Any $100k recession-proof business startup ideas?

October 14, 2009 10:50 PM

My buddy just landed $100k and we both want to start a business...Any recession-proof business startup suggestions?

He's got a little time to work, but I have a lot more time.

I work as a tech consultant for startups so you would think I would have a great idea for us to invest in. But I dont...I am good at starting businesses from an administrative standpoint (state filings, accounting, technical setup, websites, emails etc), but don't have actionable ideas with a lump sum of money.

I have considered buying established business (searching places like bizbuysell) as well as online businesses through flippa.com, but have a problem with the real valuation of a company. Plus from what I have seen on flippa, if a site is netting 10k/month, they want at least 120k/year...and its hard to judge the validity of their numbers and growth potential.

And we dont care about the stigma of the industry (ie adult).

posted by schindyguy to work & money (25 comments total)

****I meant "at least $120k...."*****
posted by schindyguy at 11:40 PM on October 14

I don't think there is any recession-proof business. When Fortune 500 companies are struggling, everyone is struggling.

I also don't think that only money is going to lead to a successful business. There is a lot of shitwork that you will have to do, and you won't do it well if you don't care about the business. If your business is not based on an idea that you really want to see work, you probably won't do well. (Even businesses that care deeply about their product fail. $100k and a mild interest in business is unlikely to get you much.)
posted by jrockway at 1:22 AM on October 15

First I think you need to get "recession-proof" out of your mind. If recessions have shown anything, it's that everyone is vulnerable.

Besides, even if there was such a thing, I don't think anyone who has a "recession-proof" business is going to sell it to you for $100k. Maybe if you had $100 million but 100k? Doubtful. Look at what businesses are asking for when they're probably just making enough to cover operational costs.

That said, 100k is nothing to laugh at and a very healthy sum to start up your own business. Is there anything you are particularly talented at or have deep knowledge about? Are YOU investable as a business? Would your friend be willing to put in 100k to help build your brand as a consultant?

What about real estate? Buy a fixer upper, invest in fixing it, resell for a modest profit. It's not as easy as it was 3 years ago but it can still be done. (disclaimer - I live in the UK and I might just be watching too much Property Snakes & Ladders)
posted by like_neon at 1:36 AM on October 15 [1 favorite]

Want to be recession-proof? Figure out a business you and your buddy can start with $10,000 and a lot of hard work. Put the rest in the bank.
posted by mmoncur at 2:22 AM on October 15 [8 favorites]

Think about the basics. People are always going to need to eat, have access to potable water, and ideally a roof over their head. Clean clothes are good too.

If it were me, I'd rent a small empty store in a strip mall or street, sell basically a cheap continental breakfast, soup and sandwich for lunch, something else cheap like pasta for dinner. Sell based on quantity rather than quality, keeping prices low, couple of bucks at most. Clientele is not likely to be upscale, but there could be some satisfaction in providing cheap wholesome meals to your fellow man, especially as it gets colder in the season.

You could also do something like a hostel, again cheap meals, and access to a washer/dryer.

Location for either would be key. Suburbia is not likely to succeed.
posted by hungrysquirrels at 3:53 AM on October 15 [1 favorite]

There is no such thing as a recession-proof business. Honestly the fact that you would frame a question in such a manner suggests that you need to take a hard look at whether you're qualified to found a business.

That said I'd figure out how your skills and background can exploit a particular niche and then find a way of convincing potential clients that you are the person to provide that service.

Be aware that the vast majority of entrepreneurial endeavors fail.
posted by dfriedman at 5:02 AM on October 15

Landscaping.
posted by blue_beetle at 5:50 AM on October 15

I've got a friend who works for a distributor of cheap toilet paper (mostly to institutions). Business is good. I think that's about as close to recession proof as you can get.
posted by meta_eli at 6:44 AM on October 15 [1 favorite]

Write a couple business plans. The process will help you flesh out various industries and ideas. Yes it can be time consuming, but at the same time this will help you in the long run.
posted by OuttaHere at 6:57 AM on October 15

If your state permits them, payday loan/check cashing businesses can be highly profitable.
posted by paulsc at 6:59 AM on October 15

Hair salon
posted by elle.jeezy at 7:23 AM on October 15

Sent you a mifi email with a suggestion :)
posted by bleucube at 7:47 AM on October 15

