Have you ever thought about starting your own business? I certainly have. But the thought of starting something new is scary, especially if it requires leaving a well paying, full-time job with good benefits.
But what if there was a recession-proof, small business opportunity with high probability of success? Might you, an aspiring entrepreneur, be bold enough to take the leap?
In this article, I’ll review 7 recession-proof small businesses not even artificial intelligence could lay to waste.
1) Hardware Store
Annual Revenue: $2,000,000 to $3,000,000 (Ace Hardware)
You might think there’s no use for the traditional mom-and-pop hardware store because it can’t compete with the likes of Home Depot and Lowe’s. But I can tell you from personal experience, you’re wrong. It comes down to location.
My father is the owner and operator of three hardware stores in rural West Virginia. He’s been in business for 15+ years and is one of the larger employers in the county.
One of the sources of his success is location, which is rural and outside the reach of big-box retailers.
No matter what the future may bring, whether it be the Metaverse or A.I., humans will always need a place to live and work. Thus, a hardware store has no expiration date, and falls into one of my favorite spending categories: non-discretionary.
Houses, apartments, condominiums, commercial buildings, etc… will always exist. As will leaky toilets, busted light fixtures, hot water heaters, and faulty GFCIs.
As most homeowners will attest, when it comes to hardware, you need it now – not tomorrow. And gross margins of +30% isn’t too bad either.
2) Barber Shop or Hair Salon
Annual Revenue: $500,000 to $600,000 (Great Clips)
No matter how hard I try, I can’t stop my hair from growing. I probably shouldn’t complain. Not everyone is so blessed.
So, every 4-5 weeks I drive to the barber or salon for a $23 hair cut ($18 plus tip). It’s an essential service (the Covid pandemic taught us this), and a business that will be around as long as humans have hair.
You don’t need to be a barber or hair stylist to own a shop or salon. Great Clips, one of the largest salon brands in the world, attests to this (read more about franchise opportunities here). The Great Clips in my area are owned by a small group of investors with multiple locations. None of them is a stylist.
Sport Clips, another popular salon brand, also offers franchise opportunities.
Neither of these is an endorsement, simply options. Aspiring entrepreneurs can always open an independently-owned shop or salon.
3) Lawn Care Service
Annual Revenue: $300,000 (industry average)
Similar to hair, grass also never stops growing. So from April to October, I’m guaranteed the weekly chore of trimming and mowing grass.
Personally, it’s a chore I don’t mind. But I estimate around 30% of people in my neighborhood pay to have their lawn mowed each week.
Plus, lawn care isn’t limited to mowing lawns. Lawn care businesses also offer landscaping services such as mulching, planting shrubs, trimming bushes, laying rock, and yard treatment.
There’s no shortage of competition in the industry. But recession or not, grass will continue to grow, and homeowners will continue paying to have it cut.
4) Day Care Center
Annual Revenue: $18,000 per child (industry average)
You may think day care would be one of the first expenses a family would cut during a recession. If mom or dad lost their job, that may be true. But I believe it would only be temporary.
Because if times got tough, mom and dad would need to find a job, any job, to make ends meet. That might mean working more or abnormal hours. During such times, parents may be more prone to place their children in day care while they work to bring in additional income.
Not to mention, parents tend to want the best for their children. Which means they spare no expense, even when money is tight, on high quality day care. They’re willing to pay big bucks to place their children in a safe environment offering top of the line services.
So if you enjoy working with kids, consider opening up a day care. It’s a gift that keeps on giving.
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5) Automotive Repair Shop
Annual Revenue: $300,000 (industry average)
Automotive repair shops are a recession-proof business. Because when money is tight, vehicle owners opt to maintain their existing vehicle versus replacing it.
So, they head to the nearest AutoZone or O’Reilly’s for repair parts, then to the local automotive repair shop for vehicle service.
This explains the resiliency of auto parts stocks like AutoZone (AZO) during recessionary times. For instance, AutoZone was one of a few stocks whose stock price increased during The Great Financial crisis of 2008.
If you don’t mind getting your hands dirty and are looking for a resilient business, consider opening up an auto repair shop.
6) Plumber, Electrician, or HVAC
Annual Revenue: $25-$30 per hour per employee (industry average)
This bundled group of trades is always in high demand for reasons akin to a hardware store. It’s unfortunate, but stuff breaks.
That refrigerator in the kitchen is running in place 24/7. Your 3 year old flushing non-flushable wipes down the toilet when you’re not looking is taking a toll on your plumbing. And that extra electrical outlet your wife has been begging you to install isn’t going to install itself.
Plumbing, electrical, and HVAC are services you hope to never need, but most certainly will at some point in life. This is why they’re excellent recession-proof opportunities for entrepreneurs who enjoy working with their hands. Or know someone who does.
7) Funeral Services
Annual Revenue: $1,000,000 (industry average)
I hate to end this list on a depressing note, but you can’t deny the funeral service business will always be in demand. At least until the good Lord decides to call us all home.
It takes a specific type of individual to enter this field. Personally, I couldn’t do it. But with a limited number of willing participants, and death being the final act of all of us, it’s a lucrative business with endless clientele.
Not for the faint of heart, but recession-proof, nonetheless.
Bottom Line
Entrepreneurs looking for a small, recession-proof opportunity may do well starting one of these businesses. But don’t be fooled into thinking any are an easy button to financial freedom. Though they certainly could be if done right.
While it helps to choose the right business, no business will be successful without efficient operation, financial discipline, and a lot of hard work.
Starting any one of these seven businesses won’t guarantee success, but it can certainly increase the probability…for those willing to take the risk!
