Recession-Proof Businesses: Profitable Industries and Traits
Recessions are nerve-wracking for anyone, but they’re often particularly stressful for business owners. And while we never know exactly when a recession will hit, recessions are inevitable, as they’re normal parts of the typical economic cycle.
If you’re interested in becoming your own boss and you aren’t sure where to start, you may want to consider choosing from fairly recession-proof industries.
15 recession-proof businesses
Businesses that thrive in recessions can offer more stability and peace of mind for owners, especially when you’re implementing smart financial strategies. These businesses are often relatively stable and may provide essential goods or services that people can’t or won’t forgo even when money is tight.
Keep in mind that no single business type is completely immune to the economy, and any business can go under, but certain industries are much more likely to thrive in a recession. These industries are often referred to as “recession-proof.”
Let’s discuss 15 of the most recession-proof businesses.
1. Child care businesses
People need to go to work regardless of the economic state, and that means many parents need reliable child care.
The child care market size was estimated at 61.7 billion USD in 2023 and is projected to grow at a CAGR of 5.86% from 2024 to 2030. And, with government-funded initiatives like tax incentives available, more parents may be able to afford quality child care.
When starting a child care business, make sure that you’re following all local and federal regulations. It’s also important to register your business and purchase business insurance to protect yourself and your assets, even if you’re only watching a few children from your home.
CAGR definition
CAGR stands for compound annual growth rate. It’s the measurement of the expected amount something is expected to grow each year over a set period of time. For example, if something has a CAGR of 10% from 2025 to 2030, that means it’s expected to grow 10% a year for 5 years.
A high CAGR means an industry is growing rapidly.
2. Financial advisors and accountants
Businesses offering accounting and financial advisory services are typically essential services that many individuals and businesses need during a recession. Accountants are essential to help their clients pay the right taxes on time, and financial advisors can help their clients ensure that their investments are still best situated to grow despite economic change.
Both industries have strong projected growth, making them good options when you’re considering the most recession-proof jobs. The financial advisor sector is projected to grow 17% from 2023 to 2033, while the accounting industry is expected to grow 6% in that same period.
3. Auto maintenance businesses
Auto maintenance businesses offer essential services, which can help generate more stable revenue. Cars still need ongoing maintenance and repairs, and people hang on to older cars longer as new-car sales often drop during a recession.
According to data from Mordor Intelligence, the automotive service market is projected to have a CAGR of 5.98% from 2024 to 2029.
4. Healthcare businesses
The healthcare industry will always be essential regardless of the economy. Whether you want to start an in-person private practice or launch an online healthcare business, offering essential healthcare services can help keep your business in demand, even in the face of a recession.
Telehealth in particular has opened up new options for many providers, even allowing them to work entirely from home and reducing potential office expenses. The opportunity in telehealth is also exceptional, as the global telehealth market is projected to have a CAGR of 24% from 2024 to 2030.
5. Grocery stores
Groceries are essential products, so businesses selling groceries are relatively recession-proof. During recessions, the percentage of funds spent on groceries and eating at home typically increase while eating at dine-in restaurants decreases. Even now, over 80% of consumers are already cooking at home more due to the current inflation.
Traditional grocery stores have the best stability, but e-commerce grocers and even local farmers selling goods may perform well in recessions, depending on your target audience and marketing strategies.
6. Commercial cleaning companies
Commercial cleaning companies provide essential services to businesses. Schools, healthcare organizations and child care centers may have strict standards regarding cleaning they need to maintain, and many businesses outsource these services.
If you’re going to launch a cleaning business, consider promoting “green” and “eco-friendly” services, which are becoming increasingly preferred by consumers and may actually be required in certain states.
7. Specialized home contractor and repair businesses
If a pipe bursts or your air conditioning stops in the middle of summer, it doesn’t matter if you’re trying to conserve funds. Home repairs are a need, so businesses offering home contracting and specialized repair services are relatively secure during recessions even though “optional” renovations may decrease.
You can work as a general home contractor or offer specialized services like plumbing, electrical, HVAC, drywall or roofing services.
It’s also worth noting that for financially secure families, a recession may be an ideal time for a home renovation. While material costs tend to increase, contractors may charge less and interest rates on home equity loans and credit cards may be lower for borrowers.
8. Veterinary clinics
Veterinary clinics — along with other pet care businesses like dog trainers and groomers — provide crucial services. It’s clear that pet care is a high priority for owners even when the economy is struggling, with 44% of pet owners making financial sacrifices for their pets in the midst of recent inflation.
Since 1 in 5 American households adopted pets during COVID-19, many areas have a current shortage of pet and veterinary services due to increased demand, and that demand is only anticipated to increase.
9. Property management companies
Property management is another industry that isn’t heavily impacted by recessions. People still need to rent homes and apartments, and landlords relying on property management companies are unlikely to change that during a recession. The industry is estimated to reach $119.1 billion by 2029.
10. IT and tech support company
Technology is another recession-proof industry, so launching a business offering outsourced IT or tech support services can be a relatively safe bet. Even as we shift toward remote work, tech teams offer essential services, like optimizing businesses for security, setting up equipment and providing IT maintenance.
The global IT market was valued at $1.30 trillion in 2023 and is projected to have a CAGR of 9.5% from 2024 to 2032.
