With supply chain issues, high energy prices and the GDP falling, the UK is heading rapidly towards a recession. However, that doesn’t mean it’s a bad time to buy a business. On the contrary, there are plenty of lucrative opportunities to be had when the economy is struggling.
Investing in a recession-proof industry will ensure you stay afloat during the downturn, and can sell up for a profit once the economy bounces back. If you’re thinking of making an acquisition, read on for a list of recession-proof businesses to look into.
What Are the Most Recession-Proof Industries?
Firstly, what is a recession-proof business? Simply put, it’s a business not affected by recession. When there’s a drop in economic activity, many companies struggle to stay afloat due to a fall in sales and increased overhead costs. But others survive and thrive – and for some industries, “recession-proof” can even mean an increase in profits.
During hard times, most people are quick to cut out non-essentials and luxuries. So, the best recession-proof businesses tend to be those that provide necessary products and services. Find a company for sale in one of these nine top industries.
1. Food and Drink
Many industries that thrive in recession revolve around food and beverages. After all, even when money is tight, people still need to eat and drink.
Grocery stores and supermarkets often do better during a recession than in good economic times. That’s because people cut down on nights out and expensive meals, opting to cook at home instead.
Surprisingly, the sale of treats such as alcohol and chocolate also tends to increase during a recession. Although they’re not necessities, “pick-me-ups” like these sell well when times are tough.
2. Discount Retailers
The best recession-proof business is one that is not only essential, but also helps people to save money. For this reason, discount retailers are among the most successful when the economy is struggling.
When people are cutting back on spending, they’ll try to seek out the best deals wherever possible. This applies to every purchase, but shops selling essential goods (such as food, cleaning products, clothing and personal care items) are particularly lucrative.
3. Transport and Logistics
As we all know, the pandemic has had a devastating effect on the economy. But even in these tough times, businesses involved in transport and logistics are still going strong.
This is because freight, haulage and other transport companies play a vital role in keeping supply chains running. During downturns and upswings alike, people still need to get goods from A to B – and businesses are willing to pay a premium for a reliable service.
4. Repairs and DIY
When people can’t afford to buy new products (such as technology, furniture and appliances) they’ll often opt to repair or upgrade their existing belongings instead. This is good news for hardware and DIY shops.
Furthermore, even during a recession, home and car repairs must still go ahead. This means repair companies, contractors, mechanics and garages still tend to do well during an economic downturn.
5. Children’s Supplies
If there’s one thing that never changes, it’s the circle of life. Regardless of the state of the economy, families will continue to expand, and parents will need to buy supplies for their children.
This makes businesses that sell children’s goods – such as baby formula, nappies, clothes, toys and educational materials – excellent recession-proof businesses. The same goes for childcare providers such as nurseries, as parents may need to work more hours in order to pay the bills.
6. Funeral Services
On the other side of the coin, people will still sadly pass away during a recession. This means there will always be a demand for funeral services, making them one of the most recession-proof businesses around.
People may cut back on luxury purchases during a recession, but they’ll still want to give their loved ones a send-off that befits their life. Funeral homes and crematoriums will continue to do good business and stay afloat despite the economy.
7. Pharmaceuticals
The healthcare industry is always in demand. No matter what the state of the economy, people will always get sick and need medical treatment.
So, businesses that supply pharmaceuticals and other medical products – such as chemists and pharmacies – are often recession-proof. Sales of first aid, medication and personal healthcare products remain stable regardless of the economy.
8. IT Services
In the modern world, almost every type of business depends on technology in some way. So, even during a recession, companies will still need to invest in IT services and upgrades.
This means businesses that provide tech support, software development and other IT-related services are often recession-proof. When times are tough, it’s even more important for companies to keep up with the competition and provide a good service to customers.
9. Accountancy and Financial Services
Last but not least, businesses involved in financial services are often recession-proof. When money is tight, both companies and individuals need to keep on top of their spending and make the best financial decisions.
This means there will always be a demand for accountants, financial advisers and other money-management experts. So, if you’re thinking of starting a business in this sector, it could be a wise choice.
Buy a Recession-Proof Business with Chelsea Corporate
If you’re looking for a recession-proof business to buy, Chelsea Corporate can help. We are buy-side business brokers with a focus on off-market mergers and acquisitions. We expertly vet every business in our exclusive database to bring our clients the most profitable opportunities.
Contact us and our experts will match you with the perfect business in your preferred industry. We’ll guide you through every stage of the acquisitions process, from initial negotiations to closing the deal.
To get started, call Chelsea Corporate today on +44 (0) 20 3011 1373 or email info@chelseacorporate.com.