By Fernando Berrocal
Many people are unaware that, as of 2022, rural areas make up around 97% of the America’s total land area. Even though this region takes up much of the country's territory, just around 46 million U.S. Americans presently reside in these rural areas. Furthermore, roughly 20% of Americans make up that number.
Clearly, given the large portion of American land is technically rural, the concentration of individuals who might pursue entrepreneurship in a rural location is very low. This does not mean, however, that entrepreneurship is entirely absent in these areas. You should be aware that compared to urban locations, rural communities have a higher proportion of self-employed residents.
Rural entrepreneurship refers to businesses that are started in rural areas and urban/suburban companies that come to a rural environment for incubation purposes.
The ecosystem of thriving rural startups and small businesses is filled with many visionaries, investment in internet connectivity, land space, and online learning possibilities. Rural entrepreneurship is crucial to the expansion of the economy. In the past, a large employer helping a small town's economy was viewed as a blessing; today, that kind of recruitment is less desired. For many communities around the nation, meaningful growth fueled by rural entrepreneurship and innovation has taken center stage. Many communities stand to benefit significantly from the contributions of new rural small businesses towards increasing jobs and production.
Why do rural entrepreneurs choose to launch their businesses? Maybe you live in a rural location in the U.S. and are seeking reduced beginning costs, access to talent, or knowledge in a certain field (for instance, pertaining to a specific rural industry, such as agriculture). Entrepreneurs can prosper everywhere; perseverance is the key.
Rural entrepreneurship has its own unique set of fantastic advantages. Around 80% of rural small business owners think that these locations have a far higher quality of life and lower costs compared to living a traditional urban lifestyle in the city. The average profitability margin for rural organizations is greater than that of urban businesses (56% to 53%), and their average revenue is similar to that of urban businesses. As a result, rural business owners can maintain a larger portion of their profits–while also enhancing the quality of life for themselves and their families.
Rural business owners deal with a variety of difficulties. They tend to face several well-known obstacles along the way. One prevalent challenge is the pursuit of necessary resources, such as financing, business talent (employees), and the networking connections necessary to launch a small business. Dedicated economic development organizations are making progress against these particular obstacles, but there is still a long road ahead in the coming years.
The Geographic Talent Pool
Who are the people looking to relocate from an urban or suburban area to a rural area? There are a multitude of campaigns being run by rural communities around the country to entice skilled workers to relocate to their region. Although it's a good solution, keep in mind that all types of people may contribute to the growth of innovative communities. We are aware that inventive communities' propensity for entrepreneurship, as well as their vibrancy and growth, may be fostered and even exploited to draw the kind of talent required to work on an entrepreneurial project. Another issue in some remote areas is workforce access. Even though people are looking for a job, the area's low population makes it difficult to find skilled workers with the appropriate educational background.
Finding the Necessary Financing
Access to funding is a well-known issue for business owners in rural areas across the nation. The majority of rural business owners end up resorting to the use of their own funds; 40% of such founders face chronic issues gaining access to capital. Yes, resources do exist–but navigating them during a period of economic difficulty tends to augment the challenge. Business loans can be obtained from local banks and other financial institutions, grants are available from the federal and state governments, and an increasing number of funds dedicated to rural innovation are now accessible to support rural growth. Regardless, obtaining funding is still pretty difficult in this part of the country–especially in comparison with urban communities.
Availability of Connection
There are two types of connectivity. Firstly, there is digital connectivity. An instance of digital connectivity is the World Wide Web. Then, there is physical connectivity; a good example is a measure of how hard it is to physically travel to a given community. Fortunately for these entrepreneurs, there are services available to assist remote small businesses in maximizing their connectivity–and advocating for the inclusion of remote communities into the larger startup and business ecosystems. If you’re a rural founder facing this issue, your neighborhood SmartZone might be a promising resource to investigate. It identifies a specific geographic area where tech-based startups, entrepreneurs, and other small businesses can find resources in the local community. This is a great way for rural enterprises to seek out the funds, connections, and supplies they require to sustain and expand operations.
While there are numerous obstacles facing rural business owners, there are also various ways to overcome them. With commitment and a lot of inventiveness, small, rual companies can expand alongside other types of businesses as resources of all kinds and sizes continue to increase.