Steve Streit: 5 Recession-Resistant Business Ideas

No matter how good the economy seems, a recession is always somewhere up ahead. It’s an ironclad law of economics, one that businesses large and small simply must acknowledge.

With blue-chip forecasters like Goldman Sachs now putting the odds of a recession in 2025 at 45%, and some going even higher, it’s time for entrepreneurs and investors to think seriously about riding out the tough times that could be right around the corner.

Contrary to what some might tell you, the best way to weather a difficult economy is not to stuff cash in the proverbial mattress. Recessions offer plenty of ways to make (or, at least, not lose) money.

“Level-headed entrepreneurs can do quite well for themselves in economic downturns, creating jobs for others and ultimately sowing the seeds of the recovery,” says serial entrepreneur and investor Steve Streit.

These five business ideas tend to outperform in tough times while remaining lucrative during periods of economic growth as well.

1. On-Demand Delivery Services

Restaurant delivery apps like Grubhub and DoorDash might feel like luxuries. Indeed, they’re associated a bit too closely for comfort with the inflationary excesses of the early 2020s.

But on-demand delivery services, from Amazon down to niche grocery and pet food suppliers, are much more recession-resistant. As consumers trade down from high-end, in-person retail experiences, they rely on affordable and convenient delivery services to get them what they need.

Streit, for example, was an early investor in Shipt, which endured several consumer downturns to become one of the best-known operators in the industry. 

2. Buy Now, Pay Later Apps

Buy now, pay later apps let consumers split larger purchases into multiple monthly payments, often four of equal size. The market is already quite large, approaching $40 billion in 2023, and it’s set to grow to $167 billion by 2032, according to Fortune Business Insights.

According to Streit, an investor in an established player in this space, BNPL’s appeal grows during difficult times, when personal incomes flatten or decline and disposal income shrinks. People still need to buy things, but they might not feel like they can afford to pay all at once. 

3. Temporary Labor and Contracting Services

Demand for contract and “temp” labor tends to grow during economic recessions as employers cut permanent jobs and look to outsource more work. 

While some believe artificial intelligence will eliminate the need for flexible IT and other “back office” workers, most experts believe the next recession will be more like previous downturns in this regard. (Beyond that, all bets are off. More than 40% of employers are considering replacing some human labor with AI in the future, according to CNBC.) 

4. Durable Goods Warranty and Repair Services

In recessions, people tend to make do with the cars, appliances, furniture and even clothing they already have. That’s good news not only for existing repair and refurbishment businesses but for entrepreneurs who can offer innovative warranty and repair solutions — think “repair as a service.” 

5. Ancillary Business Services

When revenue stalls or falls, businesses tend to cut non-core expenditures first. Often, this leads them to automate important but “basic” processes like human resource management and bookkeeping. Cloud-based service providers like Gusto — another early Streit investment — make that much easier (and more profitable). 

Not Everyone Suffers Through Tough Times

“You make most of your money in a bear market,” said famed American businessman Shelby Cullom Davis. “You just don’t realize it at the time.”

Davis was talking about investing in the stock market, but his words apply to private-company founders and investors too. Though painful and uncertain, economic downturns naturally create opportunities for those bold enough to seize them.

It won’t be easy. It won’t happen overnight. But if you have the patience and fortitude to build through the dark times, you could find yourself sitting very pretty indeed when the clouds part.