Small Business Ideas for Small Towns and Rural Areas

What do you need to start a business? Three simple things:

  • Know your product better than anyone.
  • Know your customers.
  • Have a burning desire to succeed.


Starting up a business in small towns and rural areas, growing that business to make it workable and profitable, has been the thoroughly discussed and debated topic throughout the last decade. It seems hard and very difficult and takes a lot of time and effort. However, starting a new business in small towns and rural areas can have the bundle of opportunities as a big city seems to have. 

It is beneficial to start a business in small towns and rural areas for the reason that there are a smaller number of protocols and paperwork involved. Moreover, there are opportunities with least competition, so chances of success are fairly greater than that of starting up in a big city.

In the present situation, small towns and rural areas are rushing ahead as centers of business activities, giving a good fight to big cities but still there is a challenge in determining which business will generate the highest return on investment.

John Cougar in a study said “Small town entrepreneurs benefit from a lower cost of living and less competition, but they may suffer from a limited customer and employee base.” 

So when you have decided to start a business in small towns and rural areas, you may find yourself overwhelmed with the series of questions like:

  • Which type of business is good to start in a small town or rural area?
  • What are the factors to consider while starting a business in a small town or a rural area?
  • Which business is more profitable in a rural area?
  • What does every small town need?
  • Which business will always be in demand?
  • What is the success rate of succeeding in a startup?
  • Which industry has the highest success rate?
  • Which industry has the highest failure rate?

If you are struggling in narrowing your list down to a single successful business idea, you don’t need to worry. Consider these factors to narrow down the best idea for you;

Factors to Consider When Starting a Business in Small Towns and Rural Areas

  • How many facilities does the small town offer to business owners? Are there any taxes or other financial relaxations to start a business in that area? 
  • How close is the town to larger cities? If your chosen town is within driving distance of a larger city, you might enjoy lower cost living with easy contact with consumers and the workforce.
  • What does the local workforce look like? How well  their work abilities match your needs? 
  • Is there any college/university near that can provide you with an educated workforce? To fulfill the need of a workforce for your business with expert skills. 
  • How much money will your business require? If financing is a big concern for you, understanding market tendencies and statistical data will be helpful for you.

Are you investigating the best business idea that will generate good profit in small towns and rural areas? This article will surely help you to come up with the best one. 

List of Low Cost Business Ideas for Small Towns & Rural Areas

Here goes the list;

1- Tutoring Service/ Tuition Center

As everyone knows the internet is loaded with bundles of online tutoring services but nothing can ever substitute the benefits of having an in- person teacher. Though, you can start on a small scale and can also operate as a sole tutor, starting as a tuition center can be more profitable. 

Tutoring can also be a great part time business in evening hours if you are already employed elsewhere, and of course can be a full time business as you can find high paying online teaching jobs as well whereby you may teach people anywhere around the world.

2- Small Scale Vegetable Farm

If access to healthy organic food, fresh fruits and vegetables is limited in your area, make your land useful even if you own a small piece of it. Produce healthy, organic, home grown fresh vegetables and fruits and sell them to make fresh money. 

You can not only sell within your local market, but also approach nearby cities and with a better transportation and storage facility you can even sell across your state or in other states. “According to Health and Wellness Food Market research, the global sale of healthy organic food is projected to increase to 811.82 U.S billion dollars by 2021”

3- Budget Clothing Store

Clothing is a basic item that is required by every human being. Clothing boutiques are very limited in small towns and rural areas therefore its demand is quite high in these areas, making it a profitable business. 

People won’t have to travel distances just for basic clothing necessities. Open a small scale clothing boutique that provides quality products with affordable prices. You can either sell your own designs, or some popular designer wear or may even consider selling high end used clothes for affordable prices.

4- Grocery Store

It is the most practical business recommendation and one that your whole town is assured to need. You can take many directions to make this business in; your town already has grocery stores so giving them competition is not a bad idea. 

However opening a grocery store requires capital investment to start but the rest you can take on credit from retailers.

5- Bakery

From your morning coffee to your kid’s birthday cakes, everyone wants to eat fresh items so bakeries can fulfill a large number of small towns and rural area’s needs. Though starting a bakery business in these areas is hard work, this business can be profitable if you know the skill and are determined to grow your expertise into a profitable business. 

6- Hair or Beauty Salon

This business works regardless of age. Men tend to get their hair cut at least once a month and women always want to enhance their beauty. You can offer a variety of additional services that go far beyond haircuts, i.e. manicure/pedicure, facials, and even sell some personal grooming products within your salon. 

