Editor’s note: This article was first published in July 2010, during the economic crisis in Spain. Its references to the crisis, recent tax rises, driving schools being among the most profitable businesses until about 2005, and the boom in debt collection agencies reflect that period.
Update (May 2012): an updated version of this article is available at Profitable businesses in times of crisis.
We have put together a summary of the businesses that have kept opening new branches during the crisis. If, by the end of this article, you feel these businesses are not for you, take a look at our other articles on business ideas, where I am sure you will find ideas that suit you.
The best businesses have been the ones that meet these requirements:
- Customers are obliged to consume their products or services.
- They cover basic needs.
Funeral homes
Death is one of the most profitable businesses, in times of crisis and in boom times alike. Obviously, until something reaches the market that spares us the unpleasant experience of dying, funeral homes will keep operating in a market full of potential customers and with guaranteed payment, since in most cases they are paid through insurers.
Perhaps the problem this business faces now is competition: as with any business that works, the market quickly tends to become saturated, as others are drawn in by the profits.
Driving schools
The basic requirement for driving a vehicle is, of course, a driving licence, which to this day you can only obtain through a driving school. Until five years ago it was one of the most profitable businesses anyone could open.
Because it was so highly profitable, large companies have entered the market trying to monopolize it, forcing small driving schools into the difficult task of cutting prices. In some countries there are rumours that governments will soon take charge of driving licences. In the meantime, this business remains among the top five businesses with guaranteed profitability.
Insurance companies
To drive a vehicle you need not only a licence but also compulsory insurance. Businesses need insurance, and so do private homes. During the crisis, the small business of working as an affiliated agent for an insurance agency has grown by around 10%.
During this time, insurers have had a good idea for an insurance product the market needed: rent insurance, which covers tenants who do not pay. Setting up an insurance business does not take much money, and in most cases not even an office. All it takes is patience and persistence, since nine out of ten people pay for some kind of insurance.
Debt collection companies
Late payment has been a much-used phrase in recent years. Desperation is what has driven many business owners to turn to this kind of service. It is a business that has sprung up at a crazy pace, although it is also not very profitable, since they very rarely end up collecting from a debtor.
It is a business that walks the fine line between what is legal and what is not.
Bars
One of the most all-consuming businesses there is, but a lifeline for people who lost their jobs. A bar has a high profit margin, although rising taxes, electricity, occupational health and safety costs, permits and so on mean that a large percentage of bars already owe money to their suppliers within less than six months.
Even so, it is still one of the go-to businesses in times of crisis.
These are the businesses that have kept working through times of economic slowdown. If you want to know where the market is heading in the future, be sure to read the following articles. You may find your best business idea in them.
- The 10 most in-demand jobs of the future
- The businesses of the future
- How to start a business with no money
- Business ideas related to solar energy
- Business ideas related to leisure and tourism
Featured image: TeaMeister, CC BY 2.0, via Flickr.
