. Similarly, electricians and heating, ventilation, air conditioning, and refrigeration (HVACR) businesses provide repairs for necessary utilities like electric, temperature control, and refrigeration systems.
The U.S. Bureau of Labor Statistics (BLS) projects that construction and extraction jobs (including plumbers, electricians, and HVACR technicians) will grow 6% annually from 2020 to 2030, which is about 400,000 new jobs.
How to get started: Trades like construction, plumbing, electrical, and HVACR typically require an apprenticeship that can take up to 5 years, so you won’t be able to start your own business immediately. Some folks also attend trade school programs in addition to on-the-job training, which can cost $1,000-$30,000 depending on the program length and fees.
You will also need to obtain proper licensing and certifications required in your state to operate your business during your training. Once you have the experience and credentials, starting your own repair service business will require typical business and insurance costs, plus tool costs that can range from a few hundred to thousands of dollars depending on what repairs you offer.
Earning potential: According to The Bureau of Labor Statistics (BLS), the median salary for plumbers is $59,880, electricians is $60,040, and HVACR technicians is $48,630. The he highest 10%of plumbers earn more than $99,920, electricians more than $99,800, and HVACR technicians more than $78,210.
2. Child care
People need child care to work no matter what, though an economic downturn can shake up where the jobs are. During the 2001 recession, for-profit child care chains like KinderCare Learning Centers and Primrose Schools opened more locations and actually grew their businesses, while private operators struggled when parents got laid off and government subsidies shrank.
How to get started: Sites like Care.com can allow you to connect with people who need nannies and sitters without the large overhead costs needed to start a daycare franchise. You don’t necessarily need formal training, but taking CPR and first aid training can allow you to charge more for your services. CPR certifications typically last for two years, with training and materials costing between $65-$83. If you start a child care business at home, consider additional costs of food, toys, and other supplies.
Earning potential:. According to Care.com’s Cost of Care Survey, nannies earned an average of $694 a week and day care centers charged $221 a week to care for one child in 2021. But even though nannies may make more initially, an at-home child care business has the potential to increase take-home weekly pay by scaling up with more children, staff and even multiple locations.
The government’s earning reports project higher earning potential for child care workers. BLS notes that the highest 10% of child care workers, in general, earn more than $17.99 an hour/$719.60 a week for full-time. For child daycare service workers, specifically, BLS reports median earning of $11.43 an hour/$457.20 a week for full-time.
3. Accounting and bookkeeping services
Accounting service revenue has also steadily grown in the United States since 2010 – and did not dip during the 2020 recession. According to Statista research, accounting services revenue was about $126 billion in 2019 and $128 billion in 2020.
In economic downturns, there is still money to budget and taxes to be paid. Even in tight financial situations, people still seek experts for guidance, even if it will cost them some initial overhead. This makes bookkeeping and accounting services very recession-proof.
Accounting businesses can also help people understand complex financial situations and laws that arise during a recession, while also helping individuals and companies correctly prep and file their taxes. Businesses will also always need bookkeepers to help track finances – and arguably may need them more when finances are tight during a recession.
How to get started: You can start a bookkeeping business in under a year by taking online training courses via sites like Udemy, Coursera, LinkedIn Learning, National Association of Certified Public Bookkeepers (NACPB), or Bookkeepers.com. These training courses can cost anywhere from $75 – $400.
To start your own accounting business and operate as an accountant, you typically need a bachelor's degree in accounting or business. This requires time and money that may not be feasible before an impending recession.
Earning potential: According to BLS, the median salary for bookkeepers is $45,560, and $61,980 for the highest earners. The median salary for accounting, tax preparation, bookkeeping, and payroll services is $77,080. For accountants and auditors specifically, BLS notes the highest 10% can earn more than $128,970 per year.
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4. Cleaning service
People likely won’t pay for home cleaners during a recession, but certain buildings will always require cleaning services. So starting a commercial cleaning business can be a smart and recession-proof idea.
Places like hospitals, hotels, offices, banks, and classrooms must stay clean no matter the economy. Some may outsource cleaning services, which also allows them to cut costs. So even in a bad economy, cleaning service businesses will have work.
How to get started: You do not need a formal education to start a cleaning service, but it’s a good idea to have certifications and training that proves you understand proper sanitation guidelines. Some states may also require you have certain licenses depending on what locations you clean. Training and certifications can cost you hundreds to a few thousand dollars. CMI Cleaning 101 from ISSA (The International Sanitary Supply Association) is a good place to start. Additionally, you can expect to pay $200-$500 for cleaning supplies and equipment.
Earning potential: According to BLS, janitors and building cleaners earn a median wage of $14.31 an hour and the top earners made $22.26 an hour. So running your own cleaning business could help you earn between $29,765 and $46,300 a year, depending on your rates and number of clients.
5. Delivery service
Mail doesn’t stop in a recession. Courier and delivery services for products and food are tasks companies will still need, which can make these recession-proof businesses.
