You might be surprised by how many big companies were started in small towns. Walmart, Mastercard, Kellogg’s, PepsiCo, IBM, CVS, Johnson & Johnson…And we could go on. However, not every business venture is suited to a small-town setting.
When choosing a place to set up your business, there are several different factors you need to take into consideration. These include:
- Accessibility – How easy will it be for your customers to find you?
- Assistance – Are there tax benefits, or any other financial incentives to starting a business here? What sort of networking opportunities will you have?
- Competition – Are there many similar businesses in the area? What’s your USP?
- Cost – How does rent here compare to other locations? Can you afford it? What other fees do you need to factor in?
- Skill base – What is the predominant industry in this area? Will you be able to recruit employees with the right skills?
- Potential for growth – Is there room to expand here?
A 2021 study by WalletHub found that, “Small-town entrepreneurs benefit from a lower cost of living and less competition, but they may suffer from a limited customer and employee base.”
However, thanks to the community feel of many small towns, you will be able to build more personal relationships with your customers, ensuring their continued loyalty. Your staff turnover is also likely to be lower than if you set up in a big city.
As the CEO, you will need to decide which of these factors is the most important for your business. If you’re opening a coffee shop, for example, accessibility is probably top of your list. But if you’re running a tech start-up and you can connect with clients remotely, you’re going to be more concerned about the local skill base and potential for growth.
If, after careful evaluation, you decide that a small-town environment can offer you all the things you need to succeed in business, we’ve got seven useful tips on how you can get started below!
How to start a business in a small town
1. Identify a gap in the market
Before you start a new business venture in a small town, you’ll need to analyze the local market and find out what kinds of businesses are the most profitable and most in demand. Is there a service that established companies aren’t providing? What are residents missing that they don’t already have? Talk to them to find out.
Setting up a business in a small town is very different to starting one in the city. In the city, entrepreneurs can find a niche for almost anything. But due to smaller demographics in towns and hamlets, specialist businesses don’t always thrive. That’s why in-depth market research is a crucial first step towards opening a business in a small town.
2. Have a solid business plan
Contrary to popular belief, every entrepreneur needs a business plan, whether they’re seeking a big investment or not. If nothing else, having a business plan will help you keep your mission and goals straight in your own head. It’s much easier to remember things when you write them down!
As a business owner in a small town, you’ll garner more support from local business leaders, organizations, politicians, and bankers, if you can share a cohesive business plan with them (see the third point on this list).
According to SBA (US Small Business Administration), business plans should include some combination of the following nine elements, depending on your business needs, and who you are showing your plan to:
- Executive summary
- Company description
- Market analysis
- Organization and management
- Service or product line
- Marketing and sales
- Funding request
- Financial projections
3. Build relationships with local business owners and suppliers
Networking is key to establishing yourself as a business owner in a small town. By building relationships with local business owners, customers, and suppliers, you will be able to gain insight and feedback from them and create a community for your brand.
To help you get started, search for a local chamber of commerce. Joining an association like this will help you to connect with other business owners in your area who have been where you are and have done what you’re hoping to do. You’ll learn a lot from their experiences, including the kinds of challenges you’re likely to face as a business owner in a particular town, and how you can overcome them.
4. Know the rules
Business regulations may vary depending on your location, so this step is especially important if you are new to the town or area in which you are starting your business. Look up local statutes and visit the town hall to find out whether you need to apply for specific licenses or permits. Without these documents, you might not be able to open your business.
5. Make a good first impression
Once you’ve obtained all the necessary permits, it’s time to launch your business. To make the most of the small-town community ethos, and to drive traffic from day one, you could send out personalized invitations to residents encouraging them to visit your store or company.
6. Don’t get comfortable – push yourself
As an entrepreneur, risk analysis one of the most important skills to have. Knowing when to take a chance on something is crucial for growth and stability. It’s important to never take anything for granted. Do not think that because there is less competition in small towns, that there is no competition at all. Continue working to give your customers the best service and experience possible to keep them coming back for more!
7. Stay ahead of the curve
Even in a small town, where everyone might seem set in their ways, you need to be open and receptive to change. Markets, trends, and technologies are constantly changing, and if you don’t keep up, you’ll soon find that you’ve been left behind.
To give yourself the edge over your competitors innovate, evolve, and review.
EU Business School offers undergraduate and postgraduate degree programs perfect for budding entrepreneurs. Take a look at the course profiles for our BA (Hons) in Business Management (Enterprise) or Master in Innovation and Entrepreneurship to see how we can help you achieve your goal of starting a successful business in a small town.