If you are considering business ownership, the state of the economy is something you are probably keeping a close eye on. You worry about how an economic downturn could affect your business and livelihood.
In general, franchises tend to fair relatively well during recessions compared to non-franchised businesses, due to their proven business models and network of support and resources.
I’ve been a part of the franchise industry since 2001. I was around for the economic downturn after 9/11, the Great Recession of 2008, and the COVID-19 pandemic. I’ve seen the ups, downs and some businesses struggle while others succeed.
Through all these changes there are five “steady eddie” franchise industries for reliability in any economy.
HOME SERVICES
The home service industry is huge. It is a $457 billion market and continually growing.
During recessions, people tend to travel less and spend more time at home. They tackle home improvement projects they’ve been putting off and make their home more comfortable since they are spending more time there.
Bear in mind, people aren’t likely to do big 20k-dollar kitchen remodels, but smaller home improvement businesses include:
- Painting
- Carpet and flooring
- Windows and blinds
There are some home services and repairs that people will always need, no matter what the state of the economy. If a pipe breaks in your home, you repair the damage. There isn’t another option. Some businesses that are always in demand are:
- Restoration services (fire, water, smoke, etc.)
- Plumbing
- HVAC
- Roofing
In franchising, we call these types of businesses “dull normal.” They aren’t sexy, but they are services people will always need, making them steady and solid.
BUSINESS SERVICES
Business services describe work that supports a business. These services increase productivity, profitability, and efficiency for businesses. And that is always in demand, especially during difficult economic times.
There are a wide variety of businesses in this industry:
- Expense reduction
- Staffing
- IT Consulting
- Print fulfillment
- Shipping and delivery
- Marketing and advertising
Cleaning and repairs franchises also fall under business services. Retail stores will always need windows cleaned, buildings and sidewalks power washed, utility services, parking lots paved and re-painted, etc.
HOME HEALTH CARE
One thing you can count on: people are always getting older. Senior care – and more specifically, in-home health care for seniors – is in high demand.
77 percent of adults 50 and older want to “age in place” and remain in their homes as long as possible. By 2030, all of the nearly 70 million Baby Boomers will be between the ages of 65 and 85. That’s a huge consumer base for in-home healthcare services.
The in-home care franchise industry is growing at a rate of 10% annually. Seniors don’t only need medical care; in-home care can also include services such as:
- Health care
- Personal care
- Household chores
- Money management
- Meal services
- Home modifications
Health and senior care businesses are one of the top six recession-resistant franchises. Even during the Great Recession in 2008, healthcare industry employment grew by 6.6%.
This is a needed industry that does not require medical experience to start a senior care franchise.
MOVING AND CLEANING SERVICES
The average American moves 12 times during their lifetime. Whether they are down-sizing, up-sizing, moving across town, or across the country, people are always moving. They need help cleaning out their homes and moving their belongings many times throughout the stages of their lives.
The moving industry makes $86 billion in annual revenue.
During recessions, people tend to downsize their homes or move to more affordable neighborhoods. And during the pandemic, we saw huge migrations of people moving out of cities and/or upgrading to bigger homes as they transitioned to working from home.
Junk removal services often go hand-in-hand with moving, but many people need them in other instances, too:
- Estate cleanouts
- Office/business cleanouts
- Home renovations
- Home decluttering
- Hoarder cleanouts
The same is true of cleaning services. People will often hire cleaners when they move out of an old home or into a new one. Cleaning services are also used after the junk has been removed from an estate or hoarder cleanout. There are other types of cleaning services, such as medical cleaning, carpet cleaning, even crime scene clean up.
FITNESS AND BEAUTY
Fitness and well-being will always be important, no matter what state the economy is in. 62% of Americans say that health and wellness activities would be the last thing they cut back on during a recession, preferring to cut back on travel and going out instead.
Fitness centers fulfill physical, emotional, and social needs that are priorities for many people. During the 2008 recession, gyms and fitness clubs remained steady and actually saw 2.2% growth.
I found that during the 2008 recession, instead of forgoing gym memberships, people placed more importance on the value of their memberships. Instead of a pilates membership and a yoga membership, they would choose fitness centers that offered a variety of services at an affordable price.
You may think that beauty services are considered frivolous spending during a recession, but you’d be surprised. The “Lipstick Effect” is a term that was coined during the recession of 2000. It refers to the observation that people continue to spend money on small indulgences, like beauty services, during economic downturns. These services make people feel good without putting a significant strain on their finances.
- Hair salons
- Manicures and pedicures
- Facial treatments
- Massages
- Botox
Franchise customers tend to be relatively affluent people with middle to high levels of income. They aren’t hit as hard by economic fluctuations. Their lifestyles don’t change as drastically, and they continue to spend during recessions.
“Steady Eddie” industries typically aren’t “sexy” but they will always be in demand and make for good, reliable business. If you’re interested in business ownership but worry about economic volatility, get in touch and we can discuss the best steady, secure franchising opportunities for you.
