Is There Such A Thing As A Recession Proof Business?

Posted by Allison on 1 April 2009, 16:24

Some people would argue that there isn't (except perhaps for crucial services such as those provided by undertakers and the like), but perhaps we should look at this from another angle. 

We would be better off asking whether it is the business owner that is recession proof rather than the business itself.  After all, we constantly see businesses that succeed and businesses that fail – and that happens no matter what the economy might be doing.

So what separates success from failure – especially when times are hard?

Undoubtedly it is the mindset of the person running the business.  Many people are content to sit back, take orders and sell stock while times are good, without trying to develop their business in any way.  No matter whether they sell goods in this country or abroad, or what currency they sell them in, they settle and get used to the situation they are in.

And when hard times hit they do very little to protect themselves against the storm.  And that is precisely why some businesses are more vulnerable to going under than others.

It is quite normal to look at cutting costs when the profits aren't quite what they should be.  But sometimes people cut back on the wrong things.  One of the most expensive outlays is quite often advertising, and that is the first thing that many business's trim right back on.

But unfortunately that means less people find out about their business - and less customers means less profit as well.  So in a lot of ways people can make sure their businesses stand a much better chance of making it through a recession, simply by taking a long hard look at their business and seeing where they can make good changes instead of bad ones.

It's not absolutely crystal clear of course.  There will always be businesses that go under when a recession hits.  But what do these businesses have in common?

Quite often it is the fact that their operating margins are very small.  Many high street stores become the first ones to run into trouble, purely because their overheads are so high.  And yet you don't hear about too many internet businesses suffering the same fate – mainly because their overheads are tiny when compared to their high street counterparts.

In short, the main thing you need to think about if you own your own business is whether or not you are supplying what people need.  If they are looking for bargains because they have less disposable income and you have the bargains they want, then you will bag that customer.

No one can fully recession proof their business.  But you can take the pro-active route and do whatever you can to reduce your chances of going under at a bad time.  If you sit back, read the news headlines and worry about what may or may not happen, you are laying yourself open to being affected by the economy in a big way.

But if you take charge of your business and make alterations as and when you need to in order to stay afloat, you will probably still be there when the recession passes and things start getting back to normal.  For more information about how home based businesses can get through a recession, Submit Your Article has a great piece to help you.  You will find it at