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Businesses That Do Well In A Recession

Guest post by: David Anthony Watson

Article Overview: It is not uncommon for certain businesses to do well in a recession due to the product or services that they offer. These businesses are often referred to as ‘recession proof' as they experience growth during slower economic times. It makes logical sense to work within one of the industries that are more likely to ride the current financial storm.

Businesses That Do Well In A Recession

The official definition of a recession is two consecutive quarters of negative Gross Domestic Product growth. It is generally combined with an increase in unemployment, decline in the housing market and a drop in the stock market. Whilst a recession spells doom and gloom for many industries and in recent times the banking sector, there are certain businesses that do well in a recession.

Chocolate: With a recession consumers tend to spend less on going out for meals and expensive clothes, however chocolate and cosmetic sales are rarely impacted. Well what's more comforting that a nice chocolate bar whilst watching TV?

The Chief Executive of Cadburys, Todd Stitzer had this to say about chocolate sales. "Chocolate benefits as people stay at home. Chocolate sales are holding up well as people buy multi-packs, stock up the larder, and stay at home," he said after a 2008 results news conference.

In house entertainment: As people go out less, they are much more likely to stay in and find something more entertaining to do. So they buy home entertainment packages amongst other things. This is why Sky TV share prices are soaring right now.

Telecoms: Everyone still likes to stay in touch with friends and family and mobile phone usage has increased year on year. If the company is selling primarily online even better as overheads are lower and customers receive more competitive deals. Not all telecoms businesses will do well however depending on how quickly they have been able to optimize their business models.

Debt Collection: Unfortunately with a recession comes increased foreclosures and defaulting on unsecured debts. This leaves a booming industry taking advantage of products designed to assist people to stay in control of their finances.

Funeral care: This is an example of a non cyclical business that will always serve a purpose in the community. This is perhaps not the most talked about industry.

Health Care: Whilst this industry will be impacted to a certain degree, there are so many people dependent on prescription medicine that it will still need to be produced and distributed. Also, the changing demographics of the population mean that there are more elderly people as a percentage of the total than ever before. By 2030, there will be about 72.1 million people over 65 in the US alone, more than twice their number in 2000.

Entrepreneurs: Interestingly enough, more than 50% of Fortune 500 Customers were started during a recession. Some examples are General Electric, Burger King and FedEx. Given the outburst of the internet over the past 10 years, many opportunities for entrepreneurs have opened up including affiliate marketing, network marketing and wealth creation communities. Now is a better time than ever to start up on your own and move away from the daily grind.

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Article Tags: businesses that do well in a recession, david anthony watson, recession proof
Referred by: http://jaykubassek.com/



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