Recession-proof businesses: opportunities you can seize

When the economy falls into recession, households tend to cut back on spending, and many businesses see less income rolling in.

But not all enterprises face the same challenges. “Recession-proof businesses” stay relevant and in demand, even when the economy takes a hit.

In this guide, we’ll break down what a recession is, how it’s defined, and share some recession-proof small business ideas that can stay afloat when things get shaky. If you’re thinking about how to start a business,these ideas may inspire you to launch an enterprisethat can handle some economic pressure.

Already running a business? We’ve also got some helpful tips for making it more resilient, so you can adapt and stay steady, no matter what challenges come your way.

What is a recession?

Around the world, a recession is defined in different ways. In the US, for example, they look at factors like employment and income. But here in the UK, it’s more straightforward, with a recession defined as two back-to-back quarters of negative economic growth – essentially six months where the economy shrinks. 

This is tracked using Gross Domestic Product (GDP) – the total value of all goods and services the UK produces.

Even though individual months can see growth – like when World Cup drinkersunexpectedly boosted UK GDP in November 2023 – it’s the overall pattern across those two quarters that counts. If GDP drops for that long, the economy is in a recession.

How does recession affect a business?

A recession can affect businesses in all sorts of ways, depending on what the businesses offer and how outside factors like interest rates come into play. Here are some of the key impacts.

Decline in consumer spending

When a recession hits, people naturally tighten their belts. Essentials come first, and non-essential spending gets cut. For many businesses, especially those offering luxury goods or services, this drop in consumer spending may mean fewer customers and shrinking sales.

Increased operating costs

Even though revenue often drops, expenses like rent, utilities, and materials can continue to climb during a recession. This puts a strain on businesses trying to manage operating costs, sometimes forcing tough decisions like cutting overheads or scaling back operations.

Higher interest rates

During a recession, the Bank of England may raise interest rates to curb inflation. Higher rates make borrowing more expensive, which can limit access to business loans and make it harder to invest in business growth strategies or manage existing debt.

Supply chain disruptions

Recessions can hit suppliers too, causing delays, higher costs, and sourcing issues. This makes it harder for businesses to keep stock levels up, adding pressure to already struggling operations and potentially delaying deliveries, which can have a knock-on effect on customer loyalty.

Workforce challenges

With the cost of living rising during a recession, employees may push for higher wages, adding to the financial pressure on businesses. Those unable to offer competitive pay or job security can find employee retention a real challenge.

Recession-proof business ideas

Now that we’ve covered how recessions affect businesses, let’s look at some industries that tend to stay steady when the economy dips. 

For each one, we’ve included some business ideas with the potential to do well, even when consumer spending tightens. So, if you’re looking to start your own business and need some inspiration, you’re in the right place.

Healthcare

Healthcare is one of the most dependable industries in a recession because people will always need it, no matter how unforgiving the economy gets.

One area that looks set to grow is care for older adults. The State of Ageing 2023-2024 report shows that 18% of England’s population is now 65 or older, and by 2043, nearly 4.5 million people in this age group are expected to live alone. As the need for care services increases, good healthcare will only become more important.

Here are a few small business ideas to consider:

1. Home care assistance 

While not strictly medical, providing support for older clients in the form of cooking, cleaning, and companionship can play a vital role in their overall well-being There are a number of online sites which connect freelance, self-employed carers with the elderly, and with the ageing population, this is a sector likely to see increasing demand.

2. Fitness and wellness coaching 

If you’re passionate about fitness and exercise, you might consider offering training or wellness sessions, either online or in-person, in areas like yoga or mindfulness. These popular niches require little equipment and can easily be adapted to suit your schedule, though you may need to invest in gaining qualifications to attract clients.

3. Health product retail 

You can explore e-commerce opportunities, for example by launching an online store to sell essential health products like mobility aids or supplements. By incorporating targeted promotion through social media and local advertising, you can reach a wide audience and build a reliable customer base.

Childcare

Demand for childcare can be particularly strong during a recession, as many parents and guardians will work longer hours and need reliable care for their children. This opens up opportunities for those who enjoy working with kids and are looking for low cost business ideas.

Before getting started, you’ll need an enhanced DBS check and possibly Ofsted registration, depending on the services you offer. Once those are sorted, you’re ready to go.

Here are a few ways you could get involved:

1. Babysitting and after-school care 

Dependable childcare is always a precious resource for hard-working households. Offering babysitting or after-school care, perhaps through specialist online sites connecting workers with families, gives you the chance to set your own schedule and make money around your main job.

