The Top Recession Proof Businesses
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- Опубликовано: 13 дек 2022
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Just like nature, survival means adaptability….
Making and selling insulin is pretty recession-proof.
But it’s not a business we can usually go out and buy.
So, if we’re limited to the world of small businesses, what kinds of things should we look for?
This week, we examine the characteristics of a business that can survive and I explain how I can teach you a way to give yourself an edge in buying during this time.
Watch here now: • The Top Recession Proo...
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David, great video, I started a recession proof business years ago and it has been successful. The secret is to sell the associated specialized services you mentioned, My customers are the Gas, water, sewer, electrical and fibre optic providers, plus municipalities. They all outsource a fair bit of their maintenance and some require very specialized equipment and skills. They are all recession proof and will always require outside contractors. By focusing on specialized skills and equipment reduces the chance for the services to be commoditized by others. Likewise the opportunity for growth in good times is restricted, their maintenance needs rarely change. So recession proof is possible but it comes at the cost of excessive growth (and profit).
Great points. Thanks for sharing this Charles.
Our waste removal business for this mold pretty well. We hired in 2008 housing crash and 2021 Covid era. Certain revenue streams were job specific which slowed a bit but the main/core business which was removing waste from dumpsters and picking up household waste never waivered.
People are always going to have garbage, right?
Thank you for the info!
Any time!
Thanks David. I really like the point about keeping track of sales and inventory information. Great advice for any business anytime because it's easy to have the information and not use it properly.
Absolutely!
Good video. I am currently in several recession-proof businesses. HVAC/Refrigeration, Electrical and Plumbing. No matter what the economy is doing, people need electricity, working plumbing, Heat, AC and refrigerators working. So not only is my business recession-proof, it's largely unregulated with respect to margins. In the future, I'm looking into buying Medical and Professional office buildings. Main tenancy are Doctors and Lawyers...More recession-proof professions that offer super stable tenancy. Thank you for your awesome vids! I love your content and the value of your advice!😀
Be careful. When recessions do hit, new construction will decrease, this will release many tradespeople to go look for other work. In my experience, this can depress margins. If you're over-leveraged, you can still take a hit even if demand is constant.
Healthcare. Transportation.
Healthcare, sure. Transportation? volumes of goods may go down, unemployed people try and enter the market, more competiton depending on what kind of deliveries you're making. Good thoughts.
Hey David I enjoy listening and watching your podcasts. One suggestion is that you should adjust the audio level of your intro. Keep things going.
Do you find it too loud or too soft?
Great informative video. Few things to improve in your video i.e. video and sound quality and background.
RUclips and sponsorship brokerage business as recession proof business. What’s your thoughts?
Nah, they earn based on ad spend. In a recession, ad spend goes down.
Hi David. Great points, but I don't think you answered the question. I think there are "recession-resistant" businesses that provide necessary non luxury services like pool cleaning, lawn care, roofing, HVAC, electrical, etc. And professional services like escrow, commercial cleaning, tax preparation, etc. I think a great video would be to discuss what you think are more specific types of business that may do better in a recession. Thanks!
Good point!
Hi David, I plan to purchase and enroll in BBA and complete the training in 2023, however, in the meantime I have a Great Hotel/RV Park under contract. Do you know how they would value it? I was thinking as a business on a 3-7 times multiplier of Gross Revenue but some lenders are telling me by Cap Rate, what you think?
Businesses that are also inclusive of real estate are valued in both ways but at much higher multipliers that start to give the same sorts of values as cap rates methods. I would never multiply gross revenue. It's always EBITDA with these types of businesses and you need to factor in a CAPEX budget. There is always something to be fixed.
This aligns better with the real estate investing concept of Net Operating Income that appraisers would use with a cap rate (ie with a maintenance and vacancy expense included.)
thank your for tdetailed response David, I am looking forward to the BBA Program
Thanks for the video David, I've been thinking about this question a lot recently because I am in the deal making phase of buying a decent sized vending machine business. Do you feel a vending machine business would do well (or at least not fail) in a recession? Personally, I believe it would still do well because I would be selling inexpensive pop and chips which are things that people still tend to buy in recessions (Coca-Cola stock always does well in recessions for example). Due to the location of the machines, most of my customers would be university students which I believe is a more resilient customer base because they don't have mortgages, kids, etc. and frankly, they tend to spend more frivolously no matter what the economic situation.
My personal experience is that people like to have 'treats.' When times are good, they buy TVs. When times are tough, they buy ice cream or whatever. So, you may be correct. The thing I also like about vending is that you could always change the product mix and introduce lower cost items as an experiment if you did see volumes going down.
@@DavidCBarnett Great points. Thanks for the reply, love the channel!
What about a distribution/wholesaling buisiness, do you think they are more or less recession proof?
Edit: It would be great if you can make a video about this kind of business (Distribution, Wholesaling, or Transportation), how they are valued, managed, tips on them, ...
Great suggestion!
Good tips on recession, what if we have a full blown collapse that takes years to recover from? Horses? Seeds? Stocks? Water filters? Gold? Coffee? Solar? Investments? Real-estate? Rottweilers?
I have ideas, as a prepper, but would love to hear from a business perspective so when things are normal or hopefully much better we will be ready. Nothing that harms anyone or is selfish. Environmental friendly is a must too.
A smoke shop, people will not give up smoking
I thought lots of people were quitting? Maybe they just vape now?
@@DavidCBarnett well even smoke shops have vape equipment!