Why Rural Areas Are Good Locations for a Startup


Entrepreneurs love to see their business ideas succeed. One measure of success is the number of consumers who would support their trade. This is the reason why most business owners choose urban areas as their location. They feel that they have a higher chance to get noticed in a place with greater foot traffic.

One downside of being in a heavily commercialized location is the high competition. Even if there are many consumers, would your marketing techniques catch their attention? In this regard, entrepreneurs could consider an area that is not as saturated- the rural area. Here are some reasons why the rural area might be the better option for your business.

More Accessible Financing

One of the greatest hurdles a startup has to go through is to gather enough capital. In urban areas, lenders and investors may need more documents and other requirements. Business owners need to meet more standards to qualify for a business loan.

Rural areas may have the upper hand when it comes to procuring capital. The government and some agencies provide financing for business owners in rural areas. A famous option is the USDA Business Loan. This loan, along with USDA home loan programs, is exclusive for those in the countryside. The Department of Agriculture helps business owners and homeowners to establish their roots. Inviting entrepreneurs and residents in the rural areas helps boost the local economy.

Other loan options include SBA loan programs and Farm loan programs. The thrust of all these loan programs is the same. They want entrepreneurs in rural areas to grow their businesses. Another boon of such aids are they come with low-interest rates and with long loan terms.

Lesser Competition

The beauty of establishing a business in a rural area is the possibility of being the first of its kind. Because there is a smaller population, there are also fewer businesses in the area. You would enjoy the distinction of pioneering a business idea. Also, you do not need to worry if there are already businesses like yours in the area. Even with their existence, you still have less competition compared to the urban areas.

The key is for you to find a unique business idea that answers a need of the people in the area. Look for something that would appeal to them yet you would not find it hard to execute. Testing the concept first and starting on a small scale are clever strategies. If there is a competitor around the area, you may observe how they conduct their trade.

Close-knit Communities

A business owner can take advantage of the connectedness of the community in rural areas. Introducing a business in such a community could translate to having loyal customers. You must understand, though, that getting their trust and loyalty, would take time. But, when you do, you would have customers who would be glad to refer you to everyone they know.

A small community would also help you to sift through the right employees for your business. You could ask around about a potential employee’s qualifications. Giving employment opportunities to the locals is a way to introduce your trade to the public.

woman using her laptop

Abundant Raw Material

One challenge that entrepreneurs in urban areas have is access to raw materials. Sometimes, they have to export from far places which translate to higher costs. Business owners in rural regions do not have to deal with this predicament. Rural regions are rich in raw supplies.

An entrepreneur finds it easy to think of a business where the needed materials are abundant in the area. For example, a business owner wants to establish a restaurant. Their menu could contain dishes that have ingredients available in the local area. If your region is rich in timber, you could consider a business in woodwork. Having raw materials at hand helps an entrepreneur save costs. It also attracts the local customers and the tourists. Consumers, in general, want fresh and locally sourced products.

Lower Overhead Costs

Rural regions have a lower cost of living compared to urban areas. Homeowners take this into account when moving to the countryside. These lower costs extend even to the local businesses in the area. Business owners have the advantage of paying lower utility bills and rental fees. Even taxes and insurance are more affordable in rural areas. As such, whatever savings one has in paying for overhead expenses translate as profit.

For people starting a business, urban areas may seem like the more profitable option. But looking closely, a business in the rural areas may prove to be also lucrative in the long run. There are strong points that are unique with businesses found in the rural regions. You have to analyze well which would work with the business idea you have in mind.

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