2. Children’s activity workshops  

If you’re looking for creative ways to make money, running workshops like arts and crafts, sports, or music for kids can be a great way to earn. You can easily organise sessions at local community centres or even outdoors.

3. Tutoring 

The pressure to do well at school can become particularly strong during tough economic times, with parents often seeking extra support for their children’s learning. If you have expertise in a particular subject, you could conduct online sessions through established tutoring websites, or do it the old school way by advertising locally for in-person tutoring.

Pet care

Britain’s love for animals runs deep, and that doesn’t change in a recession. According to the PDSA, 51% of UK households own a pet, so the demand for pet care services remains strong even when the economy slows down.

If you’re good with animals, the pet care industry offers a wide range of business opportunities that can succeed in any economic climate. Whether you’re providing services or selling pet products, there are plenty of ways to get started.

Here are a few ideas to consider:

1. Dog walking

Dog walking is a straightforward way to earn extra money, especially with many pet owners working long hours. You can also offer pet sitting to expand your services. Platforms like Rover and Tailster make it easy to connect with local clients.

2. Pet B&B

If you have extra space, you could offer a pet bed-and-breakfast service, hosting small animals like hamsters, rabbits, or guinea pigs. It’s a great way to make use of any spare room or outdoor area.

3. Pet accessories retail 

Pet care can be a great niche if you’re thinking about how to start an online business. You could set up an online store selling essentials like collars, toys, or grooming tools, perhaps providing a cost-effective alternative to high street shops for pet owners looking to maximise their budget during a downturn.

Home repair and improvement

During a recession, homeowners often focus on improving what they already have rather than splurging on new properties. This creates opportunities for home repair services, from simple jobs like assembling furniture to larger renovations.

If you're exploring how to start a side hustle, offering these services can be a practical way to make some extra cash while helping people maintain their homes.

Here are a small business ideas to consider:

1. Handyperson services 

Help homeowners with small repairs like mowing lawns, painting, or fixing appliances. Providing you have the skills and fitness to do the work, this is a straightforward business to start, and platforms like TaskRabbit can help you find clients quickly.

2. DIY consulting 

You don’t actually have to provide hands-on services to work in the building and design game. DIY consulting is very much a thing, allowing you to guide clients through their own projects by advising on materials, tools, and techniques. You can help them save on professional labour costs and could even run the business online for added flexibility.

3. Home design 

If you have a creative eye, consider offering consulting services to help people improve their living spaces. You can advise on everything from colour schemes to furniture layouts and artwork, with software available for presenting your concepts to clients wherever they are.

Property management

The UK rental market is under pressure. Under the government’s Warm Home Plan, landlords may need to upgrade properties to meet Energy Performance Certificate (EPC) rating C by 2030. 

This would involve significant changes like installing heat pumps or solar panels. At the same time, rising taxes are pushing some landlords to sell. All of this is creating opportunities for business owners providing much-needed property management services for landlords.

Here’s how you could get involved:

1. Energy efficiency and maintenance services 

With fewer tradespeople available, there’s a growing need for people who help landlords implement and manage the energy upgrades necessary for meeting consumer expectations and regulatory standards. You might do this as a freelancer or by setting up a limited company to provide professional services. 

2. Tenant management services 

Another way to capitalise on demand in this sector is to handle tenant communications, property inspections, and the other day-to-day chores associated with owning properties. This could prove especially helpful with new eviction rules and tighter regulations in the pipeline.

3. Short-term rental support 

Holiday lets are facing tricky times too, but there’s still demand in popular areas. You could break into the hospitality sector by setting up a business managing bookings, cleaning, and guest services for landlords who want an easier way to handle their rental properties.

Car repair and maintenance

Cars need regular upkeep, no matter the economic climate. During a recession, new car sales tend to fall, and people hold onto their vehicles longer, which increases the demand for repairs.

On top of that, according to the Society of Motor Manufacturers and Traders (SMMT), the average car and van on the road in the UK is now almost a decade old. With older vehicles needing more attention, providing basic car repair and maintenance could be a great way to forge a new career path or simply make extra money.

Here are a few car repair business ideas to consider:

1. Mobile car valeting

With mobile car valeting, you bring your cleaning service to customers, offering anything from a quick wash to a deep interior clean and wax. No qualifications are needed, but practising on friends’ cars can help sharpen your skills. Starting with local friends and family is a great way to spread the word.

2. Tyre repair and replacement

Mobile tyre services are always in demand, whether for flat repairs or tyre changes. You don’t need formal qualifications, but you will of course need to be experienced with all things tyre-related. Keep in mind that partnering with local garages that don’t offer mobile services can help you reach more customers.

