A recession happens when there is a decline in the economic activities in a country. Recessions can last for months or even years. In recent economies, recessions are becoming natural occurrences. During a recession, the gross domestic product of a country is reduced. Recessions affect the entire country because almost everybody gets affected. How will one know if there is a recession in a country? By looking at these things:
- There will be a decline in the country’s gross domestic product (GDP). The gross domestic products are the final goods that the consumers buy and produced in a country within a given period.
- The decline in real income. During a recession, the real income of people will reduce. Real income is the money an individual earns after inflation. Real income is also called a real wage.
- The rise in unemployment. This is the biggest indicator that the economy is going through a recession. The rate of unemployment will increase in a country. Many people will lose their jobs because the companies they are working for are unable to pay for the services they are getting. Companies can also decide to downsize and remain with a few employees and let go of the others.
- Another indicator you can look out for to know an economy is in a recession is there will be a decline in consumer spending. Since the economy is in recession, consumers will reduce their expenditure. This is contributed to the fact that some of the consumers will be unemployed. When people are unemployed, they try to spend as little as they can to survive on the savings they have.
- Another indicator of recession in an economy is the stagnation of industrial production and retail sales. During a recession, people might get fired and rendered unemployed. This means that they will not have a steady source of income. If they had savings, they will use the savings to survive. The citizens of a country will have to cut costs. Goods in the market will take a longer time to be depleted. Production companies will also stop producing many goods if the current goods are not being depleted.
Economies go through a recession. What then causes a recession? Here are some of the reasons why recession happens
- When consumers see that the economy is not going well, they will stop spending a lot of money. Consumers will try to save as much as they can because they are not sure if the economy will rise or fall. This will cause a recession because the economy will slow down.
- High-interest rates in an economy can cause inflation to happen. Consumers will be afraid to borrow money from financial institutions because they are afraid of the high-interest rates. Consumers will thus cut down their spending.
- Economic shock. This happens when an event affects the economy leading to financial damage. A good example is the Coronavirus pandemic. When the Covid-19 virus hit in 2020, most economies got affected and were shut down. This led to high recession rates all over the world. People all over did not know how long the virus would last and the damage it would cause. Consumers all over the world began spending less and saving more which lead to the economy’s recession. Many people also lost their jobs and this contributed to the economy’s recession.
- When there is deflation, a recession might happen. Deflation happens when prices of goods and services decrease over time. When demand for something decreases, people will wait for the prices to go lower. This leads to unemployment and the economic activities of a place will be slower and recession will happen.
- Inflation. Inflation is the rise of prices over time. Excessive inflation can cause a recession. When things are too expensive, consumers will hold back from buying them. This will mean that the producers of such goods and services will experience stagnant sales and they will eventually stop producing the goods and services.
Many businesses and companies get affected when there is a recession in an economy. This has forced many businesses to close down because they can no longer cater to the production costs and sales are low. Some businesses are recession-proof. Here are some businesses that are recession-proof in 2022.
Food and beverage business
This business is recession-proof because people will always buy food. Whether there is a recession in an economy or not, people will always need food.
There are many options in the food and beverage industry one can choose from. A business owner can decide to sell fast food. One can open a food truck and sell a variety of foodstuff. Some people do not have the time to cook because of their busy lifestyles. They will buy readymade food if they get someone making it.
You can also decide to start a bakery. You can offer cakes, bread, pastries, and other baked goods. People love such things. Do some research if you want to start a bakery to find out what baked goods people prefer the most. You do not have to go to school to learn how to bake. Make YouTube your friend. A business owner can get recipes from there.
A grocery store is also another recession-proof business. This is because people will always buy something from the grocery store. Make sure the goods sold there are fresh and of good quality and you will get customers.
People have cars and other equipment at home. After some time, this equipment usually needs to be repaired or undergo some maintenance. Many people do not have the experience needed to do the maintenance and repairs. They will thus be forced to get someone else to do the work.
