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This year has taught me a lot about the importance of...
Need based business
A thread
Need based business
A thread
People have different criteria for what a need based business is, but for me it’s any business that serves the masses, irrespective of the economic climate of the world.
Some of these businesses have lived for thousands of years and will typiclly outlive any global epidemic or recession.
This is not to say that a recession would not affect them. Or they can survive if they are run inefficiently. But there is definitely a bigger safety net!
This is not to say that a recession would not affect them. Or they can survive if they are run inefficiently. But there is definitely a bigger safety net!
Let’s use our country as a case study, we are heavily reliant on crude oil exports (bunny lite). About 90-95% of our export revenue comes here. But the oil and gas business is relatively new in comparison to some other forms of trade.
It is controlled completely by OPEC, and it is not sustainable( the wells will eventually dry out) might not be in the next 50 years even. But they will eventually.
There is also an overall shift towards more renewable forms of energy globally.
There is also an overall shift towards more renewable forms of energy globally.
And I haven’t even mentioned the fact that prices just crashed over 30% because of circumstances outside our control!
What happens to our economy when this demand drops and reserves start to dry out?
What’s the plan b? Is there one?
What happens to our economy when this demand drops and reserves start to dry out?
What’s the plan b? Is there one?
I’ll be clear, I’m not saying people shouldn’t go into short- medium term businesses, if you see an opportunity, take it but you must go into them knowing the risks involved. And a good way to hedge against these risks is by going into businesses that will stand the test of time
Here are some industries I feel will always have a market:
Agriculture
Banking
Tax
Medicare
Real estate
Utilities (water, electricity etc)
Education
Agriculture Banking Tax MedicareReal estate Utilities (water, electricity etc)Education
People will always need to eat.As long as money is being used around the world, people will always need banks. We will always need hospitals to take care of people. The tax system has been in place for over 2,000 years and will remain so.
Because all of these industries are need based to an extent, they are huge money makers and governments know that. They are typically capital/ labour intensive and have high barriers to entry.
But you don’t need to open up a school to be a major player in education.
But you don’t need to open up a school to be a major player in education.
You don’t need to own a farm to be in agriculture, you can sell fertilizers to people who own farms, or sell hay to their horses! It’s all about your value proposition.
Take time to learn about the industry and it’s deficits. That will tell you where the opportunity is.
Take time to learn about the industry and it’s deficits. That will tell you where the opportunity is.