You must have a sense of styling and experience in hair cutting to make a great salon business. However, Gents’ salons work more successfully in small towns as compared to ladies’ hair salons.

7- Mobile Phone & Electronics Repair Shop

The age of technological advancement determined a huge popularity and demand for mobile phones and gadgets. Most of the people in small towns tend to try the repair option instead of buying a new handset or an electronic appliance, so this business also can be a profitable one. Before you begin consider:

  • Who is your target market?
  • Who will be your supplier?
  • How will you market your business?

8- Guest House/ Bed & Breakfast

This might not be a great idea for all small towns and rural areas, but if your town has some natural beauty and sightseeing opportunities, it can be a great way to promote tourism in your area and create more opportunities.

Opening a small inn or bed & breakfast in small towns and rural areas can become a huge success if you have enough investment to develop some leisure opportunities, i.e. a farmhouse, an exotic staycation facility, etc. and market it to the adventure lovers, photography entrepreneurs and people who love to travel to new places on a budget.

To get started you may want to target the small town or rural area with tourist spots where hotels and guest houses don’t exist or are expensive, set up a guest house, provide standard living and make it a money machine.

9- Pick & Drop Service

Finding proper transport to travel in small towns and rural areas is a huge problem because public transport doesn’t work door to door and could be time taking so if you have a driving license and own a car/van,  turn your asset into a running business. 

Offer quality service at affordable fares and set shifts like early morning, late morning, afternoon, evening to make more money. Starting with your personal vehicle can give you a fair idea about the opportunity and saturation in the market, and as per your findings you may want to lease a couple of more vehicles to develop a fleet of your transportation business that serves not only in your town but also to the neighboring towns.

10-  Poultry Business

The person who has interest in poultry production can get good opportunities from the poultry business because people in small towns and rural areas don’t want to travel miles to bring eggs and chicken. They prefer buying poultry products locally. 

Moreover, with better connections, proper storage facility and effective outreach plan you can expand your sales to the neighboring towns as well as in the big cities. 

This business requires a good initial investment on your part and can give you quick and regular returns if you further your outreach and connect with restaurants and food junctions in your area and in the big cities.

11-Dairy business:

In small towns and rural areas more than 50% of the population is directly involved in dairy farming. There is a huge demand for milk and milk products in both small and big cities. So if you live in a small town or rural area, you might want to build your own dairy farm and sell your products locally as well as in the neighboring towns and cities.

If keeping animals is not your thing, you may want to become a middleman who collects products from local farmers and sells them outside the town. Another way can be setting up your own dairy brand that processes the local collections and sells them in the urban market.

12- Restaurant

Restaurants are a great business in small towns if you planned properly for requirements, structure and strategic location. Your restaurant should be located in an area where more activities take place because the higher the human movement, the more likely the restaurant will see increased support from customers.

13- Tailoring / Stitching

If you enjoy sewing and designing clothes, then starting a tailoring/ stitching can be a profitable business. Even in small towns and big cities ladies’ tailors are more popular, can give a good return on your efforts and also there is no need for a huge investment in this field.

You can also contact popular fashion brands or designers in the big cities and take orders from them. Another way to develop your tailoring business can be starting your own designer wear and selling these designs in the big cities through established retail outlets.

14- Niche Blogging

In a world of technological advancement and reliable internet access, you can write about your expertise and publish it online by making your own blog even living in small towns and rural areas. 

The great thing about blogging is that it doesn’t have boundaries and you can do it from anywhere around the world as long as you have a good internet connection and you know your niche.

The more the people will follow your blog the more the money will pour in. All you need to have is good internet connection, a computer and great content creation skills.

15- Pets Business

Pet business is a $60 billion industry in the U.S and shows no signs of slowing down because there are 80 million households in the U.S with at-least one pet.

Pet parents want the best for their pets; let it be the food and treats, toys, clothing or other accessories. Being a rural entrepreneur you have an advantage to create the best quality pet products at a lower cost and sell them directly to the pet owners (as a monthly or weekly subscription box) or get connected with a retail store to display and sell your products.

It is a perfect business idea for rural entrepreneurs, as most pet parents are concerned about the quality of products and being in a small town your cost of production can be really lower. 

The Bottom Line

Regardless of the present scenario that small towns and rural areas are serving as hubs in business activities: proper planning, research, and calculating the amount of capital investment is essential to the success of the business. 

Your business is more visible in a small town than in a larger community, so any mistake you make will be exaggerated and can be harder to correct. Put all your effort, heart, energy, passion and interest in your startup to succeed and make sure to choose the one which brings both profit and joy for you in the future. 

You may also like...