What is the Best Small Business during an Economic Downturn?

by Fenella Ting
(Kuala Lumpur, Malaysia)

My friend posted this question "What is the best small business during an economic downturn?" on facebook, he is in USA now. Below is his full question reposted from facebook:-

"Hello fellow Malaysians,

I know most of you are probably affected by the current recession especially the one in the US.

I received a direct blow from it. My business sales has fallen approximately 60% compared to last year's month to month comparison.

I am still surviving, however a few of my retailers have already folded.

My question is this. Any ideas what is the best small business to get into with the current situation? Consumer buying habits are changing drastically because of the downturn.

1) What are they buying?
2) What will make them buy?
3) Is it a sustainable business?

Thanks! "

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Business/Marketing Tip by Willy Lim


Hi Fenella,

There are certain industries that are more resilient to economic downturns than others.


1) Businesses dealing with daily consumables that people have to use everyday

This is the obvious that comes to mind.

People have to continue to eat, drink, shower, brush teeth, shampoo their hair, economic recession or not.

That being said, to simply rush out and start a retail business dealing with daily consumables may not be such a great idea now, especially since investment tend to be on the high side and with the retail industry being highly competitive, all these point to a risky venture in current economic climate.

Daily consumables business is recession proof, but you would really want to structure it such that your investment and overheads well managed.

One option would be to use a direct selling model is to market daily consumables, the investment is low and the overheads are low too. In fact, direct selling industry has historically outperformed other industries during downturn.

See Singapore TODAY newspaper report here:-
Creating wealth amid turbulent times

Side note: While direct selling may be a recession proof industry, it may not be everyone's cup of tea.


2) Training Industry

Another business which is recession proof is the education or training industry. During economic downturns, people look for ways to equip themselves with better, more updated skills.

It can be a small business owner wanting to improve his marketing skills so that he can stay ahead of his competitors or it could be a retrenched employee learning new skills to prepare for employment in a new industry.

Whichever the case, trainings aimed at increasing net profit of small businesses and increasing income of employees are pretty much sought after during economic recession.


There are other good businesses during economic downturns, but the above are the two that comes to my mind.

If anyone has more suggestions, feel free to share it by commenting on this article :)


Delivering Net Profit to Your Business,
Willy Lim