Recession-proof Healthcare Business

Recession-proof Healthcare Business

When a recession or an economic slowdown occurs, markets become unstable, leading investors to sell stocks. While some industries are very susceptive to economic changes, other industries perform well regardless of what’s happening with the economy. And according to two different reliable sources, as they list down the industries that strive during recessions; Medical Billing is a recession-proof Healthcare business. 

The U.S. economy is falling rapidly into a recession due to the expanding COVID-19 crisis. Since we will only know what industries weathered this recession best when it’s over, we looked back to the last recession for some guidance. During 2008, during the Great Recession, CNN reported that only 25 stocks out of the S&P 500 had positive returns.

There are many reasons why these particular stocks increased, and the impact of every economic recession is different. However, looking at which stocks did well can still show broad patterns of what kinds of stocks may do better in economic downturns.

As one of the top 10 Industries that strives during a recession, we’ll focus on Healthcare & Medical Billing.

The reasoning behind this is clear. You need health care to live, and therefore are much less likely to skimp on it even when your income declines. The technical term for this is price inelasticity. Not all health care companies are created equal, and recessions are likely to hurt those companies with more debt and less cash flow.

These enterprises have less ability to absorb losses and service their debt at the same time. Therefore, it may be prudent to stick to health care stocks with low debt-to-equity ratios and avoid biotech startups that are still in their early phases.

The healthcare industry continues to grow even during recessions due to a combination of rising demand and the constant advancement of science and medicine.

There will always be a need for certain healthcare services, with some tending to increase demand during more challenging times.

Labeled as “Essential Industries”

Healthcare, food, consumer staples, and basic transportation are examples of relatively inelastic industries that can perform well in recessions. They may also benefit from being considered essential industries during a public health emergency.

Companies that supply services that support online shopping, work arrangements, teleconferencing, and at-home substitutes for traditional services have tremendous opportunities right now.

What are the most recession-proof businesses for Americans?

Healthcare will always be a recession-proof industry as we cannot do without it. There are several different paths you can take, from providing care for seniors or supplying pharmaceuticals. If you can get a healthcare business up and running, then you will always have customers.

A cleaning business will also always have customers. This is because so many laws and regulations require organizations and public spaces to be kept clean for health and safety reasons. This goes for all kinds of business premises and areas open to the public so that this business idea can be very lucrative even during a recession.

With so many businesses operating online, the importance of digital marketing is only going to increase. Starting this kind of business opens up many opportunities which will still be there during a recession.

How do you create a recession-proof business?

Here are five steps you can take to make your company recession-proof for job security.

1. Choose the right business: The first step is starting the right kind of business that can do well despite being in a recession.

2. Be adaptable: Small businesses and startups have to be adaptable to survive. They must be flexible with their plans and pivot quickly in a new or innovative direction should the need or opportunity arrive.

3. Negotiate with vendors: Suppliers and manufacturers will be affected by a recession, so their rates will be up for negotiation. Again, use this opportunity to improve your bottom line.

4. Cash flow management: Avoid overspending by properly managing your cash flow. 

5. Listen to your customers: Listen to your customers’ needs and how they change according to the economic situation.

The Bottom Line

It’s important to remember that each recession is different, and so will the stocks that do well during them. 

Investing during an economic downturn is an enormous topic. Other areas that are traditional defensive investments are utilities (people always need water and heat) and personal storage (a place to put things when downsizing). 

That said, this should give you an excellent place to start looking for how to invest during a recession. Good things to keep in mind are what goods and services people and businesses can easily live without and what are essential. In addition, keep in mind what businesses people may patronize more if their income decreases.

Stocks and industries that do well during a recession may not always do well when the economy recovers. So you will need to change your investment strategy when the good times return. Keep that in mind when building your portfolio.

Medical Billing Opportunity is here to help guide you and provide you all the resources you need to start your own Medical Billing Business. Here, Adam Nager is your instructor/mentor, a top-rated healthcare business coach. His companies generate $10+ million annually with a portfolio consists of 7 different healthcare businesses. He’s a Nationally recognized speaker and author with 100% real knowledge of the industry. With him, you will learn about the different obstacles you will face as a medical billing business owner, so you won’t have to undergo trial and error anymore.

Head over here to get more information.