While starting a business during a recession comes with challenges, some types of businesses survive—and even thrive—during economic downturns.
A recession means a significant drop in economic activity that can last months or years. During these periods, consumer spending decreases, unemployment rises, and the gross domestic product (GDP) declines.
But certain businesses continue to thrive by meeting essential needs. People still need groceries, health care, and IT support, even when budgets are tight. These necessary services create opportunities for entrepreneurs who understand what makes a business resilient.
Ready to start your business? Create your website today or learn more about Shopify’s tools for selling online and in person.
What makes a business recession-proof?
While no business is completely protected from economic downturns, some are better prepared to weather challenging times. Starting a business means you might be focused on choosing a business name, applying for business licenses, and registering your business right now—and that’s OK. But understanding what makes businesses resilient can help you build stronger foundations from the start.
Here’s what successful businesses do differently during tough economic times:
Build strong financial foundations
Keep monthly costs low and operate with a clear budget. Review all your revenue streams, costs, and profit margins regularly. Avoid unnecessary expenses like rapid expansion or over-hiring to maintain healthy cash flow.
Run lean operations
Manage your inventory carefully to avoid tying up money in excess stock. Keep just enough products on hand to meet customer demand, which frees up resources for marketing or development.
Create multiple revenue streams
Don’t rely on just one way to make money. Add different income sources like subscriptions, workshops, consulting services, or new product lines to create more stability.
Maintain strong relationships
Build trust with your customers through personalized service, special offers, and thoughtful touches like thank you notes. Stay connected with others in your industry to gain insights and referrals that can help sustain your business.
Keep marketing consistent
Continue investing in marketing during downturns to maintain visibility and sales. Use social media, advertising, email campaigns, and content to stay connected with current and potential customers.
Stay adaptable
Learn from companies that grew during past recessions. Businesses like Dollar Tree, Nestlé, Netflix, and Walmart succeeded during the 2008 Great Recession by offering affordable prices, innovative services, and essential products that met customer needs.
12 recession-proof business ideas
Want to build a business that can thrive during economic uncertainty? Here are some business types that tend to stay strong during downturns:
- Grocery retail and food
- Auto repairs
- Information technology (IT) support
- Discount stores
- Financial services
- Plumbing and electrical services
- Home improvements
- Pet services
- Health care
- Beauty products and services
- Education and tutoring
- Freelancing services
1. Grocery retail and food
Food businesses selling staples like groceries, snack foods, and fast food often tend to succeed during recessions because they meet a basic human need. When money is tight, people cook more at home, buy comfort snacks, and look for affordable food options.
Here’s how different food businesses adapt during recessions:
- Food trucks keep costs low with their mobile business model and offer dining experiences at lower prices than restaurants.
- Grocery stores see increased traffic as people cook more meals at home to save money.
- Meal delivery services fill the gap as people cut back on dining out—about one-third of Americans have reduced restaurant visits.
📚Read more: How to Sell Food Online.
2. Auto repairs
US drivers keep their cars longer during tough times, which means more maintenance and repairs. Auto repair businesses and wholesale business-to-business (B2B) parts sellers stay strong by providing these essential services.
Auto repair businesses that do well include:
- Online part stores that serve DIY mechanics looking to save money on repairs by buying parts and materials from online retail stores
- Repair shops that helppeople maintain their existing vehicles rather than buying new ones
📚Read more: Automotive Ecommerce: How To Scale Your Vehicle and Parts Business Online
3. Information technology (IT) support
IT services remain essential during recessions. Whether it’s computer repairs, tech support, or system upgrades, both businesses and consumers need these services to keep running. During the 2008 financial crisis, the tech industry added 77,000 jobs, showing its resilience.
Successful IT businesses include:
- IT support services that maintain critical technology infrastructure, especially important as more people work remotely
- Computer parts stores serving customers who can handle their own repairs and upgrades
4. Discount stores
Discount stores selling everyday items like shampoos, snacks, soap, and cleaning supplies performed well during the 2008 recession. These stores help customers save money on essential items through lower price points.
Successful discount businesses include:
- Dollar stores that attract bargain hunters
- Budget retailers that serve cost-conscious customers—34% of people started shopping at low-cost retailers more frequently during the recent cost-of-living crisis
5. Financial services
Finance-related services like accounting, bookkeeping, and financial planning stay strong during recessions because businesses and individuals still need to manage taxes, protect investments, and organize expenses. During the early stages of the 2008 economic crisis, H&R Block’s revenue rose 11%.
Examples of recession-proof financial services include:
- Accounting companies that help people and small businesses maximize tax benefits and understand their cash flow better
- Financial planning services that support people worried about money management during tough times, helping both individuals and businesses protect their assets
6. Plumbing and electrical services
Essential home repairs can’t wait for better economic times. While construction-focused trades might see less work during downturns, repair and maintenance services stay busy across all economic conditions.
