9 “recession-proof” businesses to survive and thrive in economic downturn

Hey UpFlipers,

According to a National Association of Business Economists survey, a quarter of economists think we’re due for a recession this year.

Seems like the worst time to start a business… but some models are doable when the economy’s down.

Starting in a recession can mean:

• Lower costs

• Less competition

• New market needs

And you learn how to grow under tougher conditions.

Of course, not all businesses are created equal.

Some weather the storm FAR better.

They’re the closest you can get to “recession-proof.”

Keep reading for some biz ideas that’ll last through good and bad times…

9 “recession-proof” business models to survive and thrive in economic downturn

In general, a “recession-proof” business provides a product/service people need regardless of circumstances.

People might cut back on their spending. Demand for your product/service could fall to some degree.

But many still need these companies when the economy’s down:

Cleaning’s hard work, but houses and commercial buildings need it. So plenty will hire cleaning services.

These businesses have low startup costs, and it's easy (relatively speaking) to learn the basics. 

If interior cleaning sounds up your alley, check out this free course taught by Cristobal Mondragon, founder of $140K/month Queen Bee Cleaning Services.

2. Pressure washing

Homes and commercial properties also need their exteriors cleaned regardless of the economy. That’s where pressure washing businesses help.

Startup costs can be higher than cleaning services — usually a few thousand dollars — due to the equipment involved. 

This course, taught by $2M/year pressure washing entrepreneur Joshua Brown, will show you the ropes and shortcut your learning curve.

3. Mobile car wash and detailing

Like real estate property, cars need cleaning.

But some car owners don’t like automated car washes. Hand washing and detailing can get areas automated washes can’t…

And hand washing/detailing is generally safer for the car’s paint.

Now, car cleaning is not as vital as cleaning a home. You may have to target a wealthier audience.

They’re not struggling to afford a hand wash… and want to preserve their luxury vehicle’s look.

Zooming out:

These first three businesses, in general, are popular among more affluent clientele for the same reason.

All that said, don’t miss this interview with a young, wildly successful car detailing entrepreneur.

4. Laundromat

People need clean clothes in any economy. So laundromats resist recessions quite well.

Unlike the first three business models, laundromats won’t work in wealthy areas. Everyone has washers and dryers at home.

They do best in low to middle-income areas — people who may be unable to afford washers and dryers. 

Plus, you provide a vital service to these communities. Positive impact AND profits.

Learn more about laundromats by watching our interview with Jeff Orgill, founder of Rosie Wash Express Laundry.

5. Freelancing

Freelancing lets you sell a skill, like writing or graphic design, to clients. It costs almost nothing to start and offers plenty of flexibility.

Oh, and if you already have a skill (maybe you’re a programmer by day), you have a head start.

Granted, demand for freelancers can drop in a down economy. 

But, at the same time, freelancers can be more cost-effective than employees — companies that need what you offer may hire you to get the job done if they can’t afford an employee.

You can start freelancing on platforms like Upwork, or you can try to land private clients through job boards, cold pitches, networking, and other methods.

6. eCommerce

Admittedly, eCommerce might be the least recession-proof on this list. But that’s largely because of the variety it offers.

Some products are luxury items and plummet in sales during a recession. Others are things people need, and so resist recession better.

But eCom’s much cheaper to start than a brick-and-mortar store and will weather storms better.

Think back to 2020. Despite a global shutdown, and a haywire economy…

eCommerce sales EXPLODED. 

Part of that was stimulus, yes. But people with money were trapped at home and, therefore, online shopping a lot more.

And with a few strategies (covered later), you can make most eCom businesses recession-proof.

7. Trucking

The world will need trucks for as long as people need to transport goods. Even when the economy takes a hit.

The only risk is a global, supply-chain-shaking shutdown like in 2020. But those aren’t exactly common…

And the right clients can keep you afloat.

For example, the head of AJG Transport, Andrew Gomez, had Amazon as his first client (full interview here).

Amazon sales skyrocketed in 2020. If you had been trucking for Amazon, your business may have been fine.

Here’s another interview with a young trucking entrepreneur (he’s only in his early 20s!).

8. Vending machines

People won’t stop buying candy bars or sports drinks from vending machines if the economy’s in the toilet. 

Well, they might not buy from stores, but they will buy from vending machines.

That’s right — you can own vending machines and make money off the sales. 

Vending machines in high-traffic areas (like an airport) or places with captive audiences (like an office) could = steady sales.

But before you buy a vending machine, watch this free masterclass taught by a vending business owner doing almost $60K/month in revenue.

9. ATMs

Yep, you can make money off ATMs, too. 

People still need cash when the economy’s down for things like:

• Bar/club cover charges

• Cash-only bars

• Tipping servers

• Emergency money on hand

• Church tithes/donations

• Tolls/parking

And some people prefer to use cash for lots of other things.

You offer people convenient access to cash for these purposes, and earn money from transaction fees.

3 key factors that make for a viable “remote local” company

I’m subscribed to a meat delivery box. High-quality, grass-fed stuff.

When inflation picked up, and my financial situation was up and down…

I made sure to carve out room in my budget for that box. 

You want your customers to do the same thing. You want to keep them around regardless of the economy.