3. Decal installation

Installing car decals is an affordable way to help people update their vehicles cheaply. You can easily learn the process online and improve your skills as you go, and with basic tools and attention to detail you’ll be able to offer a professional service.

Cleaning

Cleaning services are a reliable business option, even during challenging economic times. According to the British Cleaning Council, the UK's cleaning industry is valued at nearly £60 billion, making it one of the top ten sectors. 

While over 75,000 cleaning businesses operated in 2023, many are small or micro-businesses, so there’s still plenty of room for growth. If you're thinking about starting a business, cleaning brings the benefit of low startup costs and the chance to focus on niches like rental properties, home cleaning, or offices.

Here are a few options for a cleaning business:

1. Residential cleaning services 

Offering regular cleaning for homeowners who want to keep their homes looking good is perhaps the most straightforward way to get into this sector. You can get your start through sites like TaskRabbit, grow your business through referrals, and even create your own website further along the way. 

2. End-of-tenancy cleaning 

You could specialise in providing deep cleaning for landlords or property managers between tenants. Renters may also hire these services to help secure their deposit, making it a versatile pick for a cleaning business.

3. Office cleaning 

Many businesses, from retail premises to those based in offices, prefer to outsource cleaning. Offering a reliable, thorough service - perhaps including carpet cleaning for an extra fee - can help you land long-term contracts which provide a consistent source of income for your business.

Freelancing

As businesses look to cut costs, many choose to sidestep the hassle and expanse of hiring employees by using freelancers instead. 

Whether you're exploring how to make money on the side or aiming for a full-time income, freelancing is one of the most flexible recession-proof home business ideas offering opportunities across a wide range of industries.

In 2023, over 4 million people in the UK were freelancing, showing just how popular this option has become. If you’re wondering how to start a business from home, platforms like Upwork, Fiverr, and others make it easy to get your name out there and begin building your own freelance career.

Here’s some of the work you could do:

1. Writing and editing 

Businesses always need clear, persuasive content, but this is especially important in a recession when engaging with customers may be vital for keeping orders coming. Offering writing and editing services to businesses can help them craft the right message when customers are more selective about spending.

2. Graphic design  

When businesses need to stand out, great visuals can do much of the talking. Providing design services like logos, marketing materials, or social media graphics at competitive rates can lead to steady work, especially if you burnish your own brand by posting your creative content on social media.

3. Virtual assistance 

If your skills lie in management rather than the creative side of things, you could become a remote or virtual assistant. This means managing emails, scheduling meetings, or handling data entry for small businesses. You can help clients stay organised and efficient when resources are stretched.

Food and drink

As people look to save money during a recession, many cut back on dining out and opt for cheaper alternatives. 

Well-established meal kit services may benefit, but there’s plenty of space for smaller businesses to succeed too. Even when times are hard, people still want quality food without overspending, keeping demand high for budget-conscious options.

Entrepreneurs can step in with creative food services that cater to local needs. Just remember, if you’re getting into the food and drink industry, you must register with the Food Standards Agency (FSA) 28 days before launching.

Here are a few ideas to consider:

1. Coffee and pastry pop-up stand

Set up a mobile food and drink stand offering affordable fresh coffee and simple pastries outside offices or busy areas during the morning rush. To keep your startup costs low, you could rent the equipment you need from platforms such as Fat Llama, allowing you to work only on the days that suit you.

2. Sandwich delivery

A great way to start a food business without the overheads of running a full café is to set up a business providing sandwiches and other lunch meals to local workers. You can work out of your own home or a professional kitchen, budget permitting, and partner with the likes of Deliveroo to get deliveries done.

3. Handmade baked goods 

The nation’s appetite for delicious treats isn’t likely to abate anytime soon, no matter what the economy decides to do. You can help satisfy the perpetual demand for quality baked goods by making and selling homemade cakes, bread, or pastries at local markets or online.

Hair and beauty

During a recession, people often look for more affordable ways to treat themselves, and looking good can feel like a manageable indulgence. 

When bigger expenses like holidays or new cars are off the table, sales of small luxuries like hair and beauty treatments typically rise, in what has been termed “the lipstick effect”. This idea can be the basis for recession-proof business opportunities such as:

1. Mobile services 

If you have training or experience in this field, you could offer haircuts, manicures, or makeup services directly to clients at home. It’s often cheaper than a salon visit, so caters perfectly to those clients looking to save time and money.

2. Beauty subscription boxes 

If you have a genuine knowledge of beauty products and the latest trends, you could set up a business curating and delivering collections of beauty products to your customers so they can explore and indulge in an affordable way. It’s worth looking into specialist subscription business software which can make it a lot easier to handle the logistics of this kind of enterprise.

