In this article, we reveal the most promising and ever-growing Covid-19 industries that are expected to remain stable and grow steadily irrespective of the pandemic uncertainty! The information is backed by detailed research done by our competent team.
Our most recent quarantine due to the Covid-19 pandemic led to a nationwide recession that the country is only beginning to recover from recently. Nevertheless, after over 500,00 businesses at Vetted Biz researched and analyzed, there are a selected few industries that able to remain stable despite social distancing restrictions. This is on top of the expectation that other industries will recover and thrive after the lockdown restrictions have been lifted.
There are several factors when evaluating the industries, such as
- The business’ ability to adapt to these new restrictions,
- Opportunities to diversify or change strategies during difficult times,
- and the curve model best suited for each industry’s recovery process once lockdown restrictions finish being lifted.
Finally, if possible, this study also cross-referenced industries’ performance predictions with the historical data on their SBA loans, which can be found here.
The Three Major Takeaways in COVID-19 Proof Industries
The findings from this initial research concluded that COVID-19 resilient industries, or industries that are able or likely to recover quickly after lockdown has been lifted, normally contain the following three characteristics:
- Secure payments, which refers to having recurring revenue by having periodic contracts or offering necessary or “essential” services;
- Market leverage, which relates to having a strong brand reputation and industry performance before the lockdown. Thus these businesses do not have to spend money on advertising during the lockdown period; and
- An efficient budget, which encompasses factors such as high margins, strong liquidity, and overall profitability.
The article concentrates on these types of industries, such as their strategy to adapt to the situation as well as their relation to the three distinct characteristics of secure payment, market leverage, and efficient budget.
Property Management Industry – One of The Rewarding Covid-19 Industries
Property Management is strong because these businesses are deemed “essential” services by homeowners who are willing to pay a lot of money for their commercial or residential real estate properties to be managed. This means a reliable source of recurring income for property management businesses.
Additionally, property management businesses can be run in from a home office and by 1 or 2 employees only. Approximately 60.1% of Real Estate industries are able to pay-in-full their SBA loans.
Takeout and Delivery – The Ever Popular Industry Unaffected by Covid-19
Takeout and delivery restaurants have increased their sales during the lockdown period. Efficient budget and market leverage are the two reasons why these no dine-in restaurants have flourished during this time. These restaurants, known as ghost kitchens, incur a lower real estate cost because they take up less space to run their delivery and take-out orders, and the location of the restaurant is not a major factor to take in foot traffic.
Additionally, these kitchens have a lower employee salary cost, requiring as little as 2 or 3 individuals to run the business. Employees can practice health safety protocols of social distancing. And thus they can reduce the contamination risk of spreading COVID on their food. With respect to the sector’s market leverage, recent studies have shown that 31% of consumers use delivery services at least once a week and that 59% of millennial orders every week are either for takeout or delivery.
Accounting and Tax Preparation Businesses – Always in Demand!
There is a relatively increased demand for tax preparation and bookkeeping services after government stimulus packages were sent out. These accounting and bookkeeping industries therefore could leverage their market presence.
Bookkeeping and tax preparation businesses receive secure monthly payments and renewals from businesses for their services. Another great component of these types of businesses is that they can be operated from a home office with as little as 2 to 3 employees. Through an efficient budget, secure payments, and strong market leverage, the bookkeeping and tax industry is able to survive despite going through a COVID-induced recession
Based on a recent study on SBA Loans between 1991 and 2019, 61% of food and beverage franchise loans were paid-in-full. This is relatively high with respect to fitness centers or home services. Efficient budget, market leverage, and reduced costs show that the takeout and delivery model is the only sector of the restaurant industry that is expected to grow and thrive as the lockdown restrictions continue any further.
Landscaping – One of The Covid-19 Industries Which is a Necessity
Because businesses must conform to the landscaping orderliness of state and municipal laws, the landscaping industry is deemed an “essential service” even during the lockdown. Many landscaping businesses also need to provide their services in other essential businesses like grocery stores.
Additionally, as commercial businesses open, landscaping businesses can maintain their existing relationships while building on new ones. The landscaping businesses have recurring revenues because of their long-term service contracts.
Because landscaping is customized to the client’s needs and location, this business does not have real estate expenses to worry about.
Industries that will rise after COVID-19
Cleaning & Maintenance
When COVID-19 subsides and businesses everywhere are able to operate, there will be an increased demand for cleaning services. This industry is expected to have the fastest recovery curve soon after the restrictions are lifted. This industry will have the strongest market leverage Because businesses that reopen must follow sanitation protocol and be a safe and comfortable place for clients to go to.
Cleaning services do not have high employee or equipment costs. The cleaning industry also has the highest SBA paid-in-full rate at 67.8% from 1991-2019. So they will most likely be able to recover after the pandemic.
After School Programs
Children’s education is another industry that will likely experience a strong bounce back after the lockdown restrictions are lifted. Due to the shift to online education, children’s educational programs have continued to maintain business operations and their market presence.
During the lockdown, many parents faced difficulty working from home while watching their children. Children’s after school and education programs are beneficial to enrich the children’s lives and needs for working parents. These programs have strong leverage for steady growth after the lockdown restrictions because of their low SBA default loan rate at 4.2%.
Salons in the Beauty Space
Beauty salons and barbershops are not “essential services” during the lockdown. But they are expected to have a fast recovery after the lockdown. Men and women alike have waited for many months to get their haircut or other beauty services. The beauty service industry will make a strong recovery because of the market leverage and demand for people who would like to resume their self-care routine after COVID-19 has subsided.
Results and Conclusion
A business’s ability to adapt and grow under unique situations, such as the period of which the lockdown restrictions have passed, will be a motivating factor for companies to decide on investment-worthy projects.
The industries discussed in this article show businesses with secured payments, efficient budgeting, and strong market leverage, they are the best businesses to grow back from the COVID-induced recession.
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About the Author: Patrick Findaro is the Managing Partner of Vetted Biz, the largest platform for accessible and analytical data on U.S. franchises and businesses. Vetted Biz has reviewed thousands of Franchise Disclosure Documents and SBA Loan Data from 1991-2019.
Connect with Patrick on LinkedIn.