"Counter-Cyclical" is even better than "Recession-Proof!"

“Counter-Cyclical” businesses are even better than "Recession-Proof" ones.

In our last post we noted that few people really understand what constitutes a recession, and what kinds of products, services and business entities are truly “recession-proof.” Clearly those business leaders with products or services that are largely unaffected by downward economic trends are in the enviable position to ride out the storm and in many cases even prosper within it. These are the “recession-proof” businesses. But as we said previously, there are a very few products and businesses that are truly “recession proof” in spite of this term being en vogue today.

There are, however, some businesses that are even BETTER than “recession-proof.” We call these the “Counter-cyclical” business products and services. “Counter-cyclical” products and services are those rare items that actually demonstrate an increase in demand and price even when general economic trends decline. Wise entrepreneurs are constantly looking for products and services as well as business models and types that are truly counter-cyclical. These rare business types allow employees and owners not only the lifeline through difficult times, but they also allow them to prosper in the midst of tough economic times. Finding or owning a truly “counter-cyclical” business can be the find of a lifetime!

Here is a commonly agreed upon list of business types classified by “cyclical” and “counter-cyclical”:

“Cyclical” business sectors - highly affected or closely follow the up and down economic trends.

• Business Services
• Automotive Sales and Service
• Personal Services
• Lodging
• Food Service/Restaurants

Those individuals who work in, or have ownership and equity stakes in the “cyclical” business sectors, acutely feel the impact of economic trends such as we are currently experiencing. Now is definitely not the time to invest in, or acquire equity in these businesses within the cyclical business sector group. The current landslide of employment loss and Gross Domestic Product (GDP) decline can be traced almost entirely to these business sectors.

“Counter-cyclical” business sectors - not only unaffected by economic trends, but respond in the opposite direction to downward economic trends.

• Legal Services
• Amusement
• Recreation
• Private Education and Vocational/Technical Education

Individuals who work in, or have an ownership and equity stake in these “counter-cyclical” business sectors are in the enviable position of increasing and prospering even in these difficult economic times. Wise entrepreneurs confine their acquisition and investment interests to these “counter-cyclical” business sectors.

Access Education and Access Education Franchising Co. are enjoying the benefits of expansion and increase, even within this difficult economic climate. Rarely does a day go by when associates and others comment that it is so unusual for a business to be expanding as we are. That is the beauty of a truly “counter-cyclical” business -- as the economy declines, our business not only is maintained, but is increasing! As a provider of private vocational/technical education, we enjoy more than being just “recession-proof” but are a “counter-cyclical” business.