Before starting a small business, it is important to understand how your location can impact your success. A business that can find success in a big city with a large, diverse population might not be practical for small town business ideas and vice versa.
Although being based in a city might feel like the obvious choice to maximize profits, the truth is that small town populations have specific needs that are often being unmet, leaving lucrative opportunities available for business owners.
Whether you prefer the laid-back country lifestyle, want to raise your kids outside a metropolis, or simply want to help improve your community, there are plenty of reasons to start a business in a small town.
Doing Your Research
The most effective way to find profitable small town business ideas is to do a little research. If you have a particular town in mind, you can focus on targeted research that seeks to answer what one specific community needs and could benefit from.
Finding Service Gaps
A good idea is not enough to get a successful business off the ground. With small, tight-knit communities, if there is already a business providing the same services as yours, such as house cleaning or pet grooming, you might be unable to compete against a loyal customer base.
Instead, your best bet is to identify services that are in demand but are not being satisfied by current businesses.
Know Your Competitors
Be aware of which other businesses are already operating in your chosen town. Ask yourself what these businesses are not doing—are there relevant services they do not provide? Is their business keeping up consumer trends? For example, if it is a restaurant, do they offer delivery services?
You should also be aware of the prices that these businesses charge, how accessible and available they are throughout the year, and what their relationships with their customers are like.
What Do You Need?
Depending on what kind of business you are pursuing, the needs you have to fulfill will vary. The qualifications needed to start a business are different across various industries, but permits, licenses, training, and education requirements might be necessary going forward.
Perhaps even more importantly, however, are the specific skills and attributes needed to succeed as a business owner. These core leadership traits include:
- Effective communication skills
- The ability to collaborate and delegate
- Great time management
- A desire to learn and improve
- A positive attitude
Of course, you will also need to look into funding opportunities to get your small business idea off the ground. No amount of leadership traits alone is enough to capitalize on a successful idea. Rather, startup financial and human capital are both necessary ingredients.
Best Business Ideas for Small Towns
Below are some of the best business ideas for small towns according to current market trends and barriers to entry.
Home Cleaning Services
Successful small town businesses do not necessarily need to shoulder huge operational costs. With home cleaning services, you could easily start your business without renting out office spaces or other facilities. If hiring employees is not attainable at this point in your entrepreneurial career, it is possible to make a solid living on your own as well.
After all, cleaning businesses are no small matter: market research suggests that the cleaning industry will likely reach an impressive $74 million by 2022.
Pet Store & Pet Grooming
Pets make more than just furry friends. They also present several business ideas for small towns. For example, veterinary services are always in high demand, although creating a vet clinic involves lots of education, a well-trained staff, and possibly prohibitive costs. However, vet fees are far from the only expense that owners are willing to shell out for their pet.
Recent market surveys suggest the average American dog owner will spend approximately $120 monthly on pet-related expenses. With the right business, this money could be lining your own pockets. Common pet businesses include:
- Pet stores (which may sell pets or just toys, food, and other relevant products)
- Grooming services
- Dog training services
One of the strongest small town business ideas is a liquor store. Liquor has always been a very lucrative industry, with alcohol constituting 16% of all beverage purchases, and yet the industry still sees steady annual growth.
Just be aware that operating a business that sells alcohol has different licensing requirements among states.
The second-hand retail market is set to be worth an astonishing $41 billion by 2022, with about 10% of all purchases being used goods. Additionally, thrift stores can lower overhead costs for owners, with most thrift store models depending on donations as a source of goods.
Although some stores do pay for goods from their former owners, this compensation is often much lower than purchasing new products from factories or wholesalers.
However, the benefits of thrift stores often expand to the community. On top of having a noted environmental upside, second-hand goods can offer low-income and vulnerable customers the opportunity to purchase clothing, furniture, housewares, and school supplies for affordable prices. Also, thrift stores present even more opportunities to create long-lasting connections within the local community.
Information technology may not initially seem like the best business to start in small town, but in an age of data breaches, everyone needs IT professionals. In 2018, American spending on IT services exceeded $900 million, proving that IT is an essential investment in the digital age.
If you choose to target your IT business to small towns your customer base could include local governments, school boards, colleges and vocational schools, hospitals and clinics, other small businesses and even individuals. Additionally, an IT service provider would be able to secure clients outside the town in which the business is based.
Car repair services are great small business ideas for small towns because rural populations are more dependent on personal vehicles than in cities.
People living in cities have access to more expensive and convenient public transit, so car-free households in America are most common in urban areas. This means that, if working in the auto industry is something you aspire to, it is a perfect business to start in small town.
The best business to open in a small town is one where you can rely on your skills, education, and background to get ahead. If working in beauty and hair care is in your background, you might be interested in starting your own hairdressing business or beauty salon in a small town.
Some hairdressers choose to open their salon, whereas others will work from their homes or out of an existing salon. Likewise, some businesses will offer a wider range of beauty services, such as waxing or make-up for special events, whereas others will focus solely on hair. Hairdressers cater to customers of every age, income level, and gender, making it a business that every small town could benefit from having.
Small town businesses that thrive are ones that offer services that people need—like laundry services. Overall, millions of Americans depend on laundromats as they do not have access to washers and dryers in their own home, generating nearly $5 billion every year in gross revenue.
If your town does not currently have a coin laundromat, you can rest assured that there is a customer base waiting for you to start a business that meets their needs.
Restaurants have always been reliable, profitable businesses for small towns. From bakeries and coffee shops to fine dining, restaurants can be great businesses for creating personal relationships with customers and developing a base of loyal and regular diners. In 2017, the restaurant industry generated close to $800 million, with customers from all walks of life.
Whether you want to focus on specific demographics like millennials or families or wish to integrate your own culture into small town life through ethnic cuisine, starting a restaurant is a great small business idea no matter where you are in the world.
However, when starting a restaurant in a small town, it is wise to steer clear of short-term trends or cuisine that your town may already be saturated with (such as pizzerias or breakfast diners).
Finding What Works for You
Ultimately, there is an endless number of small town business ideas that present an exciting opportunity to make money and improve communities. That is why it’s so important to consider your own goals, skills, and background when considering what you can bring to a small town.
Whether you want to turn your love of animals into a successful pet store or use your culinary skills to start a restaurant, there is no limit to the potential your small town business could have.