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RECESSION-PROOF Business Models?

CaptainAmerica

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Ing

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Business with governments demand are proof.
I workin such a business andI didn’t perceive any crisis of the last 30 years in terms of my monetary situation.
The only issue is, thatI can help out my friends without fearing my bankruptcy. And thats no issue for me.
 

Lion Identity

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There's a recession looming...

1) What business models do you think are recession-proof?

2) How would you suggest to adapt your business to thrive (not survive) in the coming recession?

3) What are your thoughts on starting an outsourcing company such as a call centre during a recession?

Subscription models of all types where a customer pays monthly is the most recession proof. Our man MJ talks a lot about those.

You will need ample capital to survive as a business owner. We provide custom funding plans including lines of credit which are the best tool for owners to cover any expenses due to revenue shortfalls.

Outsourcing a call centre can be good if they are good, but for me no one has been better than having my own trained guys/gals in my office vs 3rd party.
 

Dianne Cohen

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Refinancing may not all be because of need, but quite a bit for opportunity. I started looking at refi rates because the fed was lowering the funds rate. Ironically refi rates have gone up as the fed has reduced rates, I’m not in lending so this is pure speculation, but I’m wondering if it’s because of increased perceived risk of default.

The increase in refis are temporary. They were getting too many and could not fill the orders, so raised rates to slow it down. I was told that the rates are or are going to be back down again.
 
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GIlman

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One of my companies is doing Coronavirus cleanup and decontamination. That's a pretty good business right now... :)

Cleanup, sanitation, and security businesses seem to be booming on the short term. If anyone wants to start a business go to bars and offer live in security. I know several bar owners that are worried and looking to protect their business.
 

Entre Eyes

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Traveling to Higher Conciousness
Your Own Database of Subscribers that trust your recommendations.
 
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Walter Hay

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Franchising or licensing is a business that is safe(er) in a recession. I own a nation wide wedding company, but we chose to license out our systems instead of franchising (still a very similar concept). We get a 7% royalty on every dollar every area in the nation makes, forever.
If you are licensing you need to be absolutely certain that your business structure could not be seen by the FTC as a franchise. If so you could find yourself in very deep water. See my comments on this subject here:
Rapid Scaling a business by franchising

I tested that link and it didn't appear to work, so see post #4 in my thread:
Rapid Scaling a business by franchising This link to the original post appears to work.

Walter
 

tolmanmedia

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Agreed, its important you triple check all paperwork and policies with a good franchising/licensing lawyer so you're in the clear.

One of the biggest differences between franchising and licensing is that in licensing you are giving them something you built, then letting them run with it and you lose total control over what they choose to do with it.

In franchising, you keep that control but it's a lot more work to keep everyone compliant.
 

Walter Hay

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Agreed, its important you triple check all paperwork and policies with a good franchising/licensing lawyer so you're in the clear.

One of the biggest differences between franchising and licensing is that in licensing you are giving them something you built, then letting them run with it and you lose total control over what they choose to do with it.

In franchising, you keep that control but it's a lot more work to keep everyone compliant.
Yes, a big part of the difference is control. For example in Licensing you can't insist on the Licensee following procedures, and you can't insist on him/her using the business or brand name.

Walter
 
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LuckyPup

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There's a recession looming...

1) What business models do you think are recession-proof?

2) How would you suggest to adapt your business to thrive (not survive) in the coming recession?

3) What are your thoughts on starting an outsourcing company such as a call centre during a recession?
Appliance repair. Our fridge crapped out yesterday, and they were more than happy to pay a visit, germs be damned.
 

LuckyPup

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There's a recession looming...

1) What business models do you think are recession-proof?

2) How would you suggest to adapt your business to thrive (not survive) in the coming recession?

3) What are your thoughts on starting an outsourcing company such as a call centre during a recession?
"Vice" businesses are always strong in a recession/depression. Alcohol, cigarettes, etc.
 

LuckyPup

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Franchising or licensing is a business that is safe(er) in a recession. I own a nation wide wedding company, but we chose to license out our systems instead of franchising (still a very similar concept). We get a 7% royalty on every dollar every area in the nation makes, forever.

I personally own 5 of the 62 "franchise" areas available in the US. My areas are all in the West Coast, which is being destroyed by panic/mass hysteria right now. Everyone is hiding their money under their pillows instead of spending it.

In my 5 areas, I've had more already booked brides begging for their non-refundable deposits (usually $700-1200) back than I've had leads this week. It's crazy. My areas are suffering greatly these last few weeks. We've dropped 90% in sales, which obviously sucks for me financially.

