It’s generally believed that people who live in large cities have more advantages for business and career development than inhabitants of smaller towns. Indeed, this is a truism, but such a philosophy doesn’t apply to everybody. If you are a small town resident and moving to the capital isn’t on your agenda, it doesn’t follow that you won’t be able to run a successful business within your town limits. You can take full advantage of local singularities that aren’t open to novice business owners in bigger cities.
What’s the best business to start in a small town?
Bet on something you are good at. This is the perfect chance to start gaining experience in the business world. Let’s say that over the last few years you worked in a company, feel experienced enough and now want to go your own way in this industry.
For example, an accountant can easily open his own business, providing financing and tax accounting services, making tax returns. Such services are always in demand, especially among small business owners and sole proprietors. It’s easier to cooperate with a self-employed accountant than hire a permanent employee. That is to say, outsourcing accounts support will be less costly than a salaried accountant on the staff. If you are a true expert, you can also provide specialized courses and share your knowledge and experience with other people. There are a lot of professions that can do likewise: Lawyers, restaurant chefs, cosmetologists, photographers, masseurs, etc.
Pay attention to fields that are always in demand. There are particular business niches that don’t depend on seasons and crises. For example, people will always eat and drink, get dressed, take care of themselves and visit doctors. Basically, everything concerning people’s daily routines and principal needs. Analyze the availability of shops and pharmacies in your area. Is there a supermarket in your neighborhood, or do you need to go across town? Analyze the situation and figure out what is missing and what is already in place.
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Low purchasing power. Please be aware that your future customers and purchasers are residents in a district where salaries are lower and the labor market is pretty tight. You’ll agree that selling certain exclusive, expensive items wouldn’t be rational. Sophisticated fashion boutiques, car showrooms, VIP beauty salons, venues like these are pretty risky. Similar business ideas in a small town won’t find customers and, instead of a profit, you might lose money.
Attract tourists. Tourist towns have their own advantages. Look at the cozy little stores, workshops, cafes and family businesses in small European towns. You can choose to follow this line in your hometown and turn your business into a local attraction. You could promote local traditions and crafts, combining them with souvenirs.
Create a business to provide scarce services. For example, there are very few affordable entertainments and places which both adults and kids can visit. So you could create an open-air movie theatre, DIY and cookery classes, provide camping programs or even open a sports bar. Figure out what your town is missing and give it to the people!
Go online. Today the Internet gives business owners more opportunities, so why not grab them? The type of business and its target audience affects online results, so before you start make sure you’ll be able to take full advantage of this. Internet cafes and Internet courses are great examples of successful business ideas for small towns. Your business can be as simple as they come, or you could include some shticks. For example, if you’re thinking about opening a farm food store, maybe it’s worth complementing the offline business with a website and delivery. Right away, this will make you stand out from your competitors, at the same time as providing additional opportunities for scaling up the business later. Or how about developing a website about your town, filling it with news, announcements, activities, events and other interesting information. Once this website has become popular, you could sell advertising and produce partnership materials and special projects.
Business based on local products. How does this work? You buy from the locals and sell in bigger towns or cities at higher prices. As a rule, local produce (fresh vegetables, fish and farm produce) is relatively cheaply priced. In big cities, “eco-products” are a huge trend and, therefore, resale margins are significant.
Small-scale production. You can produce goods for sale in other cities or within your town. This could be anything: Bakery, furniture production, welding, etc. So use your imagination, explore your town’s market, and find your niche! And take note, production costs in a small town are much cheaper.
Based on someone else’s successful idea. This type of business is called franchising. This means you no longer have to create a business from scratch but represent a brand. Franchises are now offered by many well-known brands. Which of them to choose: Clothes, cosmetics, fast food—it’s up to you. But you need to focus on the needs of town residents.
Business types in a small town can be divided into three main categories:
- Providing services. This could be a tire service and car wash, hairdresser and beauty salon, repairs (plumber, electrician, welder, tiler, etc.).
- Retail. There is a huge range: Grocery stores, pharmacies, household stores, building materials, car parts or handmade goods (it is better to combine sales through both an actual and an online store).
- Self-production. This category may include processing of local products for sale in a large city or a restaurant business (restaurant, cafe, bar, coffee shop, mini-bakery, etc).
What you need to consider when starting a business in a small town
The entrepreneurial features of small towns are related to the specifics of their economic development. Usually, a small town is considered to be an urban center with a population of 50,000 people or less. If your hometown sounds like this, don’t jump to conclusions and give up on the idea of starting your own business. As we said earlier, there’s always a way to build something and succeed.
A business in a small town has its own features:
A number of empty niches for your business. It is possible that there are plenty of shops or cafes in your town, but this does not mean that all niches have been occupied. It’s worth taking a closer look.
A low level of competition. Probably, you won’t need to fight for every single client as hard as entrepreneurs in metropolitan areas do, competing with similar start-ups. But you shouldn’t relax and allow the level of service to fall because there’s less competition. You must stay client-oriented and keep everything at the highest level.
