While go-getting, visionary entrepreneurs are rightly lauded for their commitment to a concept and formulating something new, sometimes economic headwinds and instability make setting up a business from scratch a dicey proposition.
That’s when buying a business comes into its own. Unlike starting afresh, purchasing an existing business gives you immediate access to established cash flow, a proven business model, and a loyal customer base. This means that you should start generating a turnover from day one, bypassing the high-risk, low-income early stages that most start-ups face .
There are plenty of other reasons why buying a business makes sense. Benefits include inheriting experienced staff, existing supplier relationships, and operational processes that have already been fine-tuned – if you buy the correct business, that is. The truth is, these factors reduce the trial-and-error phase and lower the risk profile, as you can assess the business’ historical performance before committing. In fact, businesses with a track record of five or more profitable years are statistically more likely to continue succeeding after a sale.
For those seeking recession proof investments, buying in a recession proof industry further cements that stability. Businesses operating in these sectors are less likely to be vulnerable to market shocks and fluctuating demand, making them some of the best businesses to invest in. Below, we have listed 10 recession proof industries worth exploring.
1. Natural resources and utilities
It’s no secret that Canada’s economy is underpinned by its vast natural resources – including oil, gas, and minerals – and public utilities. These sectors provide essential services and commodities, ensuring steady demand and government support even during recessions.
2. Healthcare and pharmaceuticals
Healthcare is universally recognised as one of the most recession proof businesses, mainly because a growing global population with an increasing life expectancy is always going to require products and services that help support it. Demand for medical care, pharmaceuticals and health services remains steady regardless of economic conditions. In fact, healthcare spending often increases during downturns as people prioritise wellbeing.
3. Consumer staples
This sector includes essential products like food, beverages, household goods, and hygiene products, making the availability of these items, well, essential. Consumer staples are consistently in demand no matter the economic backdrop, making them a classic example of recession proof stocks and businesses that shouldn’t really fail. Major companies and fast-moving consumer goods (FMCG) businesses in this field, such as Unilever and Procter & Gamble, have shown steady, resilient growth through multiple recessions.
4. Financial services and accountancy
Financial advisors, accountants, and tax professionals see consistent demand as individuals and businesses seek guidance on budgeting, debt management, and compliance – especially during tough times. These services are crucial for helping people and other businesses to navigate economic uncertainty and are considered strong recession proof investments.
5. Auto repair and maintenance
People may postpone purchasing new cars during a recession, but that’s not to say they don’t need to keep their existing vehicles running. Auto repair shops, mechanics, garages, and parts suppliers are essential services no matter the state of the economy – and their services are not easily deferred, making this a recession proof industry.
6. Home repairs, plumbing and electrical services
Like auto repairs, home repairs can’t be delayed, regardless of the economy. Whether it’s plumbing, electrical, or general home maintenance businesses, they see steady demand as both homeowners and landlords will need to prioritise urgent fixes over major renovations. These businesses are often among the first to recover after economic shocks.
7. Childcare and education services
Working parents continue to require childcare, and in turn, that means educational support remains a priority. This sector includes nurseries, daycare centers, tutoring, and online education platforms, all of which have shown resilience during downturns.
8. Courier, logistics and delivery services
As e-commerce grows , so does the need for reliable courier and logistics services. The pandemic underscored the importance of this sector, with parcel volumes and delivery demand surging worldwide. These businesses are now considered essential and recession resistant.
9. Online retail and e-commerce
Online selling platforms, from large marketplaces to niche e-commerce stores, have flourished during more recent economic downturns. The consumer shift to online shopping is expected to continue, making this a strong candidate for what to invest in during a recession.
10. Funeral services
While healthcare services were featured earlier on in the list, it’s inevitable that funeral services will feature too, as, unfortunately, demand remains constant. Regardless of the economic climate, funeral homes and related services are among the most recession proof businesses.
Making a recession proof investment
Investing in or acquiring businesses within the recession proof industries mentioned above offers a practical strategy for investors looking to weather economic storms. Whether you’re looking for recession proof stocks, considering what to invest in during a recession, or searching for businesses with high success rates, these sectors provide stability, reliable demand, and even long-term growth potential.
For entrepreneurs, buying an established business in one of these industries is often a safer bet than starting from scratch, offering immediate revenue, lower risk,# and a proven model for success.
FAQs
Which industries are recession proof?
Industries that are historically proven to be relatively resilient to economic downturns often include healthcare, consumer staples, utilities and financial services. That’s because these industries typically experience consistent demand even during recessions due to the essential nature of their services.
What happens during a recession?
During a recession, the business community commonly experiences decreasing sales and profits due to reduced consumer spending and economic uncertainty. This can sometimes lead to the business implementing cost-cutting measures, including redundancies and layoffs, reduced capital spending, and often a decrease in marketing budgets. Businesses may also struggle with tougher credit conditions, declining stock prices, and increased competition.
Want to learn more? Here’s some recommended reading on buying a business
- Interested in buying a business? This comprehensive guide offers up everything you need to know, from raising finance to closing the deal.
- Mastering the strategies and psychology of the negotiation phase could help you save a huge amount of money when buying a business. This guide walks you through the process .
We have profiles and listings for businesses for sale that are a part of the recession proof industries mentioned in this article. Browse through the different investment opportunities here .