The U.S. Department of Agriculture stated that in 2020, roughly 46 million people, or 14% of the U.S. population, resided in rural areas. Entrepreneurs in these areas face challenges that those in robust cities don’t. Rural entrepreneurship places aspiring entrepreneurs in a difficult situation, but with the right idea and proper execution business ventures can succeed even in a small town.
What does rural entrepreneurship mean?
Rural entrepreneurship is best defined by an entrepreneurial path taken in a rural area to start a business (or side hustle). Similarly, this term can also be defined as entrepreneurship brought to a rural area from elsewhere.
This form of entrepreneurship focuses on creating and growing businesses in smaller areas such as small towns, remote areas, or villages rather than metropolitan areas such as large cities.
Opportunities as a rural entrepreneur
So why actually start a business if you reside in a rural area? With the right mindset, entrepreneurs with tenacity can succeed anywhere. Let’s look at some benefits you may enjoy as a rural entrepreneur.
- Higher profit margin (56% in rural areas compared to 53% in urban areas)
- Lower business costs
- Lower cost of living
- Strong sense of community
- Lower competition
There are various opportunities for rural entrepreneurs to engage. Below are a few that aspiring individuals can utilize.
1. Online businesses and remote work
Your business does not have to only pertain to your physical setting. With the emergence of the Internet, people, and businesses, are migrating towards the virtual world. It offers a chance to establish a thriving business online without any discrimination towards geographical location.
One profitable example of an online business you can start in a rural setting is one geared towards utilizing the area’s natural resources, such as its products or traditions. Aligning your business’s niche with local cultural elements can give you a distinct advantage in the market.
The Internet also allows entrepreneurs to utilize cost-effective marketing strategies, primarily social media. Social media lets businesses market in a creative fashion and center their marketing efforts towards their target audience. Additionally, businesses can utilize SEO practices to make sure that their website or social media accounts have more visibility to potential customers.
2. Providing tech services for rural needs
Rural residents have been found to be less likely to own current technology compared to their urban counterparts. This could be a situation that you could use as a potential entrepreneurial initiative.
This may involve providing essential technological infrastructure such as reliable internet connectivity or establishing local Wi-Fi networks. Additionally, you may even sell up-to-date technologies that are not readily available in the area.
3. Eco-tourism
Rural areas often have natural beauty and sustainable tourist attractions that are not often found in urban areas. This can be utilized to offer eco-tourism services, or where the business is centered around area’s environment, cultural heritage, and landmarks.
Challenges as a rural entrepreneur
In addition to enjoying unique benefits, there are also numerous challenges that rural entrepreneurs face compared to their urban counterparts.
1. Lack of broadband internet
This one is the most obvious, and unfortunately the most prevalent. You have probably found yourself struggling to get a connection in a rural area. Rural areas are faced with a severe lack of broadband internet.
Approximately 22% of rural residents lack access to standard broadband internet (1.5% urban areas). This can severely hinder a business’s growth, or prevent entirely.
2. Limited access to markets
Urban entrepreneurs often have firsthand access to large customer bases and distribution networks. Rural entrepreneurs do not have this privilege and usually have to cater to smaller, more dispersed customer bases.
Transportation and logistics can become challenges for entrepreneurs in rural areas, and can result in costly endeavors.
3. Funding constraints
One of the urgent priorities for any business startup is funding. Funding constraints pose a serious threat to the growth of any business. Unlike urban areas, where capital is readily available and can be found in abundance, rural areas are often met with a scarcity of financial resources.
Traditional investment groups, such as venture companies and angel investors, may be hesitant to invest in rural businesses due to higher perceived risks and smaller market size.
While resources do exist to offer funding to rural businesses, it can often be a tricky and difficult process.
4. Lack of infrastructure
As we discussed before, there is a severe lack of broadband internet, but it doesn’t stop there.
Compared to urban areas, which often boast advanced transportation, accessible utilities, and easy communication, rural areas often find themselves having significant gaps in these areas.
One common problem in rural areas is unreliable transportation. This includes roads, highways, and other modes of transportation that may be limited. This can be problematic in various situations, such as entrepreneurs selling perishables or those struggling to ship goods in a timely manner.
5. Population decline
The rural population continues to decline. It is a pressing issue that often deterring rural residents from starting a business, and may even lead to them leaving in search of economic opportunities.
Fewer residents means a smaller market, which means less customers to buy products. Additionally, there may be a smaller pool of workers to contribute to the local labor force.
Rural entrepreneurs who aspire to start and grow a business should not be deterred by potential challenges they may encounter. There are opportunities everywhere, it’s just about how you interact with and execute them. It may not be an easy path, but the potential success is well worth it.
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