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The ‘R’ word has been thrown around quite a bit lately. While we might not be in a recession at the moment, we’re definitely close.
Within the last couple months here in Orlando one small design shop closed it’s doors, one large marketing company laid off close to a third of it’s employees and another graphic design and printing company laid off 40 people. I wouldn’t entirely blame the slow economy for this but it is probably partly to blame.
A lesson from history
When the World Trade Centers were blown up in 2001 I was working at a 30-40 person interactive agency in the Midwest. After 9/11 people and business stopped spending money because they were in fear. That’s what recessions do. They cause people to be fearful, which causes them to stop spending. The company I worked for ended up laying off a third of the company because there was very little work.
However, there was one client that continued to spend at the rate they did prior to the recession of 2001. It was a large university in the area. Many educational institutions are unaffected by recessions and for some, times are even better when there is a recessions because it can force people to go back to school to get more education which will hopefully land them a job.
Prepare for a recession
As an internet marketer, affiliate marketer or the owner of an internet business it is a good idea to have a few clients or web sites that are in markets that are recession proof. Focusing a percentage of your sales efforts on recession proof industries could bring a lot of stability to your business.
From the Wikipedia article on recession proof industries:
Some industries are considered by economists as recession-proof industries. Goods and services produced by theses industries have a low income elasticity of demand and thus business involving these goods remains relatively stable despite the fall in discretionary income that occurs during an economic recession. These industries are in contrast to those that produce high priced durable goods and luxury goods such as automobiles and jewelery. Most recession proof industries produce soft goods which are necessities. Corporations historically associated recession-proof industries have included Kraft, Procter & Gamble, and Gillette.
The reason these types of companies are often called recession-proof is because the produce and sell products that consumers use regardless of their economic status or level of income. Men and women need to shave no matter what happens in the economy, families need to wash their clothes and feed their children.
The following is a non-definitive list of recession-proof industries:
- Entertainment
- Necessities: food/grocery stores/chains
- Energy
Electric
Oil
gas
- Medical Services
Health Care
Pharmaceuticals
- Security/Alarm services companies
- Weapons industry
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