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Guide: how to create a recession-proof business

man celebrating profit in a recession
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If you are a business owner concerned about a recession, this blog is for you. If you are looking for ways that you can create a more stable income regardless of the economic situation, this blog is for you. Keep reading to discover how to create a recession-proof business.

Business Creation is all about opportunity!

What many fail to understand is that regardless of the economic outlook, you can create a thriving business. Here are a few key points to understand when you are entering or already in a recession.

People have needs

One of the biggest take-aways from this is simply that people have needs. The best way to start a business is to start solving the needs of those in your community.

Look around you and learn about what people NEED. Not just what they want.

The best way to do this is to talk to people. Go for a walk, knock on doors and simply ask people “what is it you need today, tomorrow, a month from now?”

Most people will respond with “I need more money!”. Follow up with why and understand why they need more money.

In the follow up details is where you will find the opportunity.

Bad businesses will disappear

When we look back throughout history there are plenty of recessions. We find that 2 things happen during recessions:

1. Well run businesses that take care of their customers and employees will weather the storm.

2. Poorly run businesses will shut down.

You can spend lots of time looking into “why” this happens but it is really simple. The business didn’t meet the needs of the customers. Because of this, the business couldn’t meet the needs of it’s staff either.

Recessions and hard times are a true test of a business and the systems they have in place.

This is where having a qualified business coach comes in to help direct you on how to run a better, stronger, more profitable business.

Hiring cost will balance out

If you are just starting or you are currently employing a number of people, you may start to worry about employment cost.

When you hire people in the “good times”, things are more competitive and wage demands are higher.

This changes with a recession. As businesses are being pinched, squeezed and tested, many will close down which means the hiring pool has just grown. There is now more competition in the job market.

Depending on your workplace policy and business practice, some people may be let go or leave on their own. This also opens the door for you to hire more qualified people at a lower rate.

Remember that recessions are never a win win situation. When someone wins, someone else loses and thats the way it is. The best thing we can do is love and support those around us.

Recessions are a normal cycle

History has shown us that recessions are a normal economic cycle. This is to be expected. The economic cycle contains a period of exponential growth. The growth only lasts so long before a reset is required. Recessions tend to level the playing field and balance the economy out.

Unfortunately recessions are hard on a lot of people. Businesses that are in tourism and travel tend to suffer as well as business that are poorly managed with little preparation.

If you study a bit of history, you’ll be prepared for recessions because history repeats itself over and over again.

Now Let’s get into the nitty gritty of How to create and recession-proof your business.

Let’s learn how to create a recession-proof business

Many people will tell you there are a few specific industries that are naturally recession-proof. I would say that is a lie. Every business can be recession-proof with careful planning and preparation.

As mentioned before:

it is extremely important to understand the product you offer and the person who NEEDS it.Kevin Pauls – Founder of Simple SEO

There are some that tend to react late to recessions but ALL businesses are affected. Whether it is financially, emotionally or physically, there are cascading effects throughout the economy.

So how do you pick an industry? You find something that you love. Find something that you are passionate about and not just one tiny part but pick a vertical.

An example would be “Automotive Service and Repair”.

You could fix vehicles, you could sell vehicles, you could teach people to fix or sell vehicles. You could also sell products with your services that meet peoples needs. Sometimes parts become scarce during a recession. You would need to think of something that everyone will keep needing that you can supply in a niche market.

A more defined example would be suspension U-bolts. You need a bending machine, the metal threaded bolts and a way to sell it.

Now you sell auto repair services, and products that support the needs of both the dealerships as well as the every day DIY guy.

You are considering the vertical not just a regular service business.

Find the needs of people and break down everything included within those needs. Can you supply the components that meet the need?

This is called diversifying your business to minimise potential loss from a single customer/service. Which leads us into the next topic.

1. Improve your business before and during the downturn

Now that you understand that recessions are a normal cycle, you can prepare your busniess before one hits. Careful preparation and forecasting will help you succeed. Optimizing your business before a recession will give you a competitive edge DURING the economic downturn.

Its important to know your numbers. Simplify your business analytics to a single variable. Figure out what that ONE thing is that guides you and tells you if you are on track and going in the right direction. It is important that you have multiple KPI’s that help you make decisions. But, focusing on one “most important number” keeps you on the right track.

A single number helps you and your team stay more aligned and focused allowing you get more done in less time. You are less wasteful in your business.

Some practical solutions to improving your business include:

1. Create a customer loyalty program

2. Adapt products to more accurately address the customer’s needs

3. Reach out to your existing customer base and have promotions running for them so they know you care and love them.

4. Keep your pricing responsible. This sometimes means raising your prices along with inflation so you can better serve your customers and provide more value per interaction.

