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A few good reasons to start a business in a small town
by Phil Soreide
Granted, not everyone is cut out to be an entrepreneur. It takes a certain extra measure of gumption, confidence and self-discipline; a willingness to learn; an acceptance of hard work and sacrifice; and sometimes – but not necessarily – a pot of money.
Still, those standards aren’t that high, so I can’t understand why entrepreneurs seem to be so hard to find. There are plenty lot of upsides, after all.
- You are your own boss. You make the decisions, write the policies, and set the hours.
- You control everything from concept to production, marketing and sales.
- You have the opportunity to build equity, which can be kept, sold, or passed on to the next generation.
- You get to say, “I’m president of my own company” when people at cocktail parties ask you what you do.
- You can make a tangible contribution to the economic development of your local community.
All kinds of studies on the impact of entrepreneurs show why they are sought by economic development agencies, and especially those in rural areas: they engender employment creation, productivity growth and innovations. More importantly, recent studies show that entrepreneurial firms affect the employment growth rates of all companies in the region in the long run.
What that means is that if you’re willing to put yourself out as an entrepreneur, there are people standing in line to help you.
Self-employment beats unemployment
As the country continues to work its way through the Great Recession, one can’t help but be exposed to interviews with desperate job-seekers. I can relate to the soul-killing drudgery sending out resume after resume, going on fruitless interviews, and helplessly watching your resources dwindle must be. But in that context and thinking in terms of the millions of people affected, I can’t understand why more people don’t consider quitting the job search and spending their effort on owning their own job.
Starting a successful business of your own is never an easy path, but, depending on the type of business, you may find it’s easier in a small town than it would ever be in an urban center. Here are some reasons why.
- Governmental support. Even today, governments at all levels, from the federal government in Washington, to numerous Nebraska state agencies, to the boards and councils that govern rural counties and towns are eager for new businesses to locate in rural communities. There are all kinds of programs, grants, advice and financial aid you can tap into if you intend to locate in a rural setting, especially if your business plan indicates your business will create living-wage jobs.
- Community support. It’s hard to imagine an urban community that will pull for your business to succeed the way a small town will. Small towns need an inflow of business to remain viable. They need not only the economic benefit of your sales or property taxes and the jobs you may provide, they need the optimism and spirit your enterprise represents. If you approach your business with diligence and enthusiasm, a small town community will do everything it can to help you be successful.
- Lower cost of space. Many small communities have a surplus of retail and commercial space available. Because too few entrepreneurs have the vision to consider a small town, the demand is low and so is the cost. You’ll find that commercial and retail space – often nice, well-kept properties – can cost half as much as in urban areas.
- Reduced cost of doing business. Some business costs, such as shipping, may be somewhat higher in rural areas, but many costs, such as wages and business insurance are likely to be significantly lower. If you can keep your costs low on the front end, it’s easier to make a profit at the end of the day.
- Lower cost of living. The same forces that drive down the cost of insurance and space for businesses are working to make housing and insurance more affordable on an individual basis. When you consider both your cost of living and your cost of doing business, you’ll find you don’t need quite as much money to make it in a small town.
- Small town way of life. If you think knowing and greeting your neighbors and customers on the street is a good thing; if you like the idea of a low crime rate, no traffic jams and virtually no pollution; if you want to feel integrated into and important to the community you serve, a small-town business might work for you.
How to get started
You may wish to explore buying an existing business in a small town. Many business owners feel a responsibility to provide a service to their community, and when the time comes to retire, they are often more interested in finding a viable successor than in making a huge profit. (Click here to view Nebraska Rural Living’s database of businesses and commercial properties available in our region. Just understand that this is by no means a comprehensive list of opportunities.)
But regardless of whether you‘re buying a business or starting one of your own, your process should start with research.
If you have a town in mind, start with an assessment of the town’s needs as they relate to your own skills and interests. Some towns have lost merchants and services they are eager to replace, while others have a demand for new types of businesses that’s going unfulfilled. Find an opportunity you think will work, then set out to prove it by doing a thorough assessment of the market conditions.
The best way to approach this is by writing a formal business plan. In it, you’ll assess the objective strengths and potential weaknesses of your idea. You’ll identify who your potential customers are, as well as each of your potential competitors. You’ll write down how you intend to reach customers and what about your business will make them stop trading with your competitors and start trading with you.
Make a plan
In our part of Nebraska, a group called the PK Partnership, made up of businesses, economic development agencies and chambers of commerce, regularly schedules a 12-week business course called EDGE (Encouraging, Developing and Growing Entrepreneurs). At the end of this program, participants will have studied organization, financing, bookkeeping, marketing, management and other aspects of business and completed a business plan – a vital tool for anyone seeking a business loan from a bank or hoping to win a grant from a government agency.
EDGE is just one example of numerous similar programs available in all parts of the country eager to help rural entrepreneurs get into business. You’ll find a ton on information, tools and resources on the Tools for Business page of the Phelps County Development Corporation, one of our sponsors. The Rural Resources links collection here at Nebraska Rural Living is also a great place to explore some of the organizations, educational institutions and governmental agencies offering resources, advice and support for people contemplating buying or starting a business in a small town or rural area of Nebraska.
Most of us aren’t going to get rich working for somebody else; business unlocks a path to real wealth potential that’s just not available elsewhere. And if not wealth, owning your own business gives you more control over your life and destiny which is why, no doubt, studies show entrepreneurs are more satisfied with their lives than employees.
I understand the comfort of a paycheck, but if you open your mind to being your own boss, there are a lot of people who want to help you make it happen.
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