The owners of the Halcyon Bike Shop in Nashville, which opened Tuesday, didn't plan to start a business during a recession.
But selling used bikes and repairing them in times like these didn't sound like a bad idea, said one of the owners of the bike shop, Elise Tyler.
"We think it's the type of business this economy needs," she said.
During tough economic times, entrepreneurs are on the hunt for recession-proof businesses. Liquor stores and funeral homes frequently are cited as examples of the kinds of companies that can survive any economic condition. After all, people die whether or not the country is in a recession. Perhaps even more will die than normal. Or they'll still spend money on health care.
But is there really any business immune to a recession? Maybe not.
"Very few industries at this stage would be recession proof,'' said Soumen Ghosh, the head of the department of economics and finance at Tennessee State University. "You might say people lose their jobs and go out binge drinking, but there's a limit to that. You need money for that, too."
Apparently, not even liquor stores are immune to hard times.
David Osgo, the chief economist for the Distilled Spirits Council, an industry trade group, said the volume of liquor shipped to wholesalers in the United States is up about 2 percent through September of this year, which is less than the average of 3 percent such shipments have been growing annually since 2001.
Osgo expects growth in shipments will be less than 2 percent this year and revenues will be flat or up slightly as the economy continues to slow. It's not as bad as the automobile industry, but it's still not great.
"We are not recession proof,'' Osgo said.
As for funeral homes, they aren't recession proof either, said Robert W. Batson, the executive director of the Tennessee Funeral Directors Association.
"People still have to have the ability to pay for a funeral,'' he said.
And the next of kin normally are the ones stuck with paying.
George Baker Jr., the funeral director at Patton Brothers Funeral Home in Nashville, said he has noticed people trimming their funeral expenses this year. More people are buying 18- or 20-gauge steel caskets, and fewer are buying copper, bronze or stainless steel.
A 20-gauge steel casket at his funeral home sells for $1,895, compared with $4,795 for one type of stainless steel. He has sold about seven stainless-steel caskets this year, down from 15 to 20 in an average year.
"We've seen a tremendous cutback,'' he said. "Families don't want to spend as much money as they used to."
Health care adds jobsSome industries may have an easier time weathering a recession than others, Ghosh said.
Despite unemployment levels reaching a high not seen in two decades, the health-care and education sectors have continued to add jobs, according to figures from the Tennessee Department of Labor and Workforce Development. Those industries have added 6,300 jobs in the state compared with a year ago.
Whether that growth is sustained is another question. Not all health-care jobs are recession proof, Ghosh said. Health insurance is a big driver of health-care spending.
"If people don't have jobs, they don't have health insurance,'' Ghosh said.
The former CEO of drug insurance company Caremark, Mac Crawford, started a consulting business last spring specializing in turning around struggling businesses.
Brentwood-based CrawfordSpalding Group's founders also include his son, Drew Crawford, and another Caremark executive, Bill Spalding.
"We're not one of those industries you would look at and say, 'The economy is going to hurt them,' '' said Drew Crawford, a former Caremark executive himself. "We do see opportunities for our firm in tough economic times."
Drew Crawford built a reputation for himself as a turnaround specialist at Caremark and at Charter Medical Corp. before that.
Still, he doesn't want to sound overly confident.
"I don't think you can say anything is immune to this type of environment," he said. "We're in an environment we've never seen, certainly not since I've been alive."
Management called keyGermain Boer, the director of the Owen Entrepreneurship Center at Vanderbilt University, said it's less important what the business is than who manages it.
"If you have the right kind of manager, they will figure out how to make their business better than anybody else,'' he said.
Boer said managers who guess correctly about what's six months down the road are more likely to buy the kinds of products that will sell, for example. Those who cut expenses, even laying people off, earlier than competitors may get an edge in a recession, he said.
"If you get a manager who is creative enough, (the business) may not be recession proof, but it may do better than competitors,'' Boer said.
There are plenty of examples of businesses that got started during a recession — most notably Hewlett-Packard, General Electric and Microsoft.
Businesses started when times are tough are able to pay cheaper rent for offices. They can get office furniture from liquidation sales.
"I don't think people think, 'This is a recession so it's a good time to start a business,' " Boer said. But "if you have some cash, you can get good buys on a lot of things."
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