No one knows the future, but the wise entrepreneur tries to anticipate crises. With the economy not quite going in the direction many of us were hoping, this is as good a time as any to take stock of the sectors that will help you ride out the tide.
And if it is any comfort, it’s not just the Kenyan economy that is struggling – the International Monetary Fund recently admitted that after years of steady global growth, economies have hit their peak.
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So what does that mean for your survival as an entrepreneur? Well, running a business requires that you progressively master the system, research the market and make productive investments.
A struggling economy doesn’t mean you can’t find individual success. As billionaire entrepreneur Mark Cuban says, staying ahead of everyone else in business will make you stand out in the market.
While no venture is entirely immune to a bad economy, the following are some of the more resilient ones.
1. Health services
One’s health is not dependent on their economic conditions, unfortunately. People will always need medical attention, regardless of their financial situations.
During hard economic times, Kenyans’ harambee spirit tends to come out. This is not only important for the patients who need the money, but also those running businesses in healthcare.
If you’re medically inclined and are looking to start a business that’s more or less recession-proof, then consider investing in this sector.
Many of the players in the industry are leveraging on technology to bring down prices, ease access to quality drugs and medical advice, and reach a wider market.
There’s also growing interest in preventative care, which means you can teach people how to take better care of their bodies through nutritional brands, fitness camps or health talks. Study existing market trends and the competition before settling on an idea.
2. Groceries and consumables
Food is another one of those inescapable needs. Even in hard economic times, people will still need to buy supplies for their survival. There may be a general reduction in the quantities bought, but food remains a basic need.
The sector provides many opportunities, however, when budgets get tight, keep in mind that price will be a big factor in your success. You will want to bank on volume. You can distribute fresh produce, open a themed restaurant, or go into your own food production, making things like flours and dried fruits.
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3. Beauty and cosmetics
Looking good never goes out of fashion. And during tough economic times, it can be especially important to portray an image that keeps your customers engaged.
You can take advantage of the upsides of the image industry by investing in beauty shops, salons, spas and parlours, and getting your pricing right to keep people coming through your doors. You can also cash in on the natural movement to launch your own skincare brands.
It is human nature to want to get together and just hang out, whether times are good or bad. And for social gatherings, alcohol tends to make up a part of the equation.
The alcohol market is vast, which means the opportunities to invest in it abound.
You can open a themed bar or club, set up a cocktails business or even invest in a microbrewery that offers tastings and cultural tours.
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5. Repair shop
When people are flush with cash, they’re more likely to buy something new than fix something old. But when times get difficult, people want to hold on to as much money as they can. This is what makes a repairs business a great idea.
Whether it is a car garage, tailoring or equipment maintenance, you’re not likely to lack customers.
6. Death and funeral services
Death is an inevitable consequence of life. It may sound callous, but this is one sector that will stand the test of time, whatever the economic circumstances.
The businesses you can set up in this sector include making coffins and headstones, providing morgue transfers and public address systems, or even investing in a mortuary.
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7. Financial services
If you own an auditing firm or are a trained accountant or financial advisor, you’re likely to thrive even more during hard economic times.
As companies and individuals look to make smarter spending and investment decisions, optimise budgets, and minimise their tax exposure, your services are going to be in demand.
You can take advantage of this by setting up a consultancy that banks on your skills. For a fee, you can help SMEs with their book keeping, run tax classes or hold personal finance seminars.