3. Online beauty store 

Another option is to launch an e-commerce store selling hair and beauty products. Focusing on budget-friendly versions of items like skincare or hair tools will give customers easy access to the essentials they need at home.

Online selling and e-commerce

We’ve already touched on selling things like hair and beauty and pet care products online, but opportunities in e-commerce go far beyond that. This makes e-commerce an appealing option for entrepreneurs looking into how to make money online.

Compared to traditional retail, online businesses are often more resilient during a recession because they avoid hefty costs like rent, run with fewer staff, and can adapt quickly to changing customer needs.

Here are a few online business ideas to consider:

1. Reselling 

Selling pre-loved items like clothing or furniture is a smart option when people are looking for bargains. You can start by using platforms like eBay or Vinted, then expand to your own website once you’ve built a customer base.

2. Social media sales 

If you’re selling creative products like handmade crafts or clothing, platforms like Instagram and Facebook are perfect for showcasing your work directly to customers. They will also allow you to engage with them and take on custom orders.

3. Print-on-demand store 

You can offer custom-designed products like T-shirts or mugs using platforms like Redbubble or Printify. With print-on-demand, there’s no need to hold inventory or manage shipping, making it a low-risk and highly scalable business model.

IT support

As with cars and homes, people may be less likely to spend on new technology during a recession. Instead, they’ll want to keep their existing devices working well, creating steady demand for IT support.

Whether you’re helping individuals or advising small businesses, IT support can be a reliable way to earn income, especially as consumers look for affordable solutions.

Here are a few ways to get started:

1. Home office setups 

With more people working from home, demand is rising for help with setting up home office systems, from installing software to ensuring reliable WiFi.

2. Refurbishing old devices 

If you have the expertise, repairing old or broken devices and selling them on is a tried-and-trusted way to generate cash. This is particularly appealing when people are looking for cheaper tech options and would prefer to buy refurbished over new.

3. Cybersecurity support 

Provide advice and tools to help with small business cyber security measures like setting up firewalls and training staff on how to avoid common threats. Helping businesses protect their data is an ever-more valuable service as concerns mount over threats posed by AI and increasingly savvy hackers. 

How to make a business more resilient

We’ve looked at industries that tend to do well during economic downturns, and explored ideas for recession-proof businesses. But if you already have a business, there are still ways to make it more resilient, whatever type of work you do. 

These strategies aren’t just for tough times; they’re good practice for long-term success.

Diversify where you can

Relying on just one way to make money can be risky, so think about adding new products or services, or even reaching out to a new target market. Expanding online or branching into small business ideas that complement what you already do can keep things steady.

Reevaluate pricing strategies

Getting your pricing strategies right is key to staying competitive. If you’re unsure how to price a product or service, the best approach is to thoroughly research what similar businesses are offering, and how you can best position yourself against them.

Unless you’re establishing a more premium alternative, then you’ll want to brainstorm ways you can undercut their pricing without compromising on the value of what you do. For example, by finding the most cost-effective suppliers, or by providing a tiered pricing plan to customers.

Strengthen customer relationships

Having loyal customers can make or break businesses, particularly during tough economic times. Responding promptly to queries, engaging via social media, providing personalised offers and loyalty discounts, and simple gestures like checking in with clients after sales are made can help maintain relationships even when budgets are tight.

Keep marketing going

Cutting back on marketing can be tempting, but staying visible is essential. Budget-friendly strategies like learning how to use social media for small business, sending out newsletters, or improving local SEO can help with customer retention and acquisition.

Motivate your team

Figuring out how to motivate employees can make a huge difference to your business through more difficult periods. If your small business budget is tight, being open about challenges, celebrating small wins, and listening to their ideas can help keep morale high.

Get expert help

Having the right support can make a big difference to how your enterprise pans out. A small business accountant or financial advisor can help with everything from taxes to planning for the future. These pros are recession-proof themselves, so finding help shouldn’t be a problem.

Offer flexible payment options

Providing multiple payment options makes life easier for customers and reduces the chances of cart abandonment, whether remotely or in person. 

Depending on the type of business you have, you can consider taking card payments over the phone or via online payment links, or put up QR codes which customers can snap to make purchases. Offering Buy Now, Pay Later can also make all the difference during economic slowdowns.

Leverage technology

Investing in new tech shouldn’t automatically be off the menu during a recession. After all, improving how your business operates can save you money in the long run.

From card readers for easy payments to self-service kiosks which free up your staff to do other things, tech can streamline your workflows and make your business more efficient in testing times. You could also look into using AI solutions like chatbots to take care of customer support and other tasks.