Limited customer flow. Let’s say your store / cafe / beauty salon, etc. is already visited by almost all the town’s residents, so there’s no way to increase the client base. If you want to earn more, you will have to come up with new sources of income. For example, bet on tourists (if the town gets them) and make your place more attractive for new arrivals.
Lower start-up costs. Since the cost of buying/renting real estate, labor, supplies and other things in a small town is several times smaller than in a large city, it is possible to start a business with lower investment.
The importance of looking after your reputation. If you had a good reputation before starting a business then maintain it by providing good services and high-quality products.
So, where to start?
The first thing you need to do is come up with an idea that will allow you to do business in a small town.
The business idea should be:
- Fresh and relevant (if there are 15 stores for 5000 people, then ask yourself if another one is needed);
- Easy to implement.
Once you’ve got an idea for a business in a small town, you can put it into practice:
Do some research.
You should study the theoretical part of the business that you are going to start.
If you stay informed, it will be much easier to open and manage your business.
Create a business plan.
If you think that a small business doesn’t imply a business plan, you are wrong. Even starting in a small town, you can’t do without the right paperwork.
Develop a plan with calculations and prices for your locality, so that you know exactly how much money and time you need. If you run out of ideas check out Bplan.com to find a template or example that fits your business type. This way you will avoid the most common mistakes at the business plan creation stage.
Make it legal
This is a rather laborious process, so be patient and just do it. Each type of business has its own nuances in registering and has different licenses to obtain, so you need to build on a specific scenario. In addition, the state and even the town itself can affect the list of documents necessary. To understand the sequence, stages and cost of registration for your type of business and location, visit the License Suite and U.S. Small Business Administration websites.
Business plan implementation.
Once the registration procedure is over and done with, and you aren’t experiencing difficulties with capital investments, you can proceed with the implementation of the business plan:
- Choice of premises for rent or purchase
- Purchase of furniture and equipment
- Hiring staff, etc.
One small town benefit is that you don’t need to splurge on advertising. You can make do with minimal expenses, investing in a bright sign, and ads on billboards, and flyers. Cooperate with your business neighbors and create a special deal together. This will complement your efforts. And of course, don’t forget about the Internet and social media. We’ve already mentioned ways of social media promotion in the restaurant business so check this out for more information.
If you do everything right and people are happy with what you are doing, then the rest of the work will be done by word of mouth.
Fifteen best small business ideas for small towns in 2018
The most difficult thing in business isn’t starting, or amassing capital, as many start-up entrepreneurs erroneously believe.
In reality, it’s way harder to come up with an idea that will be easy and inexpensive to implement and will quickly start generating profits.
Let’s try to figure out what business ideas for a small town can be implemented and lead to success.
The restaurant business
Starting a cafe business is a very exciting and responsible process. People will always need a cool place where they can spend quality time with their buddies and have a delicious meal at the same time. Even if there are several cafes in your town, by opening a new and better one you will give the locals more diversity in choice of dining. Think how you might differ from already existing places; maybe you’ll make a bet on a themed design, ethnic cuisine or a location. Of course, the cafe concept will also depend on the people living in your town. As a rule, opening a cafe in a small town needs lower investment than if you are want to run a cafe business in, say, New York.
Sport always unites people. And this applies not just to the athletes but to those who root for their favorite teams on-screen. A sports bar is the place where sports fans gather to watch matches, cheer together, and chat with like-minded people. Pay attention to the smallest detail: The interior, the staff uniform, sports calendars, the possibility of viewing sports on a big screen, video game nights and so on. In a word, plunge into the sports world! You can also sell sports souvenirs and mascots. Or maybe you could offer a small gift to everyone who guesses the final score?
Ice cream cafe
Isn’t this a childhood dream? And did you know that Americans occupy a leading position in ice cream consumption globally? If you’re on the look-out, this is an excellent option for seasonal business. When summer comes, all that people can think about is how to cool down a bit. Handmade, unique and delicious ice creams inspire no less interest than craft beer. The wider the ice cream range, the better for you, because guests can choose what they like and will want to return. This could be the perfect place for families or sweethearts to stop by. And come on, who doesn’t adore the ice cream man?
The smell of a freshly baked pastry in the morning will make even the laziest person in the world get out of the bed and buy fresh bread with a crispy crust for breakfast. Bread is an important part of people’s lives, and some of us can’t imagine breakfast without tasty buns, croissants, and donuts. That is why opening a bakery is a very profitable option for small businesses. And if you can offer coffee, tea or soda as well, then you are thinking in the right direction.
A restaurant is a place for dinners and dates, discussions and business meetings. But what if there is absolutely no time to wait for an order, and all you want to do is to grab your food and get going? Mobile fast food on wheels is especially popular among office workers, students, tourists or just busy folk. A food truck is a fast food joint on a truck converted into a small kitchen with restaurant equipment. A distinctive feature of this business is the preparation of meals from semi-finished products, which reduces cooking durations several times over. In addition, to implement the business plan for a food truck doesn’t require impressive start-up capital.
