Which businesses do well during downturns?
Despite the damaging effects of the economic downturn, there are plenty of examples of businesses who are surviving and even thriving. So what kind of business can see turnover go up in a downturn?
Actually – lots. Talk to small business owners and yes, some are having a hard time, but many are still doing OK. They might not be experiencing huge amounts of growth, but there is still business out there for them. Many business owners believe the ones going out of business are the ones who were already struggling before the downturn.
Small businesses with a good product at the right price and a clear market will still make a profit. Putting your heart and soul into something you believe in will show buyers a passion and dedication they will never find from a large corporation.
So where is there money to be made right now? Online is an obvious choice, especially if you can provide a service or product online that costs more to buy in the “real world”. High street retail shops are not a good place to be right now. Online you can keep your costs very low and quickly expand your product range.
However if you are selling something that’s widely available, it can be hard to stand out online. And because it’s easy to compare prices online, profit margins can be very low. Online selling works well for a product or service in demand that you create yourself.
One suggestion is to look at what people are buying right now that they would switch to buying from you if you could offer it for less. A great example is the £1 shops that are springing up everywhere. In the recession, people are turning to them to get the same goods they normally get from more expensive stores. How can you adapt that concept?
Remember that people don’t just buy on price, even in a recession. Trust and customer service always come into the equation, so you need to consider every aspect of your business. This is even more important when the good times return.
Here are some specific ideas you could consider for a recession-proof business:
An affordable luxury
While we all know how important it is to watch the pennies, to many people a little bit of luxury is more important than ever. Treats may be less frequent but everybody likes to reward themselves from time to time. During the recession in the 1990s, posh ice cream Haagen Dazs saw sales soar. Is there a product you can sell as an affordable luxury treat to cheer people up?
Appeal to local tourists
Jetting off to foreign climes might be an impossible dream for many people this year and a holiday in the UK could be the ideal solution. If you live near a tourist hot spot and can offer visitors a guide to the area or set up a B&B, this could be the ideal time to do it. Is the revival of the great British holiday upon us?
Get it fixed
As consumers, we have been spoilt by the so-called ‘throwaway society’. If the heel on your shoe broke you wouldn’t think twice about binning it and buying a new pair. But these are thrifty times and repairing shoes, clothes and electrical items such as TVs could save people valuable pounds. Brushing up your repairing skills could secure you some profit.
Green is the new black
Could going green put you back in the black? The demand for products that cause less damage to the environment is increasing all the time. Products like energy-saving light bulbs are particularly popular as they also save people money in the long-term. Can you see a way to do something in a greener way than it is currently done?
Dead serious
It is said there are only two things you can’t avoid in life – death and taxes. And just as the supermarkets are finding with food sales, people will always buy the things they need, even in a recession. So could you set up a business writing wills or doing house clearances when people die? Similarly, people will always get ill and anything you can sell to ease their discomfort will see a healthy profit.
The most obvious growth industry
Finally, debt collection and repossession are naturally on the increase and bailiffs are bound to be busy for quite some time. Be sure you are aware of all regulations and take personal safety seriously if you get into this kind of business
