During the last 25 years, the U.S. and the world experienced two major economic upheavals. First, the Great Recession from 2007 to 2009 took about ten years to recover from completely. Then there was the financial crisis brought about by the COVID-19 pandemic and the subsequent lockdown. As a result, the term “recession-proof” has become quite common — whether among those in business and finance or even among regular people.
According to the Federal Reserve History, the Great Recession began in December 2007 when the economy peaked. The decline in overall economic activity, while modest initially, came to its lowest point in the fall of 2008. In that almost-year span, the U.S. gross domestic product fell by 4.3%, and the unemployment rate more than doubled, from less than 5% to 10%.
During the pandemic, job losses peaked at 13%, but by July 2022, the unemployment rate had returned to 3.5%. Transworld’s Main Street Market highlighted that many people had opted to leave corporate America and pursue their own entrepreneurial dreams due to the Great Recession. Thanks to COVID-19, even more individuals are seeking to own their own businesses and focusing on industries with a greater chance of surviving the next economic downturn. So, what are the top industries for those seeking to buy or start a company?
Top industries by closed transactions
New and existing entrepreneurs want to invest in a company with solid potential now and in the future. While there is no crystal ball that can predict what will happen in tomorrow’s economy, Transworld’s Main Street Market Report offers insight into which business categories have been trending upward in recent months. The top five industries are:
- Restaurants — 34+% increase from 2021 to 2022
- Construction — 38+% increase from 2021 to 2022
- Beauty/Personal — 46+% increase from 2021 to 2022
- Automotive— 38+% increase from 2021 to 2022
- Medical-related — 18+% increase from 2021 to 2022
So why should someone consider selling a business now? More people are looking to start their own businesses, making now a great time to sell. The five industries listed above have proven to be more recession-proof than others, making them more appealing to potential buyers.
Industries on the move
Looking ahead, which industries offer continued growth? By deal volume, the best-performing industries were:
§ Restaurants
§ Construction
§ Beauty/Personal Care
§ Automotive
§ Medical-related
Meanwhile, industries that appear to be declining include liquor-related businesses, those connected to real estate, business services and ice cream/yogurt shops. For liquor-related businesses and ice cream/yogurt shops, people have simply reduced their consumption of these items. Meanwhile, the decline for the other industries may have thrived during the pandemic, but as life has returned to normal, the demand for them has diminished. Additionally, some industries trending down may be related to increased mortgage rates.
More people than ever appear to be interested in owning a business and being their own boss. When they select a business from an industry that has proven itself able to weather economic ups and downs, it helps to mitigate some of the risks that come with entrepreneurship.
If you think now might be the right time to buy or sell a business, Transworld Boston can help. Reach out to learn more from our qualified business advisors to make the next step in your future.
