Choosing a Recession-Resistant Industry

by Joan Trinka

Investing in your own business is a much more serious and long-term commitment than simply choosing a field in which to be employed by someone else. As we’ve seen with the recent economic meltdown, some industries fare better than others in difficult financial times. The following are a few points to consider when thinking about the recession-resistance of a given franchise system’s industry.

1) History
What has happened to the industry in past economic downswings? If you are researching a franchise now, you only have to look back a couple of years to find out. Take pet care and services: While the percentage of pet ownership has remained the same since 2008, actual spending on pet goods and services has increased significantly, from $43.2 billion in 2008 to an estimated $50.84 billion in 2011. Pet care is the fastest-growing U.S. retail category behind consumer electronics (APPA 2007-2008 National Pet Owners Survey). In fact, the pet industry has nearly doubled from just a decade ago, and is expected to just keep growing.

2) Need
Who NEEDS your product/services—and will they still spend the money to address that need in difficult economic times? Health care is a great example of an industry in the “need” category; germs and illnesses don’t go away in a down economy. Although people may cut back spending in this area and take more risks than they would in times of prosperity, health care spending remains more than a priority; it’s a necessity.

3) Value
How much do your consumers value your chosen industry? Even if your product/service isn’t a need, you can still survive and even thrive if you are at the top of your consumers’ want lists! The beauty industry is a picture-perfect example; for women, beauty products (especially skincare items) are often the last discretionary spending items to go. It has even been suggested that relatively lower priced discretionary products, like makeup, show an increase in sales during recessions because they are bought instead of the more expensive items/services women are forced to give up (like dresses or cosmetic surgeries).

For an aspiring entrepreneur, in good times or bad, it’s crucial to lower your investment risk by researching the recession-resistance of any potential industry.

Joan Trinka
Director of Development
Bark Busters USA

Learn more about Bark Busters at topfranchises.franchisebusinessreview.com.

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