There has been a time when we went to any shop, and each of the shopkeepers said that the market is being so cruel and low, it is difficult even to recover costs, customers are not spending, on and on and the list of worries of business people would never end. Plain and simple, that is what we call a ‘recession’.
We all have heard it; we all have seen and witnessed it. According to economics terminology, the recession is a phase of downfall in an economy where consumers are unwilling to spend, and inflation climbs skies, followed by a considerable fall in GDP.
The definition itself raises terror, whether you are into a business or a job. In times of the low economy, being in business will, of course, worry you with your profits and sales, but being employed for someone would equally concern you in terms of job security and remunerations.
But a little history class first:
The Great Recession of 2008
The great recession of 2008 is the recent case of recession at a global level which we all can recall.
Just like the Nuclear Explosion at Hiroshima and Nagasaki, we are still struggling to make good the losses of that recession hit, and probably it would take more years to do so completely.
This dark period began in the US in 2007 due to a dip in the real estate market, and the tremors of this economy earthquake were felt in most developed countries.
According to the U.S. Bureau of Labor Statistics, during the first quarter of 2009, the lowest point of the Recession, over 230,000 U.S. businesses closed.
But countries like China and India were less affected than others as you can see in the map below of the real GDP growth rate of 2009.
Fast forward to the present:
“The Mother of All Recessions” in 2020
According to UniCredit specialists, the world is heading to a deep recession. So deep that they say in a report, you can check here, that “The mother of all recessions has arrived”.
They expect the bulk of containment measures in the US and Europe to last through June and the global GDP to fall by about 6%. In the US, the economy will likely shrink by 10-11% this year, and in the eurozone GDP may contract by about 13% in 2020. Speaking about the UK, there is also a shrink of GDP by 10-11%.
For comparison, the global GDP contracted by 4.2% between Q4 2007 and Q2 2009.
Businesses That Thrive in Recession
While studying about recession, one question tickles all of our minds that does the recession affect every business?
Most of us think yes is the answer because we tend to witness a downfall in almost all major industries. These industries include real estate, construction, jewellery, textile, agriculture, etc. But there are a handful of business lines which not only sustain but even flourish during the times of recession, while it is struggling darkness for the rest of them.So if you are not one of them who laugh off the fear of recession until it strikes them, instead you are the one who wants to recession-proof your business, then here is a concrete list of business options for you which have shown upwards graphs even the economies were low.
1. Digital Industry
1.1 Digital Marketing Agency
For small and mid-sized agencies, the risk is smaller, but there is also an opportunity. So if you are a small-mid agency, be flexible, optimise your processes, lower the cost and compete for clients who would typically go to expensive agencies.
Here is our complete, actionable guide on how to start and grow your digital marketing agency.
The blockchain is one of the leading technologies of today’s world. And the best cure for a recession is innovation and adaption.
Considering the importance and the developments of blockchain it may be the vehicle that will carry us out of the recession just like in 2008 it was the micro-gig economy with leading companies like Airbnb, Uber, Fiverr etc.
From cryptocurrency trading and exchanges to video games and virtual worlds to decentralised finance and web 3.0, the shift from physical to digital is happening, and we believe COVID-19 is further accelerating this evolution.
1.3 Affiliate Marketing
According to Statista, affiliate marketing spending in the U.S. alone will reach $8.2 billion by 2022. Also, according to a Forrester report commissioned by Rakuten, 81% of advertisers and 84% of publishers use affiliate marketing.
That’s because affiliates receive money only when they generated a sale for the vendor. In troubled economic times like these, the vendors reduce the marketing budgets that don’t bring guaranteed sales.
According to Google Trends, you can clearly see that the search trends for affiliate marketing have risen in the previous economic crisis.
For publishers, affiliate marketing is also appealing because of its low-cost entry barrier. All they need is a website that gets traffic and to signup to an affiliate marketing network.
Further reading on affiliate marketing:
2. Entertainment Industry
We all desire to be entertained even in happy times, so obviously we want distractions from our business tensions during gloomy times, and most of the wealthy businessmen consider entertainment as an easy escape.
So here are a few business options thriving during a recession:
When it comes to Jennifer Lawrence or Julia Roberts, who will think about the bullish or bearish phase of the market before choosing to spend on those three hours.
Rather, they find it an easy and affordable option to distract and refresh their minds from their worries or profits and losses. A big tub of caramel popcorn with a large chilled coke and Vin Diesel dancing on the big screen, who will resist! So popcorn and theatres are always a yes.
We all have seen those funny businessmen with unlimited wealth who sit on their massive black boss chairs in their office, scratching their nice, round and fat tummy and watching television when no customers are humming around.
So be it, ladies or gents, America’s Got all of they enjoy talent and Game of Thrones. There is no such bad impact of the recession on television show makers; rather, people love to share hearty laughs, watching the F.R.I.E.N.D.S. People continue to pay for Netflix subscriptions.
Though it is a weird thing to believe, yes the modern generations are keener to get their skins inked, and when they have idle time from their business, they choose to sit and get a nice tattoo. The US has seen a considerable increase in the number of people having tattoos during the recession period.
3. Health and Wellness
Health is the prime requirement for every being, so ongoing income levels do not affect our expenditure on our health. The wellness industry is an emerging branch in the health sector which broadly deals without outer looks and beauty.
