What Is the Best Pandemic-Proof Business to Own Today?
If there is something we can say about 2020 and our economic course through COVID, it’s that we found out a lot about businesses that are pandemic-proof.
Of course, 2020 was off the scale in terms of being so unexpected, rare, and bizarre. But looking back at the experience can give us many pandemic-proof business ideas – and we now know that a pandemic-proof business is one that delivers stability in just about every economic situation. And isn’t that important to think about if you’re considering opening a business or investing your money into a franchise?
Pandemic-proof industries thrive when the going gets tough
There’s no doubt that, although the dark days of lockdowns and restrictions were tough on all of us, some businesses didn’t only survive through the pandemic, they thrived. So, it’s worth thinking back to what was happening and which industries did well. Those that spring to mind immediately are:
This isn’t so surprising.
People don’t stop spending money on their pets, and dog walking businesses, doggy daycare services, and pet franchises have all fared well.
Personal care and well-being are crucial to living a happy and healthy life, so we spend money with businesses that help us to eat healthily, and companies that help us to maintain our fitness, as well as on products that help us to look our best (there are some incredible opportunities in franchise beauty businesses).
Parents will spend money on their children, with the hope of helping them to carve out a better future than their parents are living. Education franchises and home-schooling businesses (in-person and online) are growing sectors within education.
Our population is aging, and spending on the elderly is growing. In-home healthcare is following this trend, and home healthcare franchises are booming.
Drill down from the industry to uncover the business
When you’re looking at the type of business to start or own for stability through all economic situations, it’s not only important to consider the industry, but also to consider the business itself.
When people got locked in their homes and were unable to go to work during the COVID pandemic, many chose to remodel their homes. And they went the whole nine yards, remodeling bathrooms, kitchens, living rooms, flooring, and so on. So, although the industry did well and businesses within it did well through the pandemic, is this a progression that would be followed during a ‘normal’ recession? Would you want to own a home-remodeling business when the next downturn hits? Probably not.
So, you need to look at the industry and the business opportunity. Industry first. Business second.
Let’s take the personal healthcare business as an example.
There’s a reason that Sports Clips and Supercuts are so successful. They have that demographic where the person themselves might change, right? They may lose their job, and not be able to afford the $50 or $60 cut they used to get. But they still need their hair cut, right? So they drop down – and Sports Clips and Supercuts benefit. They always have a market, but during tough times their market grows (because people’s hair doesn’t stop growing, even though their bank balance might be shrinking).
If you’re rehabbing and working on one- or two-million-dollar projects, you’ll struggle when the economy tanks. If you’re doing mid-value rehabs, you’ll always have a target market.
Yet some businesses failed during the pandemic – why?
It’s too easy to say that businesses failed during the pandemic because businesses dried up. For many industries, the business didn’t dry up altogether, yet some companies went under while others survived and emerged stronger. Why is this?
From speaking to so many business owners, there appear to be two main reasons.
The first is that the owner was tired. They may have owned their business for 10 or 20 years or longer, and they just weren’t interested in grinding it out during COVID. When I spoke to owners like this, who closed their doors, they told me they’d been in their businesses for so long, that they just weren’t in a place where they wanted to battle against all the uncertainty.
The second reason was that some business owners weren’t financially prepared for such a tough time. They were, I guess, kind of running their bank accounts like just-in-time production. So, they didn’t have the capital to absorb the shock. The economy had been so strong for so long, that they felt it wouldn’t stop. Consequently, they didn’t have emergency funds, or they used them up just ahead of the pandemic, and their accounts didn’t refill.
So, that’s two big takeaways, I guess:
Have that grit, that determination to pull through.
Maintain enough capital to cover operating expenses for six or nine months to weather any storm.
How the franchise model has changed post-COVID
In the realm of the franchise model, it’s been widely acknowledged that franchisees have always been expected to follow the systems and directions laid out by the franchisor.
However, the COVID-19 pandemic brought about a time of change and adaptation for individual franchises. Some had to crisis pivot, and are now back to normal. Others experienced growth and discovered long-term expansion opportunities, and made permanent changes.
The specific outcomes of these adaptations depend on the business model that each franchise has created. Most, if not all, franchises have gained valuable insights into their systems and business models and have emerged stronger because of the challenges they faced during the pandemic.
What franchise businesses are popular today?
It’s hard to say exactly what businesses people are starting or buying franchises in right now because there is such a wide range. Especially with franchise opportunities available in almost every industry.
Of course, a franchise is really just a successful business that has built systems and processes over a course of many years and through many different economic climates and challenges.
Franchises are usually found within established industries, too. Another reason most are very stable businesses. Or they enter into enormous markets. For instance, in the early 2000s, the massage industry was transformed when national brands like Massage Envy and Elements entered the market.
In light of the COVID-19 pandemic, there is a growing interest in service-related businesses as people consider their resilience in the face of future crises – entrepreneurs are thinking about what businesses would keep going if another COVID happened. Real estate and light rehab businesses are also popular right now.
Meanwhile, boutique fitness remains an attractive area, despite the challenges it faced during the pandemic. The exercise and fitness world has evolved since the 2010s, moving from big-box gyms to boutique fitness centers. These businesses offer a more intimate, hands-on approach, requiring only hundreds of members to make the model work. And from a business-model standpoint, I think this will be around for a long time.
Do you have the grit needed to be a successful franchisee? Find out with our free franchise aptitude test.