11. Essential SaaS tool companies
Essential SaaS (software-as-a-service) products targeting large businesses can have exceptional security. Even when budget cuts happen, organizations still need critical tools like invoicing software, customer relationship management (CRM software) and telecommunications software.
The industry was valued at 273.55 billion USD in 2023 and is projected to have a CAGR of 18.4% from 2024-2032, suggesting significant growth.
12. Consignment and reselling stores
Consignment and reselling businesses can make a profit selling gently used items at costs lower than their original value. This is a win-win for the business owner making profit and the consumer looking for deals when times are tight.
The resale sector actually grew in 2020 during the COVID-19 pandemic, with 33 million consumers buying secondhand apparel for the first time.
13. Digital marketing agency
Slashing marketing funds may be the first thing businesses look at when approaching a recession, but brands that reduce marketing costs risk losing up to 15% of revenue, while 60% of brands that increased their investment in the last recession saw ROI improvements. As a result, the digital marketing industry has the potential to thrive through a recession.
Plus, those that are cutting back on employees during a recession may outsource to consultants and agencies rather than using an in-house marketing team. Offering diverse services, serving multiple audience niches and working across large geographic regions can help protect your business in case of a recession.
14. Food trucks
While restaurants are one of the least recession-proof businesses, consumers may still enjoy eating out courtesy of food trucks. Data shows that food trucks are one of the most recession-proof businesses, something we saw during the 2008 recession.
Factors like lower startups and operational costs, ability to relocate and consumer demand for quick food options can also make it a less risky option when starting a new business.
15. Bookstores
Though consumers often reduce discretionary spending during recessions, bookstores have historically performed well even during significant economic upheavals like the Great Recession and the COVID-19 pandemic. Books are thought to provide a “big bang for your buck” in terms of entertainment and are small comforts people may indulge in.
5 traits of recession-proof businesses
Although we can’t foresee when the next recession might hit, we can strengthen our business models to help avoid businesses closing during the next economic downturn.
Whether a business survives a recession depends on its product offering, leadership, location and broader industry trends. Some things most businesses that thrive in recevssions have in common include:
1. They offer products that consumers need
Businesses that provide an essential product or service might fare better during a recession compared to those selling expensive luxury goods. Think of critical services people and other businesses need, then shift your business (or start a new business) to meet those demands.
Goods and services with no practical alternatives are most likely to sell well, especially if the product or service offers a solution for a problem customers can’t (or won’t) solve on their own.
For example, people might attempt to make bread during a recession, but it’s unlikely they’ll try to whip up baby formula or cobble together handmade shoes.
2. They adapt to changing circumstances
Companies with established financial safeguards and the ability to make quick decisions tend to react more efficiently to new information — good or bad. Preparing for as many situations as possible can help your business build resilience.
For example, in-person dance studios that quickly switched to online classes during the COVID-19 pandemic maintained a steady revenue stream. Unfortunately, many in-person-only studios ended up closing down.
3. They do a good job of managing cash flow
One mistake entrepreneurs can’t afford to make is running out of the needed cash for operating expenses. Before a recession sets in, business owners must figure out how long they can stay afloat if revenue drops but expenses remain the same. From there, start planning to reduce expenses before losing revenue.
The goal is to make strategic cuts while improving the value of the business and protecting jobs. Try to make these changes before you need to rather than taking a wait-and-see approach.
4. They plan ahead and focus on long-term goals
Recession-proof businesses often make plans to handle a recession. It’s important to keep long-term goals in mind as you make modifications to the business. As your team acts urgently to counteract the immediate effects of a recession, you may want to implement change on a larger scale to ensure future success for your company.
5. They have a diverse customer base
Businesses that can diversify their offerings to appeal to multiple audience segments may fare better during recessions that heavily impact specific locations or industries.
During the COVID-19 pandemic, for example, the recession had enormous impacts on the hospitality and travel industries. A commercial cleaning company that only focused on cleaning hotels may have been out of a contract. If, however, they also had clients in healthcare or private business industries, they would have been less likely to lose all of their recurring revenue nearly overnight.
How to stay profitable during a recession
Thinking creatively about your business can help you survive a recession and turn a profit. Brainstorm with your employees, shareholders and key customers to generate an improvement strategy to find opportunities during a recession.
Here are a few tips to help make a profit during an economic downturn:
Reconnect with core customers
Reconnecting with your customer base can help you pull through a financial disaster. Make sure your marketing strategy accounts for different audience segments. If a recession impacts geographic areas differently, for example, consider running location-specific campaigns.
Plan for the worst, but stay positive
Confront the reality of the situation and calculate how long the business can continue operating without running out of money. As discussed earlier, reduce expenses as early as possible. However, balance your approach with optimism — sharing a positive yet rational outlook with your team will go far.
Preserve capital
Take any measures you can to conserve capital and save money. This could include refinancing your business debt, simplifying or altering your business model or making a complete pivot if necessary. Diversifying your revenue sources can provide extra protection for your business as long as you efficiently manage your operations.
Additionally, you’ll want to save three to six months’ worth of daily business expenses, just as you would with your personal emergency funds.
Establish financing ahead of time
It’s wise to establish financial options for your business while you’re in good shape. This includes learning how to get a business loan before you need funding. Opening a flexible business line of credit can give you access to cash on an as-needed basis if your business struggles in the future. Try to lock in one with a reasonable interest rate, and only use what you need.
