When the economy is doing it tough, job security can quickly turn to insecurity. But just as desperate times call for desperate measures, often in the form of company downsizing and cost-cutting, a recession doesn’t have to signal doom and gloom.
Considering more Americans became millionaires as a result of the Great Depression than any other time in history, it’s evident that money, and lots of it, can indeed be made during a recession.
Kentucky’s favourite ‘Colonel’, Harland Sanders, worked as a farm hand, tire salesman and service station attendant before opening his first ‘restaurant’ at the Kentucky gas station he operated in 1930, in the midst of the Great Depression. Customers thought his chicken was so finger-lickin’ good, by 1937 he had extended the business to include a motel and 142-seat restaurant.
The business survived a fire and rebuild, and by 1952 the Colonel began franchising, travelling from town to town to sell his original recipe chicken to restaurants. In 1957 he started selling his chicken in buckets. By 1979 there were 6,000 KFC restaurants worldwide. Cut to 2011 and the opening of the first “eco-friendly” Kentucky Fried Chicken outlet in Indianapolis.
In similar rags to riches fashion, the founders of US chain Burger King started during a recession in 1954 and survived a second downturn in 1957 by introducing the Whopper to their line of flame grilled beef burgers.
One hundred years after Thomas Edison’s invention of the light bulb changed the world during the recession of 1873, Microsoft founder Bill Gates developed the MS-DOS programming system, which was sold to IBM during the 1981 recession.
Whether revolutionising technology, or simply tapping into people’s desire for simple, affordable pleasures like tasty chicken pieces, there are certain market demands that stop for nothing, not even a recession.
Industries that thrive during recession
No matter how bad the economy is looking, some industries will always survive, if not thrive; so if you’re worried about job security, consider branching out into one of these areas.
Death and taxes An economic downturn may be the only time you’re thankful for life’s two morbid certainties: death and taxes. Services associated with life’s inevitabilities will, if not prosper, at least survive hard times. If you can’t bear the thought of working as a gravedigger or an accountant, it may be worth considering opportunities in healthcare services associated with areas such as nursing, aged care and pharmaceuticals.
Child care workers are in demand The Federal Government has recently increased the staff-to-child ratios in child care centres, as well as declaring that child care workers will soon be required to hold a Certificate III qualification. These changes, combined with the double income family becoming the norm, are increasing demand for child care workers as more women go back to work, sooner, after having a baby.
Where there's muck there's brass Before you turn your nose up at waste disposal, bear in mind that the average salary for someone in waste collection and disposal services is upwards of $90,000 for an operations manager and $75,000 for a general sales manager, and you don’t even have to get your hands dirty.
Discount retailers and grocery When people are forced to be more conservative with their spending, all of a sudden finding the storage space for 50 rolls of toilet paper doesn’t seem to worry them like it did before. Buying in bulk, switching to generic brands, dining out less and swooping on the ‘reduced’ items in the grocery store are all ways to save a dime. Accordingly stores like Aldi, Costco, Bunnings, Woolworths, Ikea and Coles are all hiring. And the roles available seem quite usefully varied, with positions for those just starting out as well as those with a bit more maturity under the belt.
‘Sindustries’ History shows that small pleasures get people through tough times. From alcohol to cigarettes, junk food to the sex industry, splurging on a bottle of wine and some takeaway is an affordable alternative to purchasing a brand new stereo or new car.
More: The economics of the adult industry
Equipment repair and hire People are more inclined to fix something that’s broken rather than buy a new one. Washing machines, dishwashers, hot water systems and cars will always need fixing. Some handymen make good money from doing odd jobs for homeowners in their neighbourhoods and helping people with their DIY renovations and repairs.
More: Investing, your hobby just made you money
Second hand/recycling From furniture and electrical to brand name clothing and collectors’ items, vintage is not only trendy, it can be a thrifty way to decorate. Picking up a great deal on eBay or Gumtree, or at your local Vinnies or second hand furniture store, then restoring it to its former glory, also has environmental cred.
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Property management Entering the property market may take a back seat for many, but that means the rental market booms as people seek places to live.
More: Taking the property plunge
And of course, there’s always writing a self-help book about how to emerge victorious from recession. Just make sure it’s a bestseller…
How to succeed in business without really trying
Of course, not everyone works in an industry that thrives during a recession, or has the aptitude or skills to adapt. With companies downsizing and cost-cutting, how do you ensure you survive the chopping block?
Essentially, it comes down to being useful to the boss without getting your colleagues offside…
- Cut costs and add value to become an indispensable part of the business. Work on ways to save the company money, adding value to your own job, and potentially saving yourself in the process.
- Boost your visibility. Go beyond your basic job responsibilities. Volunteer to take on additional roles and responsibilities that pop up, and make sure the boss knows you’re putting in the hours. Just be careful how you’re perceived by colleagues, what starts as an honest coffee run could easily turn into batches of homemade muffins that have you labelled as the ‘office pet’. If you are going to bake, do enough to feed the whole crew.
- Work hard. Take initiative, speak honestly, be a problem-solver… and don’t be the last to rock up to the office and the first to leave. Unless it’s because you’re baking muffins.
- Don’t whinge. Sounds simple, and yet so many find it so difficult. No-one likes a complainer, and it’ll up your chances of being the first to go if jobs get cut.
- Which brings us to… Be friendly to your workmates. Ultimately, successful businesses hire people who get along with the other staff, even if that person is not the most ‘qualified’ for the position. So don’t be a stick in the mud. Make an effort to attend social ‘dos and after-work drinks. Be someone people want to keep around.
Investing in hard times
For business owners, investing in your brand and people around you becomes more crucial than ever before. Staying in contact with others in your industry could make or break your business, now is not the time to batten down the hatches and become less visible.
Making an effort to stay in touch can help you attract new clients, increase productivity, and ensure you are still getting your name out there. It also creates the perception you are doing well. And, as they say, perception is everything.
Savvy investors can make the most of hard times too, when companies downsize to regain strength and steel themselves for difficult road ahead, often, they emerge stronger. Asset protection becomes more important as risk increases, so it’s wise to review portfolios more frequently and look at diversifying to spread the risk.
More: Starting a portfolio, the first five stocks
Consider picking up shares of companies that go against the normal business cycle. These so called defensive stocks, such as utilities or pharmaceauticals may be well worth investigating. However this is not for the faint of heart and will need some serious homework.