Types of Products

• The factors of success for opening a business include offering a high-demand product at a reasonable price. Product demand shifts during times of an economic downturn. Therefore, the product your business sells must be recession-proof. A 2009 Lubbock Avalanche-Journal article lists examples of recession-proof goods including do-it-yourself products, canned goods and classic comfort foods such as boxed meals.
  
  Other possible business ventures that tend to boom during economic downturns include home safety products, debt collection services, firearms and weaponry.
  
  

Potential

• An economic recession could be advantageous to your new business's bottom line. Several companies have posted an increase in profits during economic downturns, including Walmart, Hormel, Kraft and Hershey. All of these companies share one thing in common. They offer items that consumers typically purchase due to a decrease in income. Economists call these purchases "inferior goods." Hence, opening a business during downturns is profitable if your business offers a less-expensive alternative to commonly consumed items. For Hormel, their product, Spam, is a cheaper alternative to ground beef.
  
  

Benefits

• Opening a business during a recession provides multiple business advantages. Many vendors may be willing to negotiate a lower price for their goods if their industry has been hit hard by the recession. If real estate prices are negatively impacted by a recession, business owners may pay less for rent as well.
  
  

Considerations

• Starting a business featuring high-priced luxury items is a risky venture Though the wealthy may still buy high-end items, the upper middle class typically exerts more caution during recessions. If you purvey luxury goods, entice consumers overseas. A 2010 Bloomberg article states that the demand for expensive items is strong in emerging markets. Thus, targeting wealthy consumers in countries with rising economies, such as China and India, can be advantageous.
  
  

Warning

• If a new business experiences significant losses over a period of six months, do not place the full blame on the economic downturn. Before starting the business, have a clearly defined exit plan based on the amount of cash and capital available. Estimate how long the company will stay in business based on best-case and worst-case scenarios.