Have you ever wondered what business could withstand a prolonged recession and bounce back quickly? Today we will talk about businesses resistant to recession and how to achieve that.
Recession and depression in business
What is a recession?
A decline in economic activity that is accompanied by a decline in incomes, an increase in unemployment, and a deterioration in the general economic climate that lasts at least 6 to 18 months.
The 2008 recession officially lasted 18 months. There have been 33 recessions since 1854.
What is depression?
A serious, drastic decline in the economy that lasts for years. The last depression was in 1929. 
Can we even prepare for a recession and how?
We know it’s too late for some advice, but just so you know, it’s always good to live and do business this way:
– Get rid of debt (which is used for excessive consumption, and that consumption is beyond your means). Note that economists always advise using other people’s money to grow your business, but that’s another topic.
– Save for an emergency fund (which covers 3 to 6 months of our expenses).
– Reduce your expenses as much as possible – it is always good to manage your money, manage your budget and not let money manage you, and distinguish between needs and wants and know what is really important and necessary for us.
– Invest in your knowledge and skills and acquire new ones regularly, because the job market is always changing. Just think how many professions there are today that we could not even imagine a few years ago.
– Create multiple types of income, ideally passive.
Some past experiences and businesses resistant to recession
Okay, we have entered a recession, and which companies are recession-proof?
Experience from previous recessions shows that the following industries are the least susceptible to decline:
- Food and beverages, alcohol (beer, wine), confectionery
- Cosmetics
- Repairs
- Cleaning
- IT
- Health/medicines
- Services for elderly people
- Entertainment (cinema, theater)
- Services for pets
- Clothing, shoes for children
- Second hand stores for used things
- Education
- Writing a resume
- Virtual assistants
- Group shopping
- Accounting and tax advice
- Therapists
- Funeral directors (death is the only sure thing)
- Lawyers
- Condoms – in difficult times, we are less likely to choose to have children, but sexual activity continues
- Dating agencies – people are always looking for love
- Affordable luxuries – luxuries we can afford to buy
In short, EVERYTHING NECESSARY AND EVERYTHING THAT SAVES MONEY.
All right, but all that already exists, you’ll say, and there’s a lot of competition. Ok, can you offer something faster, better, cheaper, simpler, with better service, in a different way?
And MARKETING, SALE, QUALITY OF SERVICE?
Marketing in a recession?
Do you need marketing? Of course, and an aggressive one at that.
SALES?
The most important skill in business is knowing how to sell. If you have not learned that yet, it’s high time you mastered it. Without sales, we do not have a business, we have a hobby.
What is the key to success, even in a recession?
QUALITY OF SERVICE.
Recession represents difficult times. People especially appreciate companies that treat them kindly and make them feel good and special.
So, IS THERE HOPE, makes it SENSE to SAVE/START SOMETHING NOW?
Here are a few businesses started during the recession for you to decide for yourself: 
1876 General Electric
1939. Hewlett-Packard
1954 Burger King
1957. Hyatt Corporation
1973 Federal Express
1975. Microsoft
1980 CNN
2008 Uber, Airbnb
The secrets of their success despite external circumstances?
Focusing on service quality and supporting customers – solving their problems, meeting their needs.
The rules are always the same, the essence of the work is always the same. The purpose of the work is always the same – to solve the customer’s problem.
Focus on the customer, systematization of business, brilliant PERFORMANCE, use of modern technology, good people (often cheaper in a recession), taking risks, seeing opportunities where others give up and last but not least – GOOD LEADERSHIP.
For something to change, first WE must change.
Conclusion: We need to transform the company, and we will do that by transforming ourselves first.
More tips for leading companies in recession
We often hear stories of successful entrepreneurs who started their businesses literally from nothing, usually in the garage or at the dinner table, some even in the red.
They all say the most important thing is good people/teams and an idea that drinks water, i.e. a product or service that solves a problem, i.e. adds value to the customer, which is the essence of business. So, someone is willing to pay for what we sell.
All this is true, but money/capital is still needed to grow the business.
Of course, we can always grow organically – from the profit we make from the current business, which we then reinvest. But sometimes that is too slow and there are better, faster and more efficient ways. And, of course, it is important to see if this way fits us, if it is in line with who we are and with our values.
So how do entrepreneurs come up with money to grow their business? From the beginning in different ways, depending on the stage of development of the company and other goals.
11 ways to finance business growth
1. own funds
This is saving with a purposeful intention, which we often mention.
It’s not about saving for the sake of saving, it’s about investing this money wisely so that we can save here to start our business. Most of the time, everyone starts this way.
2. FFF (Friends, Fools, Family)
Translated as friends, fools, family. I have met many (young) entrepreneurs who were lent/given the startup capital by their grandmother, because usually their parents and family were not supportive, sometimes it was friends, but definitely friends, family and fools they trust us in the beginning until there is nothing else but us, our vision, passion and ideas.
3. initial capital
Taking a cash loan or no purpose loan from the bank as an individual and taking loans on credit cards.
Therefore, the willingness to take risks is called one of the key characteristics of an entrepreneur – necessary for success, because it is present from the beginning.
4. crowdfunding
This is when we publicly ask people through certain platforms (e.g. Kickstarter, Funderbeam, etc.) to pay us a predetermined amount of money for a specific project in exchange for various rewards.
In a way, it can be like selling a service/product we want to launch upfront or simply collecting a donation or a stake in something else.
5. local grants and tenders
Many countries encourage entrepreneurship at the state or local (city) level. So, if you have a good project, be sure to pursue it. 
Be sure to sign up – someone has to win.
6. business angels
There are more and more entrepreneurs who have made an exit – they have sold their companies and started something of their own again and/or invested in other people’s small businesses.
There are enough of them, approach them. Personally, my experience has been good. You get not only capital, but also knowledge, experience and mentoring and the most important – contacts.
7. venture capital funds (Feelsgood and Fil Rouge)
See their website for more details, prepare a pitch and good luck.
8. subsidized loans (through development agencies, banks).
9. strategic partner (merger or acquisition).
A good choice for later. If you find a partner with whom 1+1 is at least 3, you have synergy. Continue.
10. the stock exchange
Maybe one day you will go public.
11. Share ownership for employees
Why your employees should not be able to buy/receive company stock/shares.
We are currently looking at ways to make this even better, as many companies, mostly IT, are growing rapidly and want to give their employees shares in the company (as part of motivation).
Final tought
Challenges can be great opportunities. In these challenging times, never forget that tracking incoming and outgoing invoices and automating the process is key. The Invoice Crowd team is still here for you.
