What Types of Businesses Do Well During a Recession?
In challenging economic times, some businesses may struggle while others seem to keep right on growing. If you are thinking of starting a business, you might be wondering what kinds of businesses do well in a recession. In fact, there are many kinds of service-based businesses that can thrive in a recession. But the businesses that stay strong when others struggle are those in the home services industry.
There are many reasons why businesses in the home service industry tend to fare better than other types of businesses. One of these reasons is that the demand for home services tends to stay strong even when the economy as a whole isn’t doing too well. This is because many of the businesses in the home services industry provide essential services for property owners. These are typically services that homeowners do not have the knowledge or experience to do themselves. For example, most homes have appliances, HVAC systems, plumbing, landscaping, and other features that need to be regularly maintained and repaired. And most of this maintenance or repair requires special knowledge and tools that most property owners simply don’t have.
Ability to Scale
Another reason why home service businesses do well in a recession is that they are easier to scale up or down when needed. This kind of flexibility and cost-effectiveness is hard to find in other industries. When demand is high, business owners can expand rapidly and relatively inexpensively by adding another service vehicle or team of employees. Costs stay manageable because there is generally no need for pricey real estate or extensive inventory. With the ability to maintain low overhead and flexibility, businesses in the home service industry are uniquely capable of thriving even while other types of businesses may be forced to close.
Repeat Business & Word-of-Mouth Advertising
Finally, businesses in the home service industry are resistant to fluctuations in the economy because they often rely on repeat business and word-of-mouth advertising. As essential service providers, many home service businesses earn customer loyalty and referrals by doing what they are designed to do – provide excellent customer service. Most property owners are more than happy to share positive reviews of a business that offers high-quality services. This is especially true given the fact that so many people have had negative experiences with home service providers in the past. Instead of being an impediment to growth, however, such experiences can make it even easier to earn and keep loyal customers. Once they know that they can rely on a business for the quality services they need, they will not only use your services again, but will likely send everyone they know your way.
Support of a Franchisor
Given the advantages of owning a business in the home service industry, it’s not hard to see why they are consistently ranked among the most recession-resistant options. This is especially true of home service franchise brands. As a whole, these kinds of businesses do well in a recession. Investing in a home service business backed with the support of a respected franchisor can help make any business better equipped to weather a recession.
Neighborly has 15 quality home service franchise brands to choose from. Visit our website to learn more about Neighborly brands and all of our unique franchise opportunities, or call (800) 700-0022 to speak directly to a franchise advisor.