What are the most recession- and crisis-proof businesses?
In light of the COVID-19 crisis, it’s understandable to think long and hard about what types of business are immune to recessions or global economic crises. While none are truly immune, there are a number of businesses which do tend to weather these types of storms.
One particular advantage is that the UAE entrepreneur can start any of these businesses essentially by themselves, then grow as time goes by. So the private tutor later opens a school; the accountant later starts their own firm; the auto repair specialist opens a shop. And so on.
So let’s look at some options for UAE entrepreneurs.
- Accountancy / financial services
- Food delivery / food trucks
- Auto repair
1. Accountancy / financial services
Paying taxes never stops, regardless of the economic situation. In fact, it’s common for accountants to see an increase in business during a recession – helping individuals and companies make use of the tax benefits available to them, while also giving them visibility over their income and expenditures during difficult times.
As we have seen with COVID-19, it’s common in times of crisis for governments to create new programmes and loan schemes – as well as changing financial regulations. Having a tax accountant on-hand in these situations becomes vital for businesses trying to get through a recession.
As with accountancy, financial advisors are also always required during challenging times to help individuals and businesses. They are on-hand to:
- Provide guidance
- Forecast future trends
- Protect client investments and assets
One key point you should note – if you’re setting up in tax or finance in the UAE, you do need to hold a relevant qualification and demonstrate that you have three years of hands-on experience. A company setup specialist can guide you through this process and help assess your eligibility.
2. Food delivery / trucks
Food is another area almost impervious to downturns. A 2015 report by the Global Restaurant Investment Forum (GRIF) identified street food as an emerging trend in the Middle East. Meanwhile, the food truck scene got a huge boost from the Eat the World DXB festival, and food delivery services are popping up by the day.
Food trucks have low entry costs, work well with social distancing, and if one location doesn’t work, you can simply drive to another one. You can start with a single truck then scale up to a fleet if required.
Perhaps the most exciting area of food is in delivery – again, something that remains popular regardless of the economic situation, and particularly during this current pandemic. While there is no shortage of major players in the market (Talabat, Uber Eats, etc) we are seeing gaps in the market for smaller, more agile food delivery apps.
And the great news is that for an entrepreneur with the right skills you don’t need to own a restaurant or catering business – you simply collect food from local restaurants and deliver it. Plus, you can work with a company that specialises in mobile app design to ensure your service reaches the most people.
With the right support, applying for a food delivery license in Dubai can be incredibly straightforward. (Food truck licenses are a little more tricky.) Either way, working with a company formation specialist means that you get your food business up and running with the minimal amount of hassle.
3. Auto repair and maintenance
One thing people don’t tend to do in tough economic times is purchase a new car. More likely, they’ll repair their old one. So, auto repair shops do well during recessions – a few hundred on a repair is nothing compared to being locked into a multi-year payment plan for a new vehicle.
So you might look at this as a job for an individual auto mechanic, or as a manager looking to set up a shop. Either way, the need for people to keep their cars running continues, regardless of the economic situation.
There are four key groups when it comes to auto repair in Dubai.
- Motor vehicles
- Specialist categories
Just like the other options we have covered such as accountancy or food, this area has the ability to grow. What might start as an individual auto repair mechanic could flourish into an entire maintenance shop, catering – for example – to public transport vehicles, and beyond.
Repair services are also pretty much recession proof. There will always be people who have some task around the house that they can’t do. And if you have the right skills, you are in a position to charge for such work.
Much like auto repair, this area is more or less immune to recession as – more than ever – people are reluctant to buy something new. When we’re feeling money-conscious we are more likely to fix whatever is broken – whether it’s a dishwasher or a roof.
This is a business where there is almost no initial investment, providing you already have the necessary tools, so you can get started fairly quickly.
It’s been noted that in the UAE there is a market for repair/maintenance specialists who have great communication skills and are very reliable. If you can deliver on those two points – as well as doing great work – you could find yourself with a nice niche. As with anything, exceeding client requirements means you’re the one that gets called back for future work.
In terms of licensing, it’s best to talk to a company formation specialist who can advise whether free zone or mainland setup would be more suitable for you.
From the academic to the vocational, there will always be work in the UAE for tutors. In fact, private tutors have good earning potential given the number of potential clients.
Of course the need for qualifications will depend on what it is you’re teaching. But what begins as you teaching one individual might turn into your own school one day – whether that’s a language school, a sports academy, or something else entirely.
To cut down on costs (for you and your students) you can also do some of your teaching online. This is particularly useful given the current social distancing requirements, but is in fact a great way to earn extra money regardless.
Startup costs are low, so the best way to start is to research what qualifications you need to teach in your chosen area, then talk to a company setup specialist to see the best option for your new business.