5. Re-invest in your marketing strategies. Sometimes we need to trim the fat with marketing and really understand what is working and what is not.

2. Marketing during a recession

Adjusting your marketing dollars is the fastest way to make a change when preparing for a recession so you have a bit more cashflow. BUT before you go signing up for or cancelling services, it is important to understand your ROI from each marketing channel.

You should consistently review your offers. Get rid of the ones that provide little to no ROI, and boost the ones that are more direct. You really need to trim the fat here. Be sure to focus on the potential clients that are ACTUALLY in the market for your products or services.

A great way to expand your marketing is to run promotions for the community and get more involved. When people can build a personal relationship with you they are much more likely to buy.

SEO is a great way to get more exposure online. Finding a good SEO company to work with is vital. Proper SEO takes some time to start seeing the ROI. It is best to start doing SEO as soon as possible. This will help you be more prepared to turn up the juice as a recession hits.

One thing to consider is if you have a great SEO company working for you, your phone will start ringing more. You will need to understand your capacity limits so you can take care of your customers properly.

3. Improve your clients and the experience they have with your business

Most people start a business because they have a heart to serve and provide for people. But, the reality is you can’t serve or provide for everybody, especially in a recession. Many people find this very challenging.

Remove the bottom 20% of your clients from your client list. This is the easiest and fastest way for you to better serve the clients that are invested in you and your business.

Removing the bottom 20% of your customer base means you have more time to properly serve your existing clients and handle the new clients that will come.Kevin Pauls – Founder of Simple SEO

Along with removing the bottom 20% of your client load, you also want to increase the Average Lifetime Value(ALV) of your customers. This is most often done by increasing pricing.

Communicating the increase in pricing is really important. You should learn what your customers need and offer more help and more value.

With less clients, you have more time. You can use this time to love and serve the leftover 80% of your clients. You want them to become advocates for your brand and services. Improve their experience with your business and they will tell their friends.

Your decrease in clients and a price increase means you will have more cashflow and more time. Now you can either reinvest it into your business, save it, or invest in your team if you have one.

4. Bring your staff along for the journey

When you approaching difficult times economically your staff will no doubt be thinking of job security and what the future holds.

Now is a great time to involve them in decision making. Have them start brainstorming ways that the company can diversify and meet the needs of the customers.

It is also a great time to invest in training options. Setting up learning days so your team can continue improving themselves personally and professionally is a great start.

Unfortunately, this is also a time where you will want to evaluate your team and trim the excess that is unnecessary. Letting go of the lowest performers may be an option to streamline your team and the company vision. It is important for everyone to have the same vision with the same goals. Staff that aren’t top performers will be costly during a recession or an economic downturn.

5. Network like your business depends on it

Networking is so important for businesses to grow and thrive even during great economic times. That makes it so much more valuable during hard times.

Be sure to always be connecting with other businesses to support each other. Make sure you have a network of support not just in your own industry but also in industries that could support yours.

Strategic networking is a valuable practice that you should start from the very beginning.

6. Be Innovative with your products and services

When you keep working with just one or a couple products and services you are already behind. It is important to always be innovating. You want to create new products and new opportunities that are relevant to the market you are in and the clients you serve.

These days, digital solutions that are convenient and improve customer experience can make all the difference in the world. Always be researching what your clients need. Also learn about related things they are interested in. This will let you either branch out or provide engaging marketing opportunities for your business that directly speak to them.

Speed wins over cost when it’s something people need.Alex Hermozi – Founder of

Don’t underestimate the power of meeting peoples needs quickly and conveniently.

7. Leverage someone else’s money and re-assign the risk

It is important as a business to keep as much revenue available as you can especially during economic hardship. Liquidity is power.

You should be planning and preparing for hard times from the beginning. But, when government starts handing out grants and financial support, it might be worth taking even if you have the cash saved.

Use someone else’s money and keep your cash available for whatever you need. You might need to pivot at some point and having available funds that you don’t need approved by government regulators is VERY handy.


While there aren’t exact business models listed above, with the information provided, you can easily understand how to create a recession-proof business.

Do a bit of research on your clients and the history of the industry so that you can forecast better. Don’t spend everything you earn and make sure your employees are taken care of. Here are the summarized take-aways from the above points in case you are a bit foggy on what they are.

1. Improve your business before and during the downturn

2. Refine marketing during a recession

3. Improve your clients and the experience they have with your business

4. Bring your staff along for the journey

5. Network like your business depends on it

6. Be Innovative with your products and services

7. Leverage someone else’s money and re-assign the risk

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