| Boom time is over and there's a recession on | | | | |
| the horizon. | | | | And yet, somewhat paradoxically, people often |
| | | | increase their spending on non-essentials |
| So is it time for aspiring entrepreneurs to | | | | too, on indulgencies. |
| hunker down and wait for the sun to come back | | | | |
| out before starting a business? | | | | For example, Cadbury's announced a 28% jump |
| | | | in profits in July, and analysts suggest it |
| Not at all. | | | | was, to an extent, because of the recession |
| | | | rather than despite it. In gloomier times |
| Recession does indicate a contracting economy | | | | people often turn to comfort eating and buy |
| but it doesn't mean that businesses across | | | | chocolate, ice cream and other treats to make |
| the board are shrinking and dying. Many | | | | themselves feel better. |
| businesses and industries buck the trend by | | | | |
| growing through the downturn. | | | | People do tend to be more price aware, |
| | | | however, so the emphasis is on affordable |
| You can increase your chances of running one | | | | luxury. So they're more likely to plump for |
| of these businesses by starting a business in | | | | Cadbury's Dairy Milk than Hotel Chocolat |
| an industry that tends to remain resilient, | | | | truffles. |
| or even prospers, in economic downturns. | | | | |
| | | | Start a business selling budget goods |
| So which types of business are good to start | | | | |
| in a recession? | | | | Starting a business selling budget ranges |
| | | | are, unsurprisingly, more prosperous in lean |
| Start a business selling essential goods or | | | | times. |
| services | | | | |
| | | | 'Everything for a pound' shops tend to do |
| Most businesses are discretionary, meaning | | | | well. And with the credit crunch making bank |
| that their products and services are | | | | loans hard to come by, pawn shops and cheque |
| non-essential. | | | | cashing shops are enjoying a spike in custom. |
| | | | |
| Essential items tend to be bought in roughly | | | | In contrast to restaurants, retailers selling |
| the same quantities whatever the economic | | | | budget food ranges are very successful. |
| weather. Businesses dealing in food or | | | | |
| shelter, two of life's most fundamental | | | | Start a business selling goods and services |
| needs, tend to be resilient in an economic | | | | used by the over-50s |
| dowturns. | | | | |
| | | | They've got equity in their property, and |
| There are stark exceptions, however. | | | | they've got savings so their earnings rise |
| | | | with interest rates: over 50s have more to |
| Restaurants are enormously susceptible in a | | | | spend than younger age groups and they're |
| recession as the difference in cost compared | | | | also more resilient in a recession. |
| to eating at home is huge, so meals out are | | | | |
| often the first thing to go when people have | | | | Buy a franchise |
| less money in their pocket. | | | | |
| | | | An established franchise will invariably |
| And the mortgage market can seize up in tough | | | | stand a better chance of thriving than a |
| times, like at present, where there's a | | | | start-up. Many franchise brands have come |
| squeeze on credit. However, people always | | | | through previous recessions unscathed so you |
| need somewhere to live so the lettings | | | | can be confident they'll have the means and |
| market, by contrast tends to remain stable. | | | | savvy to do it again. |
| | | | |
| Other examples of businesses bracketed in the | | | | When the economy contracts some businesses |
| essential category are law firms, funeral | | | | inevitably go under. With their time-honed, |
| parlours, healthcare businesses, law firms, | | | | streamlined processes and systems, franchises |
| schools and home maintenance businesses. | | | | are usually leaner and fitter than their |
| | | | rivals and much less likely to fall by the |
| Start a business selling guilty pleasures | | | | wayside. |