You need retention.

Here’s why:

• The probability of selling to existing customers is 14x higher than new customers (Forbes)

• Returning customers spend 67% more than new customers (BIA Advisory)

• Almost 60% of US consumers say once a brand earns their loyalty, they’re loyal for life (Acquia)

• 60% of loyal customers tell friends about their favorite brands… that’s free “warm traffic”, meaning the new customers immediately have a level of trust (Yotpo)

(These stats are most relevant to eCommerce. However, the same concepts — easier sales, more revenue/customer, etc — apply to almost every business.)

Think about it:

These customers/clients know, like, and trust you/your offer.

If they need what you offer, they’ll choose you to avoid the pain and uncertainty of finding a new business.

And if you continue to deliver excellent results, they’ll fit you into their budget and spend more with you.

Furthermore:

According to eCommerce platform Simplicity DX, acquisition costs have TRIPLED in the past few years.

But when you have loyal customers/clients…

There’s no need to dump all your money into acquisition constantly.

Doesn’t mean you drop acquisition. Nailing retention makes acquisition easier from a financial standpoint.

Lower acquisition costs for repeat customers = wider profit margins = more money to play with.

Use that to test new acquisition methods, then double down on what works. 

The result:

A steady stream of lucrative clients/customers. Hard to beat that.

Keep reading for some tactics and strategies for customer retention…

6 strategies for bulletproof customer loyalty and retention

A “recession-proof” business gives you a leg up on retention. 

But you still must earn repeat business and endless loyalty from those clients/customers.

After all, other people are running these businesses, too.

Here are some strategies to keep your customers:

1. Sell recurring contracts

Neel Parekh, founder of remote cleaning company MaidThis, revealed his secret for closing recurring clients:

He asks potential clients if they want monthly, weekly, or biweekly service…

NEVER a one-off clean.

They can get a one-off clean if they want. But they have to ask for it specifically. Neel frames his service as a recurring thing.

(Check out our interview with Neel here.)

Depending on your business model, you could even throw in a small discount to close a recurring sale.

If you can’t sell a recurring purchase up front, try to upsell it on the back end after the customer enjoys an amazing result.

2. Provide exceptional customer service

Go above and beyond with customer service, and you’ll earn customer appreciation.

Make customer service accessible from many channels. Phone, email, and a contact form are a good start.

Respond to customer service requests promptly, and be empathetic and friendly. 

If the issue is serious, consider adding a discount or something similar as an apology.

That last tip can sometimes turn not-so-happy customers into repeat customers.

3. Sell complementary products/services

Florida-based Wizard Wash sells pressure washing on the front-end…

But many customers need their driveways prettied up. So Wizard Wash upsells paver sealing.

Customers now know Wizard Wash for more things. So if they need either service, they’ll come back to the brand.

(Check out our interview with Wizard Wash’s founder, Chase Lille — he hit six figures by age 18.)

Another example:

Laundromats could add pickup and delivery. Customers pay more for convenience.

Business is just solving problems for money. Solve one, then sell a product/service that solves the next problem.

4. Create a post-purchase follow-up experience

Automate a post-purchase follow-up email and/or SMS sequence. 

Thank the customer for their purchase, show them how to get the best results, and be open to questions/concerns.

Later on, check-in and see how they’re doing.

5. Offer loyalty rewards

You’re more likely to come back and spend at a place when you earn cashback or rewards.

Same thing with your customers.

Plus, you don’t “lose” the money up front like you would with a discount. The customer must make a full-price purchase before redeeming their rewards.

Software like Smile.io make it easy to create and manage a loyalty program.

6. Create a referral program

Rewarding happy customers for referrals has several benefits:

• MORE loyalty

• Lower acquisition costs

• “Warm traffic” — referred customers come in with more trust

Make referring easy with personalized links and referral tracking. Software can help.

The best time to ask for a referral is after the customer leaves a good review — use software to automate referral requests after positive reviews.

To wrap it all up…

Recessions will always be a little scary.

But the good thing about running a business — you aren’t at an employer’s mercy.

If you start it on the side, and a recession costs you your job, you at least have a backup plan.

If it’s your full-time thing, your income doesn’t dry up in one fell swoop like a layoff would cause.

In either case, the right model and some hard work can get you through tough times and help you come out ahead.

The key is retention. Build an unbreakable bond with your customers, and you’ll be ready to take on whatever the economy throws at you.

You can do it!

Woah, check these out…

💪 More tactics and strategies to survive and thrive in a tough economy

💰 Read our classic guide to becoming an entrepreneur

📈 From $5 to $10M/year cupcake business… during the 2008 Great Recession

🎙️ Find more inspiring stories and practical advice on the Upflip podcast

There are three ways to join UpFlip:

 ✔️ Get on the waitlist for our highly anticipated Start, Run, and Grow a Business course

✔️ Don’t miss this brand new interview: How one man turned the 2008 financial crisis into a $3M/year real estate success

✔️ Join our YouTube community and be the first to catch new interviews with successful entrepreneurs.

What did you think of this newsletter?

It'll only take a second, and your feedback will help us improve. If you have suggestions or special requests, submit them here.

Share this newsletter