With the right resources, small businesses thrive in America’s heartland.
WASHINGTON, July 6, 2023 /PRNewswire/ — Rural small businesses face a unique set of challenges, but they also have advantages over their urban and suburban counterparts, such as a tendency to be more profitable.
The owners of Four Hills Farm in Versailles, Kentucky sought help from SCORE as they struggled with growing their business.
Entrepreneurial Benefits of a Rural Environment
Rural businesses tend to operate at a higher margin of profitability than urban businesses (56% to 53% on average), and their revenues are generally comparable to those of urban businesses, according to a meta-analysis by SCORE, mentors to America’s small businesses. This means that rural entrepreneurs keep more of their business income and are then able to provide a better quality of life for themselves and their families.
Thanks to the rise of remote work and technology, entrepreneurs who grew up in rural areas no longer need to move to a major metropolis to build successful, scalable businesses. Rural areas also tend to have lower business operating costs as well as a lower cost of living than urban and suburban areas.
The entrepreneurial challenges of a rural environment
Despite considerable potential, rural entrepreneurs continue to face significant obstacles. These challenges mainly lie in three areas:
1. Access to capital
Cash flow is a headache for rural businesses. According to SCORE Main Street Megaphone Data Report, rural entrepreneurs are more likely than non-rural entrepreneurs to say they are impacted by higher operating costs (i.e. rent, utilities, gas), as well as financing expenses higher (i.e. higher interest rates, borrowing costs). Two thirds of all small businesses need external financing while three quarters struggle to access it. For those in rural areas, the scarcity of local bank branches can pose an additional barrier.
2. Access to work
Rural areas are generally not teeming with a wide range of industries, and this lack of business diversity limits the economic opportunities available to entry-level workers. With the population declining in rural America, rural entrepreneurs (45.3%) are significantly more likely than non-rural entrepreneurs (25.5%) to say that demographic trends are impacting their business. In fact, more than a third of rural entrepreneurs (35.9%) say there are few skilled workers in their area.
3. Access to connectivity
Although telecommunications companies have made great strides over the years to improve broadband access for rural communities, a technology gap remains between rural and non-rural companies. Rural entrepreneurs (19.2%) are twice as likely as non-rural entrepreneurs (9%) to cite broadband/high-speed Internet access as a technology challenge.
Limited access to high-speed internet poses a significant challenge for rural small businesses. Not only does stable connectivity lead to growth, it also helps businesses recruit and retain top talent, maintain stable supply chains, and promote goods and services.
Get the support you need with SCORE
To address and overcome these challenges, SCORE provides rural small business owners with free mentoring, as well as personalized online and on-demand tools and resources in its hub for rural entrepreneurs. SCORE monks mentor Don Frazer explains, “In today’s competitive world, you need to have an organized plan to succeed. SCORE volunteer mentors are willing and able to provide guidance in a variety of areas. When it comes to rural businesses, Frazer recommends using local resources: “get involved in your community.”
There are many rewards of operating a small business in a rural community, but they do not come without challenges. “When you’re farming, which is a 24/7 job, there’s a lot to keep track of, and we needed someone to help us with the numbers,” said a customer from SCORE. Jim Mansfieldco-owner of Four Hills Farm in Versailles, Ky. “SCORE can help you a lot.”
Whether your business is rural, suburban, urban or online, SCORE mentors are available to provide guidance and support. Request a mentor today at www.score.org/find-mentor.
About SCORE:
Since 1964, SCORE has helped more than 11 million entrepreneurs successfully start, grow or exit their businesses. SCORE’s 10,000 volunteers provide free expert mentoring, resources and education in all 50 U.S. states and territories. Visit SCORE on www.score.org.
Funded (in part) through a cooperative agreement with the U.S. Small Business Administration.
CONTACT:
SCORE
202-968-6428
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Visit SCORE Media Resources to be connected to sources of interviews with small business experts and news updates.
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