HOWEVER. There are a few areas in the nation that are CRUSHING it right now, and that's making me bank. The areas doing well are mostly in the midwest, where the hysteria isn't nearly as great as the West Coast. I imagine that as the virus spreads, different areas will perform better than others.

But I don't care! Because at the end of the day, these area owners (fellow entrepreneurs) will go work their asses off to make sales, and I'll cash in 7% of everything they do forever. So even if my 5 areas suck during a recession, I'll have the security of knowing that I've got multiple income streams.

Also, people will ALWAYS get married regardless of the economy. We offer a value wedding package that is usually 60% lower than most photographers charge, and we have a better portfolio.

Looking back at the data from the 2008 recession, the same amount of people got married as in all previous years. People don't time their weddings with the economy. When the economy is down, they will NEED to find our company, as we are one of the only companies that offer such high value at such a low price.
It's always better to be a franchisor than a franchisee. I know a guy who owns 30+ haircut franchises. While he's built a good nest egg and will weather this okay, his business is hurting big time.
 
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Walter Hay

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It's always better to be a franchisor than a franchisee. I know a guy who owns 30+ haircut franchises. While he's built a good nest egg and will weather this okay, his business is hurting big time.
I agree completely. In my original post in my franchising thread I wrote: "I would like to make it clear at the start that having been a franchisor for over 20 years I would never buy a franchise. The industry is riddled with cheap and nasty “buy a job” systems that could only appeal to people lacking any entrepreneurial ability. It also has a good share of businesses in which failures are likely, sometimes because they are deliberately structured to cause that."

For more on the subject see: Rapid Scaling a business by franchising

Walter
 

LuckyPup

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I agree completely. In my original post in my franchising thread I wrote: "I would like to make it clear at the start that having been a franchisor for over 20 years I would never buy a franchise. The industry is riddled with cheap and nasty “buy a job” systems that could only appeal to people lacking any entrepreneurial ability. It also has a good share of businesses in which failures are likely, sometimes because they are deliberately structured to cause that."

For more on the subject see: Rapid Scaling a business by franchising

Walter
Thanks for the subject tip, I'll check it out. Yes, I saw your original quote and I agree most franchises are buy-a-job nightmares. The franchisee I mentioned owns good franchises, as franchises go (manager in place, etc.). His problem is one we're all facing right now - no demand.
 

valuecreator

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My Granpa, who grew up during the 1st Depression and got marked by it, always used to tell me when I was a teenager that I should go "in the business of money".

According to him, it was perfect because you could liquidate any inventory overnight and you didn't get your hands dirty. The kind of business he's talking about would be a brokerage, wealth advisory, newsletter, trading, publishing info and tips, any financial service.

I mentioned the great Depression because IMO what is in front of us is another one.

lots of opportunities!
 
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LuckyPup

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In the current environment with many students resorting to virtual classrooms - and traditional colleges and high schools not being very adept at virtual learning - I think tutoring services might grow in demand.
 

PizzaOnTheRoof

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jakewlittle

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Franchising or licensing is a business that is safe(er) in a recession. I own a nation wide wedding company, but we chose to license out our systems instead of franchising (still a very similar concept). We get a 7% royalty on every dollar every area in the nation makes, forever.

I personally own 5 of the 62 "franchise" areas available in the US. My areas are all in the West Coast, which is being destroyed by panic/mass hysteria right now. Everyone is hiding their money under their pillows instead of spending it.

In my 5 areas, I've had more already booked brides begging for their non-refundable deposits (usually $700-1200) back than I've had leads this week. It's crazy. My areas are suffering greatly these last few weeks. We've dropped 90% in sales, which obviously sucks for me financially.

HOWEVER. There are a few areas in the nation that are CRUSHING it right now, and that's making me bank. The areas doing well are mostly in the midwest, where the hysteria isn't nearly as great as the West Coast. I imagine that as the virus spreads, different areas will perform better than others.

But I don't care! Because at the end of the day, these area owners (fellow entrepreneurs) will go work their asses off to make sales, and I'll cash in 7% of everything they do forever. So even if my 5 areas suck during a recession, I'll have the security of knowing that I've got multiple income streams.

Also, people will ALWAYS get married regardless of the economy. We offer a value wedding package that is usually 60% lower than most photographers charge, and we have a better portfolio.

Looking back at the data from the 2008 recession, the same amount of people got married as in all previous years. People don't time their weddings with the economy. When the economy is down, they will NEED to find our company, as we are one of the only companies that offer such high value at such a low price.
Very nice
 

Andy Black

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