Bar.
posted by phaedon at 7:48 AM on October 15

An electronic discovery vendor that serves law firms and large corporations.
posted by cwarmy at 9:36 AM on October 15

Storage. Not recession proof, but people still need it when they are hit by the recession and they need to downsize or if they split-up.
posted by racingjs at 9:51 AM on October 15

Develop organic & healthy(ish) girl scout cookies, preferably starting with thin mints.
posted by ejoey at 10:35 AM on October 15

Become a landlord in a college town.
posted by cmoj at 11:07 AM on October 15 [2 favorites]

Some good suggestions! ... In an effort to not start a circular debate I will not respond to any Haters or people that believe there is no such thing as recession proof....people will always die, and people will always pay taxes, right?

But you guys are right, I am not trying to necessarily start a recession proof business; we want to start something that we can ride up the business cycle once it turns around.
posted by schindyguy at 11:49 AM on October 15

People always die, and baby boomers are a large, aging population group. Given that, perhaps a business in that area: coffins, private cemeteries, crematoriums, and so on.

Apartments for 65+ age group are really showing up a lot recently.

Or, something that makes technology or equipment more useful for those with physical problems that increase with age -- for example, a keyboard and mouse for people with poor muscle control in their hands (impossible to find, btw).
posted by Houstonian at 12:01 PM on October 15

My company is having a boom year. It's not a recession-proof business; it's a business that does better when other businesses do poorly. In our case, it's repair of business-related electronics, because companies are more inclined to repair when money is tight and replace when money flows more freely.

I'd suggest looking for a business based on that, or on something people need or want regardless of the condition of the economy (such as caskets or food) and where you believe there's a gap in the market you could fill. Or if you're handy and willing to play the long game, there are a lot of houses out there to be had for a song and fixed up, but at this rate it could easily be a few years before you'd start to see them moving easily after your improvements.
posted by notashroom at 12:06 PM on October 15

@notashroom, you are right. That was the distinction I wanted to make...there are clearly industries that do boom in a recession: the repo man, recycling/second hand places, repair (your example), etc. "recession proof" would just relate to things like death and taxes (maybe healthcare) that are not dependent on the business cycle.

I dont know what we are going to do...I have always thought that it takes money to make money and now that we have it, I dont know what to do with it!

I like the bootstrapping idea...work hard with 10% of it and then use the other 90% to grow it (usually with marketing)
posted by schindyguy at 3:44 PM on October 15

Most of the things you think of as start-ups are fairly high-risk. For every youtube, there's a pets.com or 2. Clearly, a good aggregator site, like MeFi, Fark, boingboing, can be successful, if ...

You need way more advice. Talk to some business brokers see what existing businesses are for sale. Go to Chamber of Commerce meetings and see what types of businesses are doing well. Find the Small Business Administration and get tons of great advice and research.

What does your friend love? There might be a market for a well-crafted artisanal organic bourbon. Maybe we need a fabulous online motorcycle parts store. A lot of very successful businesses are sort of hidden. Who grows up wanting to own a plumbing supply chain? But I'll bet it's profitable.

If I had 100K, I'd look for some property and develop a cohousing community. As a consumer, I wish there was a better marketplace for reduced-hype green products, esp. building supplies. As a geezer, I see the need for cell phones that better meet the needs of older people - easier buttons, big type on the screen, and loud enough so hearing-impaired people can use it. and with music and fm radio, cause we like to listen to NPR while we mall-walk. (disclaimer: I don't mall-walk. Not that there's anything wrong wiith mall-walking. )
posted by theora55 at 3:57 PM on October 15

Day care. Most families require two incomes to get by so they need someone to mind the rugrats.
posted by ericales at 5:38 PM on October 15

My buddy does coins, collectibles. He sells jewelry, gold, etc as well. That's his bread and butter. But he doesn't like the coin/collectible e-commerce idea.
posted by schindyguy at 7:41 PM on October 15

I heard today about a woman who started a personal assistant business about a year ago and it's booming, recession and all. Maybe her clients are women who used to SAH but have had to go back to work because of the recession! Or maybe she's just awesome at it and word gets around.
posted by lakeroon at 7:59 PM on October 15