When deciding what type of business to start up or career to pursue, it’s important to consider how resilient the industry is that you’re going into. If bad times arise, will you still have a job and be able to keep the doors to your business open?
Over the course of U.S. history there has been a recession nearly every six years, so unfortunately, we’re almost due for another one. Economic cycles happen in every country, so it’s important to be prepared by thinking long-term when it comes to your small business plans. Be sure to consider industries that thrive when the economy is going strong and can hold steady during economic downturns.
If you’re considering opening your own business or expanding into new territory, think about doing business in one of these industries.
No matter what the economy brings, people will always get sick and need to see their doctors. While we might try to cut back on the number of specialists we see or visits we have if our health insurance doesn’t cover everything, healthcare professionals are still of utmost importance. During the most recent recession, the healthcare sector contributed to 17.6% of U.S. GDP, and this number continues to rise as the population ages. With the Baby Boomer generation at or around retirement age, they are likely to make more frequent trips to their doctors, keeping this industry going strong.
With the increasing role that technology and the internet play in businesses of all industries, there will always be a need for information technology companies and employees. Technology is the foundation of a company’s operations, so in order to remain profitable, this need will likely never change. In fact, there has been double-digit growth in the information technology sector in recent years to meet the increasing demand for the latest and greatest software and technologies. From website designers to software programmers and mobile app developers, there are more career paths and business opportunities than ever before, and this is certainly going to remain for years to come.
Now this might seem a little bleak, but unfortunately it’s true: there is a consistent need for funeral and burial services. Regardless of the economy, people come into and leave this world on a daily basis, so even as funeral service trends continue to advance with the times, there will always be a demand for businesses in this industry. In 2013, funeral services earned $15.9 billion in revenue, and again, this number is expected to rise as the Baby Boomer generation continues to age. While this industry is certainly not a fit for every entrepreneur out there, it’s one that will always be in existence (in some form) and always turn a profit.
In many households, pets are simply other members of the family. Like we won’t cut corners for our own healthcare, most consumers feel the same way about their pets. This is one of a few industries that has seen steady growth every year since the early 2000s, when the last recession began. We spent $14.3 billion on veterinary services in 2013, and projections say that we will be well over $15 billion by the end of 2015.
During tough economic times, people often turn to education if they’ve been laid off or to simply vary their skill set to pursue a new career path. From elementary to collegiate levels, the education sector is one that doesn’t falter, even with the rising cost of a college education. We might choose a more affordable path, such as community college or technical school, but the value of an education in the U.S. has only been stressed more in recent years.
When times get tough, consumers tend to turn to simple indulgences to cope. The alcohol industry generally sees growth during economic downturns, as people turn away from luxury purchases, such as vacations or new cars, for cheaper alternatives. However, this growth mainly applies to alcohol wholesalers, as consumers tend to purchase alcohol in larger quantities to save money in the long run. The markup on alcoholic beverages in restaurants and bars is often two to three times more expensive, so consumers are more likely to buy it on their own and wait to indulge until after they get home from a night out.
Candy & Junk Food
Along the same lines, candy and junk food serve as a comfort or indulgence during stressful economic times. It’s generally an affordable way to treat yourself when you’re cutting back elsewhere. During the last recession, Nestle’s profits rose 11%, a clear indicator that consumers might turn away from other expensive luxuries and choose something sweet or salty instead. Unhealthy, packaged foods also tend to be much cheaper than healthy, organic foods, so they’re a draw to those looking to cut back on their grocery bills.
No matter the industry, an important fact to remember here is that it’s very difficult to predict how any business will fare when the economy takes a turn for the worse. Previous trends are not a guarantee for what lies ahead in the future, but looking at these industries, it makes perfect sense why they generally remain stable. Healthcare, information technology, and education are the foundation of this country, and without them, we can’t possibly progress as a society. On the other hand, when we need to cut back on expenditures, we might turn to inexpensive treats to fill the void. Either way, it’s most important that you pursue a business venture that you’re passionate about, while keeping your long-term success top-of-mind.