We think no one will deny that beer has always been a symbol of pleasant times with friends. True beer fans often dream of buying a microbrewery to treat people with delicious beers made from original recipes. So, why not turn a hobby into a real business that will fetch a good income? Large companies, as a rule, create a product that is designed for a large population of consumers. The advantage of a small brewery is that it can afford to produce an exclusive product in small quantities.
Health is a topical issue for everyone and the need for medicines is always relevant. Because of environmental pollution and the high concentration of harmful substances in food, people are paying closer attention to their health. The average check at a pharmacy is wholly comparable with the average check at a supermarket. You don’t need much space to store medical supplies; as a result, rental costs for premises will be lower than any grocery or hardware store, or cafe. Sometimes medicine prices exceed the prices of other goods and services, so a pharmacy business is really quite profitable.
For many people, a domestic pet is a loyal friend or even a family member. Almost every family has a cat, dog, fish, parrot, chinchilla, turtle or other small creature. That is why opening a pet store in a small town can become a big deal. Don’t confuse it with a veterinary pharmacy, which requires training and a bunch of different licenses. Now we are talking about a store with pet products, such as treats, leads, collars, etc. This business idea is simple in implementation and always in demand among locals.
This is a type of business that is relevant all year round. Like a pharmacy, a grocery store is a pretty stable and reliable niche. But unlike a drug store, this business requires lower costs and the smallest number of licenses and permits. If you decide to open a grocery store from scratch, the first thing you need to do is decide on the concept. There are many options: A small supermarket, a shop in a residential district, or a specialized market (meat, fish, dairy, eco-products, etc). Today, shops that have a specific approach are considered the most profitable: They occupy less space and compete more effectively with developed networks due to their wider range. However, if you can’t stop thinking about the allure of large chains, then you could consider starting a franchise business.
It’s hard to imagine a wedding, birthday, fair or a romantic date without flowers. To run a successful flower business it is not necessary to open a huge garden center or a luxury flower boutique (although it depends on the audience you are targeting). A flower shop does not require huge investments to start up, and it has a significant margin that can reach 200–300%. There are also drawbacks in this business: Seasonal sales, perishable goods, and the possibility of damage during transportation. You can cooperate with suppliers or grow the flowers yourself, thereby expanding the boundaries of your business.
Auto repair garage
The number of automobiles in urban environments is growing rapidly every year, so the business of providing auto repair services is very promising. This will especially suit people who are passionate about automobiles and can turn a hobby into a profitable business with a stable income. As a rule, people trust the repair of their cars only to a master mechanic, and only visit a proven auto repair shop. So if among the locals you are well known as a handyman you won’t lack clients. Therefore, regular customers will help your business keep profits high and stable.
Beauty salons with pink neon signs, beautiful accessories, and relaxing music have become a significant part of the modern woman’s life. Despite the fact that men today pay more attention to self-care, they don’t always feel comfortable surrounded by all these things. That’s why over the last couple of years barbershops have gained hugely in popularity. They offer old-school procedures with classic techniques (for example, old-style razor shaving) and invite guests to become a part of the tradition. Sounds good, right? Well, we’re pretty sure that the barbershop adds zest to every small town.
Mobile car wash
Car wash and dry cleaning is a great option for a small business to open in a small town. One of the benefits of running this kind of business is its compactness: The car wash can be placed in the body of a medium-duty truck and consists of a wide tent and a set of the necessary equipment. Such contractions are very reliable not just for townspeople but for vehicle fleet owners who need combined washing of cars and buses. To increase profitability, you can provide additional services: Polishing, dry cleaning, bug-off, tire scrub, etc. For bigger profits, you can also offer a carpet and furniture cleaning service.
Repairing computers and smartphones
Unlike capitals and large cities, where you’ll find a gadget repair service on every corner, small towns can’t boast of having an abundance in this area. In most cases, people have no idea where to have their gadgets repaired after the expiration of the warranty. The stores where the gadget was purchased usually recommend using it for spare parts and buying a new one. Therefore, if there is a lack of service centers in your town and you are well-versed in the technology or know people who can perform this work perfectly, then think about opening this kind business. We’re sure the locals will be really happy about it.
More and more people prefer to buy food from eco-farms rather than supermarkets. The agricultural business is quite profitable, but, at the same time, requires large investments. Therefore, before opening a farm from scratch, you need to familiarize yourself with all the intricacies of this business and understand what will be relevant to your startup and specifically to your town. It could be vegetables, fruit, dairy products, etc. Each industry is profitable in its own way, so you need to decide which kind meets your expectations.
Small towns have a certain specificity, which affects the conditions for starting your own business. Not every idea can be successfully implemented. When choosing the best business to start in a small town, consider the economy, the living conditions and mentality. The main thing is to find an empty niche and make every effort to succeed in it.