The Best Small Businesses to Start in a Recession

2009 was when the last recession officially ended & t’s only a matter of time before the economy throws us for a loop again and we enter a new one. Economic cycles are just a painful fact of life, and you can bet the farm that there will be at least one more downturn in the next 20 years. Actually, since the Great Depression we’ve experienced 13 recessions.

But don’t let that scare you into hiding the money under the mattress and setting aside your dreams of owning a business. There are certain types of businesses out there that have a track record of making money, even in a down economy. You’ll be in it for the long haul with your business, so why not choose an industry that can weather the bad times, too, when they come?

Here are 10 small businesses that have been proven to thrive even when the economy goes south.

1. Movie theaters. People are especially in need of distraction when times are tough. A night at the movies offers a chance to get out of the house and wrapped up in someone else’s drama for a few hours, all at a relatively low price. The film industry had its heyday during the Great Depression, and box office sales were up by double digits as recently as 2009.

2. Beer, wine and liquor. Americans tend to cut back on the pricier drinking options during a recession but that doesn’t mean that people quit drinking. Restaurant sales of wine by the bottle fell sharply in 2009 and so did bar revenues but wholesalers of beer, wine and liquor did just fine during the last recession. Restaurant sales of wine by the glass went up.

3. Tattoo parlors. Americans didn’t skimp on the ink during the last recession. A tattoo can be a meaningful (and relatively cheap) form of self-expression during a frustrating and difficult time. Tattoo parlors across the country reported an increase in business during the economic crisis. Only 14% of Americans had a tattoo in 2008, but that number was up to 21% by 2012.

4. Candy. Fun fact: Snickers, Tootsie Pops and Three Musketeers bars were all invented during the Great Depression. Tough times have a way of encouraging America’s sweet tooth. In 2008, Nestle’s profits rose 11% and Cadbury’s were up by 30%. Candy can soothe anxiety and it’s an affordable treat when you’re tightening the budget elsewhere.

5. Cosmetics. Have you heard of the Lipstick Indicator? The theory is that lipstick is an “affordable luxury.” Instead of buying the $200 sweater in a time of financial uncertainty, women will opt for the $20 cosmetic instead. According to Leonard Lauder, chairman of Estée Lauder, an increase in lipstick sales is a sure sign that the economy is headed downhill. Lipstick didn’t live up to its reputation in this most recent recession but nail polish and mascara both saw strong sales in 2009.

6. Thrift stores. People shop during a downturn but they’ll steer clear of Nordstrom and head straight to the thrift shop. While only 14% of Americans shopped regularly at thrift stores in 2008, that number was up to 20% by 2012. Goodwill, the market leader in thrifting, saw sales rise 10% annually between 2007 and 2011.

7. Home health care services. Home health-care services grew by double digits annually during the recession, proving that this is not a discretionary expense for most families. With our aging population increasingly needing health care at home, these businesses will be in high demand, regardless of economic conditions, for the foreseeable future.

8. Veterinary services. No matter the economic climate of the moment, we don’t pinch pennies when our furry family members are sick. Spending on pets was one of the few areas of consumer spending that grew every year through the recession. We spent $14.3 billion on veterinary care in 2013. That’s expected to hit $15.3 billion in 2014.

9. Death care services.  Demand for death-care services remained steady throughout the recent recession, even though providers reported an increase in more affordable services such as cremation. It might not be the sexiest business, but you’d be hard-pressed to find a more reliable line of work.

10. Tax accounting. You might think business owners would cut costs by doing their own taxes during a recession but that’s not the case. Tax accountants maintained steady business during the recent recession. Business owners wanted to make sure they got the best refund possible without making any costly mistakes.

Nick Neonakis, who wrote the Franchise MBA, says “coming out of the recession, there has been significant pent-up consumer demand as well as deferred purchases and maintenance on personal property. People want to look good and are willing to indulge in affordable luxuries [like massage]. In addition, deferred maintenance on homes is resulting in significant performance in property services companies (i.e. – painting).”

Although the economy is on an upswing, albeit a slow one, when you think about starting a business you need to plan for the long term. If you choose a business that thrives in good times but can also ride out the downturns, you’ll rest easy no matter where we are in the economic cycle.

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