You can open a motor repair business. You will get customers because people need their cars to be repaired for them to move around. If you have the skills and experience in motor repair, starting a motor repair business will help you earn some more income even during a recession.
You can also choose to do maintenance jobs. You can specialize in doing maintenance on specific equipment around the home like water pipes and electric heaters. Most households need these things almost daily. Repair and maintenance services are one of the recession-proof businesses available.
Babies cannot be neglected. They are dependent on their parents for everything. This means that the parents will not neglect their babies. A starting a baby product business is recession-proof. This is because parents will always need baby products. A business owner can decide to focus on one type of product like diapers and baby napkins. All babies are different. Having a variety of diapers will help parents have a wider selection to choose from.
One can also decide to sell baby clothes, shoes, and essentials. You can sell different clothes depending on the season. Parents also spend a lot of money buying toys for their babies. You can start selling toys to the parents.
The baby product is a recession-proof business and will always grow.
Offer Accounting Services
Regardless of whether there is a recession or not, people will need accountants. This is because business book accounts need to be updated and all the financial positions stated. If you are a professional accountant, you can start this recession-proof side hustle. You will be able to earn a decent income by offering your accounting services at some fee.
This is a recession-proof business. Daycares are needed everywhere. This is because parents are busy and need people to spend time with their children while they are away. If you love children, you can start this best recession-proof business.
You can decide to start a daycare at your home. You can also give the option of going to people’s houses and doing the daycare from there. Either way, if your services are good, most parents will prefer having you around to take care of their children and you will get some income from that.
This is one of the best recession-proof business ideas. If you love cleaning, it will be easier for you to start a cleaning business. Whether there is a recession or not, things should be kept clean. Some people are busy with their work they do not have the time to clean up. Why not offer cleaning services at a fee?
You can also decide to select your niche and concentrate on one type of cleaning. For cleaning, all you need to do is know about the products and equipment you will be using. You should have cleaning equipment such as brushes, detergents, gloves, brooms, mops, and many more.
You can decide to focus on laundry cleaning. This cleaning people’s clothes. Before you open a shop of your own, you can use the community dry cleaners. You pick the clothes from people’s houses, have them washed and dried, fold them, and return them to their owners. People will pay you for offering cleaning services.
Healthcare is a recession-proof business. Everybody will need your services at some point. If you are a qualified healthcare practitioner, you can offer your services to people. Elderly people’s healthcare is in high demand. It is because many elderly people do not have people to take care of them. The elderly ones need assistance. This is where you will come in. You can offer to assist them. You can do this by ensuring they have eaten their food, and taken their medicine and supplements. Help in making their life a little more comfortable.
Delivery and Courier services
The delivery and courier business is recession-proof. It is because someone somewhere will always want something delivered. You can collaborate with other stores for you to be the person in charge of doing deliveries.
For this type of business, having a bicycle, motorbike or car will be advantageous. It is because you can use them to do the deliveries you are supposed to. As your business grows you can start a delivery company and hire more people who will be doing the deliveries.
Online Writing and translating
This is a recession-proof business. If you are a good writer, take advantage of that. You can open accounts on sites like Fiverr and Upwork and share what you have done. If people like your articles, they will keep requesting you to write more articles for them. You can do this side hustle even if you are fully employed. Content and article writers get a good source of income from writing.
If you know more than one language, you can also use your skills to teach others. On the same websites, you can as for translating jobs and get a second source of income.
Pet grooming and daycare
Many people have pets. Due to busy schedules, pet owners hardly have time for their pets. If you like pets, you can start this recession-proof business. You can assist the pet owners by taking their pets for walks.
If you are a qualified Vet, you can offer your vet services to sick pets.
Selling pet accessories and toys is also a business you can start. Pets also need to eat. You can also start selling pet food to pet owners.
There are many recession-proof businesses. All you have to do is find your niche and start that business. Before thinking of starting a business consult an accountant for advice.