It’s always been a puzzle to some economists why the overall market has gone boom and bust in a cyclical fashion since the beginning of modern capitalism. Thriving boom cycles last a few years but are followed by deep recessions. Then comes an inevitable rally, recovery, and subsequent boom that begins the cycle anew.
Still, there are certain sectors and kinds of businesses that tend to do well even during a recession. These sometimes even expand while the rest of the economy is contracting and everyone else is scared. We broke down 15 such businesses. Read about them in our list below.
Startups do very well during a recession. Because everyone is cutting costs, prices are lower and startups can take advantage of this situation to get a start with bargain prices on the things they need for their business. It’s the opposite of struggling to raise the money for the sky-high prices that happen during economic booms. Big-budget businesses can afford to pay these. So recessions even out the playing field a little and give the underdog a chance to get in the game.
As big businesses cut spending on the things that startups need to get going, inventories just sit there taking up space and costing money, and companies become desperate to move them. Advertising space, for instance, can also be had at a bargain price for startups during a recession. That initial cost to get to the market can be a big barrier to entry, but for a bargain, it might make sense in the initial cost structure for a new business. They can give themselves a chance to reach the volume necessary to continue even after the recession is over and prices go back up.
Proving that, a fascinating number of major Fortune 500 companies today got their start during a recession. They include 3M, Adobe Systems, Apple, Bath and Body Works, BET, CNN, Chevron, Dave and Buster’s, Disney, Electronic Arts, Exxon Mobil, FedEx, General Electric, Microsoft, Pizza Hut, and Whole Foods.