Living in a town with a small population presents a unique challenge to entrepreneurs. A narrow local market means the margin for error is greater than in centers of higher population. But a small town presents a great opportunity to form strong bonds with customers. The trick is to find out what business is suitable for the town.
3 Options for Acquiring a Business
Start a Brand New Business
Open a store or agency that has not existed in the town. There may be hurdles, such as educating residents as to how your company will enhance their lives, but if it is a “first”, there will probably be interest in your company.
Take Over an Existing Business
It may be the right time for a business owner to get out, which presents an opportunity to continue the business. The advantage of buying an existing presence is a shorter customer acquisition period. Residents are familiar with and comfortable with the company.
Introduce a Franchise
This option may meet resistance from residents who see a franchise as the death of a small town; however, a franchise presents a familiar image that can attract local patrons. One of the biggest hurdles for the franchisee is the upfront cost.
Prior to determining whether a new business is appropriate, there are several avenues to investigate in order to find a need that exists. Business brokers recommend that entrepreneurs do some research before introducing a new business to a small market. Research can be done by simply asking residents what kind of business they would like to see open locally. Examining other towns that are similar within the state is helpful in order to find out what has worked elsewhere. Another research technique would be to look at companies that operate in multiple small markets to see if that type of business would work in your town.
Identify Areas to Satisfy Market Need
Serving the Local Market
What opportunities exist to serve the local market? Are there products or services that are lacking a local business presence? There may be an opportunity to sell locally made products or global products that show a demand from townspeople.
Complementing Area Businesses
Are there offerings that would go along with existing businesses? For example, if a town has a significant number of farms, there may be a need for a store that sells produce, storage equipment or farm machinery. Or there may be a need for a reliable equipment repair operation.
Selling Local Products Elsewhere
If a local business provides desirable products, consider selling those products to larger markets.
Market to Tourists
towns that lie on travel corridors or are destination spots themselves provide opportunities to sell local products, such as town-related novelties or local specialties. If the town is a destination point, there may be a need for tour guides or taxi services.
Serve the Local Government
municipal governments have needs from janitorial services to computer repair to office supplies. Investigate the needs of the local government to determine if something is lacking or services are being delivered poorly.
Provide Expertise to Existing Businesses
Business owners often need assistance with accounting, taxes, facility cleaning and other services. Look for a common need and become the local expert. There will be opportunity as long as there are businesses that are operating.
Once the research into existing needs and opportunities is completed, strategy and planning are essential to ensuring that the grand opening is not followed by the resounding thud of an empty store. Finally, as with any business, money management is critical to making sure operations will continue if hard times hit the small town.
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