Identifying Recession-Resistant Business Opportunities In Today’s Economy
Tips for New Entrepreneurs Seeking Business Opportunities Amid a Pandemic
The worldwide economy is scrambling to recover following an unprecedented economic shutdown. As a result of the pandemic, the National Bureau of Economic Research officially declared our economy entered a recession in February and the U.S. Bureau of Labor Statistics has reported the unemployment rate has risen to 13.3 percent beginning in late May. With such an unstable economy, how is it that, according to the Census Bureau, more than 500,000 applications for an employer identification number have been filed since mid-March?
Individuals ousted from their careers with enough working capital often seek entrepreneurial business opportunities to control their own destinies. That is why, in 2008 - during the Great Recession - the Kauffman Foundation saw an uptick in new businesses formed versus in 2007, averaging 320 Americans out of 100,000 forming a business each month. Eager entrepreneurs will now seek a similar opportunity following the pandemic.
I founded my business, Conserva Irrigation, back in 2010 following the Great Recession. I saw consumer demand in a niche market and was ready to chase my passion for water conservation and business development despite the struggling economy. In this piece, I’ll share some insights from my journey on how to identify the right business opportunities that are primed for sustained success in a recession.
Focus on Low-Cost-To-Entry
First and foremost, it is essential for any entrepreneur to identify opportunities that are low-risk and high-reward with a low-cost-to-entry point and mitigated overhead. Particularly in a recession, business owners know they’re taking a risk investing in their business and want to ensure that every penny is utilized efficiently. Under a franchise system, a franchisee becomes a part of the well-oiled machine following a proven blueprint that forecasts investment costs alongside predicted annual revenue and performance. When an individual franchisee is making a jump in their career path and starting their first venture, these low-cost-to-entry investment opportunities provide the perfect starting point to business ownership with existing brand recognition. Additionally, it is beneficial to identify franchisors who may provide financial assistance, financial advising, and/or franchisee incentives, such as veteran discounts.
Seek Out Proven Industries
Next, it is important for that business owner to pick the right industry for themselves. Not only is it crucial to see consumer demand but, it is just as important to have a passion and vision for that subject area. Likewise, in franchising, it is important for the franchisor to identify candidates that have the business mindset and passion to succeed. This shared passion for the industry creates a trusting bond, in which both franchisor and franchisee can learn from each other as they partner in their venture together.
Additionally, history tells us which concepts will show continued growth despite an economic downfall. For example, there is constant demand in the home service industry since specialized manual labor is the backbone of our country and consumers often cannot complete these projects on their own.
In fact, Taboola, an ad-tech company, reported in May that there was a 140 percent increase in consumer interest for home improvement, with gardening and plumbing showing a 245 percent search term bump. This trend has impacted our industry first hand, as Conserva Irrigation anticipates a 30 percent increase in YOY sales through Q2. Continuing to service clients in a socially distant world while adapting business to fit the new norm utilizing careful cleaning procedures has allowed us to maintain business success. It will be imperative that entrepreneurs seek out these businesses as they look for the ideal opportunity in the coming months and even years.
Consider Easily Accessible Brands
While it is beneficial to look at history for guidance, business owners need to stay on their toes and keep their finger on the pulse of current trends. As we recover from the COVID-19 outbreak, we’ll see an increased demand for businesses that travel to their customers and can maintain proper social distance. Fortunately, Conserva Irrigation’s business model does just that along with nine other businesses that were ranked in Entrepreneur’s ‘Low-Cost Franchises You Can Start From a Vehicle Right Now’. A mobile low-cost-to-entry opportunity is attractive to young entrepreneurs in particular, seeing as Salesforce determined that the newest generation of entrepreneurs are 188 percent more likely to create an opportunity for additional revenue and start a business from their home. Quick start opportunities, such as franchises, are ideal for this type of business owner seeking additional income in an unstable market and for young entrepreneurs just starting to dip their toes in the world of business start-ups.
Russ Jundt is the Founder, Vice President, and Brand Leader of Conserva Irrigation, the only irrigation company founded on the principles of water conservation. As brand leader, Russ drives the overall priorities and focus of the company including the service offerings, sales processes, strategic partnerships, and more.