Examples of recession-proof plumbing and electrical services:
- Emergency plumbing services remain essential—leaks and clogs need immediate attention regardless of economic conditions
- HVAC providers and repair companies serve people spending more time at home to save money, especially during extreme weather
Use Shopify’s plumbing business name generator to get started.
7. Home improvements
Home maintenance businesses—from general contractors to painters—often find steady work during economic downturns. Property owners typically focus on smaller projects and repairs rather than major renovations, meaning even sole proprietors specializing in fixing, replacing, decorating, and upgrading home appliances and fixtures tend to thrive.
Examples of recession-proof home improvement businesses include:
- Hardware stores, which saw nearly double the foot traffic in 2020 compared to pre-pandemic levels, as more people tackled DIY projects and fewer people move home
- Painters and decorators help people enjoy their living spaces when moving isn’t an option
The Home Depot showed how to adapt during the 2008 recession by shifting focus to DIY customers. It cut prices on more than 1,000 products, offered free delivery, and launched DIY workshops. These changes helped increase sales by 3% by late 2010.
👉 Start your home improvement business with Shopify.
8. Pet services
People find comfort in pets during tough times, and they continue spending on pet care. During the Great Recession, the pet industry grew 5.1% in sales. From dog walking and pet sitting to specialized pet food and apparel, these businesses maintain steady customers.
Examples of recession-proof pet services:
- Pet care technology continues growing as vets use new tools to diagnose and treat pets. People prioritize pet health regardless of cost.
- Pet food brands stay resilient because pets need to eat, just like their owners
📚Read more: How To Start A Pet Business: 10 Profitable Tips
9. Health care
Health care needs continue regardless of economic conditions. This sector includes medical device sellers, staffing agencies, and traditional health care providers.
Telemedicine has grown significantly—37% of adults used remote health care services during the pandemic, according to the CDC. Companies providing telemedicine technology often stay strong during economic slowdowns.
Examples of recession-proof health care businesses include:
- Contact lens subscription services, whichmaintain steady demand as vision care remains essential
- Pharmacies, which continue serving customers who need essential medication
- Menstrual products, which remain necessary, with eco-friendly brands finding success even during downturns
📚Read more: 11 Healthcare Business Ideas for Emerging Entrepreneurs
10. Beauty products and services
The Lipstick Effect shows that people continue investing in looking good during economic uncertainty. Ulta Beauty saw sales increase by 200% during the downturn caused by the pandemic, while beauty salons across the US grew by 14.4% during the 2008 recession.
Examples of recession-proof beauty products and services include:
- Cosmetic brands, whichthrive as people continue buying makeup and skin care products to feel confident during tough times
- Beauty salons, which maintain steady business, making this a promising low-investment business idea if you have hair or makeup skills
11. Education and tutoring
Education becomes even more important during downturns as people invest in new skills and academic success.
Examples of recession-proof education businesses include:
- Online tutoring, which helps parents support their kids’ education, especially when schools face resource constraints
- Skill-building courses that attract adults looking to change careers or improve their qualifications through cost-effective online learning
👉 Start and run your own tutorial business with Shopify.
12. Freelancing services
As companies reduce full-time staff, they often turn to freelancers for essential work. Focus on recession-resilient industries like health care, education, or ecommerce to maintain steady work.
Examples of recession-proof freelancing services include:
- Content creation and marketing, which help businesses maintain their online presence cost-effectively
- Accounting and bookkeeping services, whichremain essential for managing finances and tax compliance
- Tech support and web development skills that stay in demand as businesses rely on digital infrastructure
How to make your business resilient during recessions
You can strengthen your business to handle economic challenges and continue to sell online—even when money is tight. Here are six practical ways to help your business stay resilient:
- Make and stick to a budget: Review your revenue streams, costs, and profit margins to create a clear financial picture. A solid budget helps you make smarter decisions during tough times.
- Keep monthly overhead low: Think carefully before taking on big expenses like new hires or larger spaces. Talk to financial experts about major decisions that could strain your finances.
- Build strong professional relationships: Keep your customers coming back with special offers and thoughtful touches like thank you notes. Connect with others in your industry to share insights and referrals.
- Maintain lean inventory: Buy only what you need to meet customer demand. Avoiding excess stock keeps your money free for marketing and growth.
- Invest in marketing: Stay visible with targeted social media ads, content marketing, and email campaigns. Use Shopify’s marketing automation to make your efforts more efficient.
- Diversify revenue streams: Create multiple ways to make money through options like subscriptions, workshops, or consulting services. This helps protect your business even if one income source slows down.
Recession-proof business FAQ
What types of businesses do well in a recession?
Businesses selling essential goods and services—like food, IT services, or plumbing and electrical work—often maintain steady demand during recessions.
Can any business really be 100% recession proof?
No business is completely recession proof. However, some businesses like auto repair shops and discount retailers typically perform better during economic downturns.
How can you identify a recession-proof business niche in the market?
While consumer behavior can be unpredictable, studying businesses that succeeded during past economic downturns can help guide your decisions. Each crisis is different, but patterns often emerge in how certain industries perform.
