With inflation at a historic high, many fear that a recession is right around the corner. While this could negatively impact many businesses, not all businesses are high-risk during an economic downturn. There are some types of businesses that consistently weather hard economic times better than others. In some industries, a recession can actually be a good time to start a business because the costs can be lower than they would be when starting a business during an economic boom.
Over 5 million new businesses were registered in the U.S. in 2022, representing a 23% year-over-year increase. The best way to position yourself for continued success amidst a recession is by working in a recession-resilient industry. Or better yet, you might consider building a better future by owning a recession-resistant franchise.
What Is a Recession-Resilient Business?
During a recession, consumers tighten their budgets. They stop spending on products and services that they want and instead focus on the ones they need. To operate a recession-resilient business, owners need to provide essential products and services that people and businesses require regardless of the economic climate.
A recession-resilient business is one that:
Provides a need, not a want (either in service or product form)
Offers a product/service that consumers need on a recurring basis
Needs little initial investment
Requires low overhead.
Best Recession-Resilient Businesses
So what businesses do well during a recession? Businesses in the home repair and maintenance industry involve a number of services that consumers deem essential. These services will continue to be in demand, even during recessions.
Americans spend more than $400 billion each year on home improvements and repairs, a figure that has grown by more than 50% since the end of the Great Recession in 2009. Not only do homeowners like the convenience of working with home repair and maintenance businesses, but there are also many tasks better left to the professionals. Some of the best-performing businesses in a recession include…
Cleaning Services
The pandemic has reinforced the focus and concern on cleanliness and sanitation. Cleaning services are one of the few businesses that flourished during COVID-19. Jobs in hygiene and sanitation are now more important than ever.
For those in the commercial cleaning industry, there are many laws and regulations that require public companies and organizations to maintain certain cleanliness standards for health and safety. Utilized by both commercial and residential customers, there is a recurring need for the service, stabilizing the customer base.
If this sounds like an industry that you are interested in, you may want to look into starting a franchise like Molly Maid.
Home Repair and Improvement
Regardless of the economy, things in the home will break down over time. When money is tight due to a recession, people are more likely to repair versus buy new. According to the Angi State of Home Spending Report, homeowners spent an average of $3,018 on home maintenance and $2,321 on home emergencies in 2021. Home improvements can also increase the value of a home, which is particularly important when a recession threatens to do the opposite.
If home repair and improvement interest you, learn more about starting a Mr. Handyman franchise. Other home repair and improvement businesses include…
HVAC (heating, ventilation, and air conditioning): These businesses install and maintain ducts, furnaces, and cooling units in every house and building. Their services are needed in new home construction and older home repairs. Is an HVAC franchise right for you? Learn more about AireServ!
Plumbing: The plumbing industry generates $134 billion a year. A broken water heater, clogged toilet, or leaky pipe doesn't care what the economy is doing. Over 12 million US adults have needed a plumber more than three times between 2021 and 2022. If a plumbing franchise piques your interest, learn more about Mr. Rooter Plumbing.
Electrical: Every home and business uses electricity, requiring the work of skilled, licensed, electrical workers. Innovations, such as electric charging stations and smart home technology, are creating new opportunities. The installation of electric charging stations alone will increase the demand for electricians by 25% over the next 20 years. If an electrical franchise sounds like the right fit for you, learn more about Mr. Electric.
Landscaping
Commercial businesses will still require landscaping services during a recession and also some homeowners, particularly those in HOA communities who have to adhere to strict landscaping guidelines, would rather leave landscaping to a professional. Along with being a recurring service, landscaping is a business with low start-up costs and overhead.
If you’re considering a landscaping franchise, learn more about The Grounds Guys.
4 Reasons Home Services Businesses Are the Best Recession-Resilient Franchises
Entrepreneurs looking for recession-resilient business ideas should consider starting a franchise that fulfills a need. Starting a franchise that provides essential services and resources, such as those found in the home repair and maintenance industry, is an opportunity to fill a need and establish a successful business.
These are the top reasons why home services businesses are recession-resilient:
Many parts of the home services industry are essential.
Many homeowners prefer to leave maintenance to professionals.
Many homeowners like convenience.
Times are changing, and so too should the way home services are delivered.
Own a Recession-Resilient Franchise
Owning a franchise helps mitigate startup risks compared with owning a traditional business. The supportive network, tested business model, and operational resources can make starting a home service franchise one of the best careers possible during a recession. Be empowered to build the life you’ve dreamed of and experience the benefits of business ownership.
Not sure where to turn? We can help. FranCoach is a national search firm dedicated to working with individuals who are interested in owning a franchise. We've partnered with over 600 of the top franchisors in the country, spanning nearly 70 industries.
Our number one goal with our clients is to help them find the absolute best franchise for them to own. Reach out to us to learn more about potentially becoming a franchise owner. There’s never any fee for our service, so why not take the first step today toward your better tomorrow?