How to get started: Besides business and insurance costs, you just need a vehicle and a standard driver's license to start your delivery business. If you’re planning on delivering a large number of packages, buying a used or new delivery sprinter van can run you $10,000-$42,000. You can lease a delivery van to cut costs down and free up cash. TrueCar’s average 36-month lease payment for a newer Ford Transit Crew Van is about $768 a month with a $2,000 downpayment. Some companies also have their own driver programs that allow you to operate as an independent business.
Currently, Amazon has a Delivery Service Partner (DSP) program that helps you start your own Amazon delivery business with a start-up cost of $10,000, plus some additional expenses for training and starting your business that could cost you upwards of $30,000.
Earning potential: BLS notes delivery truck drivers earn a median yearly salary of $36,660. ZipRecruiter reports that independent delivery contractors earn an average of $65,269 a year, with top earners taking home $152,500 a year.
6. Auto Repair
People still drive their cars during a recession, and vehicles will always need repairs and general maintenance. It’s also common to see more older vehicles on the road during a recession.
Driving older vehicles helps folks cut costs if they can’t afford to buy a new vehicle, even though they will have to pay some repair costs. This makes auto repair businesses a very recession-proof business.
The new car shortage is also going to keep people in older vehicles. Some car manufacturers cut down production due to a shortage of car microchips, which was caused by faults in chip shipping and production during the pandemic. Auto parts retailers like AutoZone, O’Reilly Auto Parts, and Genuine Parts also did well in 2021 following the last recession – illustrating a need for auto parts to make repairs.
How to get started: Many people enter postsecondary education programs through tech schools to get proper training in automotive repair. These can take 6 months to 2 years to complete and cost $5,000 to $20,000. Depending on your training program, you may also need to pay a few hundred dollars for necessary EPA certification testing and optional National Institute for Automotive Service Excellence (ASE) certifications. Being ASE-certified is an industry standard that gives you credentials to back up your knowledge.
Starting a mobile mechanic business or running your business from a home garage (both will still require proper business registrations and licenses outlined in your state), will help you keep start-up costs lower compared to buying a brick and mortar store. To keep tool and equipment costs lower you can also focus on quick repairs like brake services, air filter replacements, oil changes, tire maintenance, battery replacement, and under-the-hood replacements like spark plugs and timing belts. Depending on what you choose to repair, your initial investment can run you anywhere from $10,000 – $50,000.
Earning potential: According to BLS, the median salary for automotive service technicians and mechanics is $46,880. The highest 10% earned more than $75,100 a year, which you could make as a small, one-person shop. For mobile mechanics specifically, ZipRecruiter reported an average annual salary of $63,343.
People will still need essential clothing items in a recession, especially for growing kids, and they will be looking for deals when money is tight. This could make an online resale business recession-proof, especially since past recessions have seen resale sales and buyers increase.
Thrifting and resale culture has been on the rise since the pandemic, with ThredUp’s 2021 Resale Report noting 33 million additional consumers started buying secondhand in 2020. According to a 2009 National Association of Resale & Thrift Shops (NARTS) survey via Reuters, 64.1% of U.S. resale stores surveyed increased sales by nearly 31% from second quarter 2008 to 2009. Specifically, books and clothing sales did well.
The baby care products market is also estimated to rise from $67 billion to $88 billion between 2020 and 2026, which will result in more used items up for grabs. Additionally, selling your gold, diamonds, jewelry, and silver could be lucrative since prices are at record highs.
How to get started: You can start selling used items and clothing to pawnbrokers and consignment shops. But you’ll find more flexibility, and potentially more earnings, by selling through online retailers like Mercari, Poshmark, and eBay. You will also want to spend time sourcing items if you don’t have things to resell. Check Craigslist, thrift shops, Facebook Marketplace, and yard sales for items and brands that are in demand.
Potential earnings: Earning will really vary on the items you sell and how much time you spend on your business. ZipRecruiter reports that the majority of resellers make between $33,000 and $77,000 a year. Online resellers specifically make an average of $69,655 a year.
Bottom line: Why start a business during a recession?
Starting your own business in 2022 may seem pretty daunting with news of another impending recession. But starting your own business during a recession has some perks:
- More opportunities. During a recession, there are often state- and federally-funded programs introduced to help business owners secure funding and start a business.
- There’s less competition. When the economy is struggling, typical start-up funds may also be limited since investors are less likely to invest in new business proposals. This can prevent others from starting new businesses.
- Less start-up costs. During a recession, some manufacturers and vendors will decrease costs to stay competitive. Real estate prices also decrease during recessions. This means you might have fewer business costs related to starting a business.
- People need jobs. Starting a business allows you to increase employment opportunities, and more people are looking for jobs you might need to fill. According to the Bureau of Labor Statistics, about 8 million jobs were lost between 2007 and 2010.
- You can be your own boss. If you’re worried about your current job during a recession, the stakes might already be high. This could be an opportunity to be in charge of your own business and have even more success when the economy returns to normal.
Learn more about how a recession will affect you, your career, money and your family.
A recession-proof business will survive a period of time when the economy slows down, there are fewer jobs, and prices for homes, cars, and everyday goods increase.
Starting your own business in 2022 may seem pretty daunting with news of another impending recession. But starting your own business during a recession has some perks: less competition, lower startup costs, and more.