So here are a few lines of earnings in this industry which are boosted during the recession:
Gone are the days when an apple a day used to keep doctors away. With adulteration in almost all food products and mechanic lifestyles, diseases and health issues are not expected to hit a recession shortly. Things like life-saving drugs are counted in the list of necessary goods, so the people are never going to compromise in this sector.
It is a period of recession, so it does not mean we won’t visit a doctor even when we are burning with a 102 on the thermometer, or if we have got our leg broken. Gynaecologists and paediatricians are unavoidable at any given point in time.
3.3 Beauty and Wellness
Whether she is your wife or girlfriend, you know you can’t win an argument from her when it comes to her beauty chores. The monthly facial is always a mandate even in times of low monthly sales.
Ladies may restrict them from buying expensive clothing, but they would love to compensate for the lost joy of shopping by purchasing affordable cosmetics. They can find delights in petty things like nail paints or mascaras.
Not only for females, even for the beauty-conscious businessmen, but a relaxing spa or a body massage can also release your numeric tension up to some extent.
4. Food and Beverages
In the sequence of Food, Cloth, and Shelter, food comes first. So no question marks raised when we say the Food industry is not affected by dipping trends in the economy. A country can never be so poor to let everyone starve. So the following segments of this industry see sunrises even in dark days:
Just because your shop or office is locked down, you just can’t shut down the kitchen of your house. You will always need basic kitchen items like wheat, salt, and milk. You can skip on luxurious groceries like Mozzarella Cheese or Worcestershire Sauce, but basics will always be on the shopping list.
4.2 Fast foods
People often complain that their spouses don’t have time to spend quality hours with them. It may sound funny, but the recession is the time for you. Families usually come closer during hard times.
So we can grab on your idle time to cherish a nice dinner date with our loved ones. So the restaurants are welcoming guests with open arms at all kinds of times. A glass of wine while you dine can drive away from the worries of your workplace in a blink.
5. Finance Industry
The phrases ‘recession’ and ‘boost in finance industry’ seem north and south poles at the surface level, but once you dig deeper, you get that relation vivid.
So we can witness growth in the following niches:
It is a myth that high-income earners require accountants more, but in reality, it is the other way round. When you are down in the valley, you need more expertise when it comes to managing your returns. It is then more crucial for you to avail of all the tax benefits or subsidies.
You need to manage the inflows and outflows of the funds you have more carefully when the amount is comparatively small. Presenting a true and fair picture of your firm in the books and records is vital even in a period of recession.
5.2 Financial Consultants
If the bad business days are not tending to end and it is getting tougher for you to cover your variable costs and meet your break-even point, you might be thinking of borrowing some money or getting a loan sanctioned.
Here, in such cases, the role of financial consultants becomes all the more important. People who are running small businesses, franchise owners, consultants, etc. will need financial help as only they are the ones who can guide you practically in an unbiased way.
They would advise you regarding managing your idle funds if any or suggest you the ways to meet the shortfalls efficiently.
5.3 Investment Advisers
The money invested during a recession may get doubled up after the economy recovers or it can happen the exact opposite- the money invested can become zero. So investing during such unpredictable times is no different than gambling.
It is always better to consult an expert in that field before taking a big risk. So the business of investment advisories flourish.
6. Sin Industries 😈
This head may seem a bit out of the track because the topic was revolving around crucial things like money, finance, economies. But somewhere in our heads, we all know what exactly out hearts wish to do when err are depressed.
We want to grab those 60ml pegs or vodka shots, expecting to forget our tensions. So in times of depression, we see an ever-increasing growth in the following areas:
When we talk about happy hormones, we remember that a famous scientific term called dopamine, which is a motivational chemical released by our brain.
Many beverages release this chemical with alcohol being at the top of the list. That is why people tend to shed off their worries when they are drunk. So how can we forget to put the liquor business when we are discussing the ways to deal with depression.
Though the government never has yet and will not approve any marketing of alcohol and tobacco products, yet the consumers never exhibit a lack of awareness regarding them. If not alcohol, the businessman suffering from sheer losses will end up choosing tobacco as an escape. It works the same way as alcohol does, intoxicating and numbing our logic and senses, hence helping our stress to blow out for a while.
The term ‘casino’ is exciting in itself. This term describes a nice place with loud music, unlimited choice of drugs and intoxicants to delight yourself while you play the game of cards by betting handsome sums of money.
What else you need to relax from those ongoing business issues of your office. Probably this is how most of the wealthy yet ideal businessmen would like to spend their empty days.
6.4 Escort businesses
Economic downturns can be boom times for high-end escorts. That’s because escorts have regular clients who visit them several times per month, paying them for comfort and affirmation.
After the dot-com bubble burst and again in late 2006 when the housing market began to flatten, the high-end women reported upticks in business. Their clients were coming to them for a mix of escape and encouragement.
Keep in mind that about 40 per cent of high-end sex transactions do not involve a sexual service. It’s not difficult to imagine that a man’s need for positive reinforcement is amplified when a pink slip lands on his desk.
The trick to surviving lean times is to be patient and do everything it takes to keep your clients. If you can keep your cool, you rarely lose money.
If you’re thinking of trying escort business, we’ve written a complete guide on how to start and monetize an escort business.
Although this is not a comprehensive list by any means, it can give you some clues as to what is and isn’t recession-proof. Monetize.info helped entrepreneurs and small business owners during the 2008 recession and will continue to do so in 2020.
Have any questions about the upcoming recession? Let us know in the comments below, and I will gladly answer.
Note: This article is updated by Daniel S from Monetize.info