The recession and financial troubles over the last few years has hit many businesses, while others have been able to continue much as usual. Although this is partly due to how each business is run, there are certain industries that are better placed to cope in economically turbulent times than others.
Below are some "recession-proof" businesses as well as businesses that particularly suffer in tough times.
RECESSION PROOF BUSINESSES
Below are some industries and businesses that are better placed than most in an economic crises.
Food Shops
People have to eat so food shops are well placed to see out a recession. Although food purchasing habits may change everybody will still be buying it. Luxury foods and more expensive retailers may suffer, but cheaper food retailers can really benefit as people do everything possible to spend as little as they can.
Very High-End Products
You may be thinking "how can expensive products be in demand during a recession?" There are, however, always wealthy people no matter how bad the economy looks. This can mean high-end products do not suffer as much as you would expect. Here we are talking private jets and mansions. People who can afford these types of things are not going to be suddenly left with nothing even if they do loose a percentage of their wealth. This means high-end products can still be in demand.
Discount Shops
People are always looking for a bargain, but this is even more the case if people are struggling financially. Offering products or services cheaper than the competition is particularly beneficial in the present climate.
Some Health Related Businesses
Health is essential whatever the circumstances. This means that some health businesses and healthcare providers will still be in business post-recession. This does, however, depend on the business and whether or not it is essential or a nice-to-have extra.
Pawnbrokers
Many people in financial trouble may have items at home of value, such as jewellery and family heirlooms. They may not want to sell these items but they might be willing to trade them in for cash in the short term. This means pawnbrokers can become particularly busy.
Pound Shops
Perhaps not unsurprisingly, Pound Shops, and similar outlets, have been very successful over the last few years. The quality may not quite be there but people know they will get a discount. In the current times many are willing to trade quality for price.
Any business that can save people money will be a hit in a recession. Whether this is by providing something cheaper than the competition or providing something that means people don't need to spend on something else, they are likely to snap up these opportunities when they are strapped for cash.
BUSINESSES THAT SUFFER IN A RECESSION
So the above are the type of industries/businesses that can do well in a recession, but which are particularly vulnerable?
Marketing
Marketing companies can suffer as it is something businesses feel they can cut back on. It is an interesting one though, because it depends on the type of marketing. For some businesses to be successful they must invest in marketing. So although marketing budgets are still available they may need to be thought about in more detail. Web design and related industries have not particularly suffered, and in some instanced have become more successful as the internet becomes more important to businesses. Other areas, such as newspaper and television advertising, are deemed less effective than they once were and are therefore less of a priority for marketers.
Luxury Items
OK, so above I said luxury items can be unaffected but there I meant high-end luxury items. Other types of luxury items, however, can be impacted in the opposite way. For example, people are less likely to buy luxury biscuits when there is a cheaper option available. It is the small, but fairly regular, luxuries that people are more likely to do without. These are the items that are more "wants" than "needs".
Restaurants
More people have chosen to save money and eat at home in recent years. And those who do still eat out do so on a less regular basis. Eating out can be expensive and it is something many people feel they can do without.
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