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.
Read about five more small business ideas for businesses to start or invest in tough economic times on the next page...