By Susan Ward
Belt tightening is always bad news for small businesses. But small businesses do not suffer equally in tough economic times; while some will be hit severely, other small businesses will only experience a slight dip and still others will actually prosper.
So when you’re looking for small business ideas, whether because you want to invest in one or because you want to start a small business of your own, the state of the economy will play a significant role in your decision. Here are what I think are the best small business ideas for small businesses to start or invest in in tough economic times.
1) Auto repair
People are buying fewer new vehicles, which means that most people are either buying used vehicles or hanging on to their current vehicles. And, as older vehicles have an increased probability of needing maintenance and repairs, the demand for auto repair services is also increasing. You could implement this small business idea by opening a one person repair business if you’re a trained mechanic, hiring staff and opening your own multi-bay garage, or by buying into an auto repair franchise.
2) Shoe repair
This small business idea is also related to the trend of consumers hanging onto things longer rather than just buying new ones when they perceive the economy is headed into recession. In the case of shoes, sales of new shoes will decrease, but on the other end of the spectrum, there will be a new demand for shoe repair services. And if you’re interested in starting a home-based business, this is one small business idea that would work.
3) Collection agency
When money gets tight, increasing numbers of people have trouble paying their bills. Businesses of all sizes will be looking for help to help them get the money they’re owed, which is exactly what collection agencies do. If you don’t have any experience in collection yourself, the best way to use this small business idea is to hire experienced collectors to work in your agency. (Note that in Canada, all collection agencies have to be licensed and bonded according to legislation.)
4) Heating and ventilation services
When people are tightening their belts, they only cinch them so far. While they’ll stop buying some things altogether and cut down on how much of some things they purchase, other things will be classed as necessities and worthy of spending money on. Heat and ventilation fall into that category. Small businesses that install and service furnaces, heaters, gas fireplaces, air conditioners, heat pumps and the like will continue to thrive. The sales success of green heating and ventilation options will depend on consumer perception; those that are viewed as providing savings will do well.
5) Hairdressing services
Generally, hairdressing services are a safe bet in tough economic times. While other personal care services will take a hit because people consider them to be unnecessary extras, people (especially women) will continue to get their hair cut, styled, permed and/or colored no matter what. Twists on this small business idea include providing hairdressing services as a home-based business or as an in-home care business, going to clients’ homes to do their hair.
6) Senior care services
Demographics rule when it comes to small business ideas that have the potential to become successful small businesses, and the demographics say that no matter what the economy is doing, there are going to be increasing numbers of seniors that need care. Business opportunities in senior care range from opening your own senior care home through providing in-home care or home services such as preparing meals, housekeeping or running errands. Senior care franchises are another option for putting this small business idea into action.
7) Used book stores
This small business idea is another permutation of the eschew-new-go-used theme. Just as with videos, cars and shoes, masses of people will be changing their buying habits and looking to buy used books rather than new ones. If you can build an inventory of popular works and keep it turning over regularly, this could be a good small business to be in.
8) Yard services
Rain or shine, good times or bad, there is a certain percentage of the population that will still prefer to pay to have their lawn cut and/or their snow shoveled than do it themselves. So small businesses providing basic yard services will continue to do fine, particularly those located in areas with aging populations.
9) Equipment rental
Equipment rental is an up and coming business idea for two reasons; more people are going to be trying to do things themselves than hire people to do them and more people are going to prefer to rent things than buy them because of perceived savings (which may or may not exist). The larger, pricier and more infrequently the equipment would be used, the higher the likelihood that people will want to rent it. Power washers, lawn rollers, cats, compressors and chainsaws are just a few examples of rentable equipment.
So there are ten small business ideas for small businesses that you can start or invest in tough economic times that will have a better than average chance to prosper or at least stay profitable. The usual rules apply though; it’s the right business in the right place at the right time that makes the money. You always need to do your homework; writing a business plan is a good (and safe) way to find out if your small business idea is worth the investment.