At first glance, the best way to start a business is by starting it in an urban area, full of customers. Most of the time, urban areas are the go-to places for young, up, and coming entrepreneurs. As good as it sounds, urban areas do have a considerable amount of foot traffic that can jet start your business.
The problem with urban areas, however, is that you’re not the only one who’s running a business there. Stiff competition can make the overwhelming number of customers virtually useless, as they go for more alternatives. As far as popular opinion goes, starting a business in a rural area is a gamble. But then again, any company you start has its risks, so basically it’s the same gamble.
What’s not to love about the rural community? The place is great, the people are friendly, and you’re closer to nature and its bounties. Indeed, living in a rural area has its benefits. Starting a business has even more benefits just waiting for you to grab and enjoy them.
A word of caution though: any business, regardless of where you start it is always going to be bumpy in the first few months or years of operations. It’s when you overcome these roadblocks that you become successful with your business.
Still not convinced of how a rural community can become profitable for a starting business? Here are some more benefits to get you in the know.
As mentioned earlier, rural areas tend to have a lesser population compared to urban areas. The difference in the population means that certain types of businesses aren’t that saturated in rural areas than urban areas.
For example, say you want to run a sushi restaurant in a rural area. Because of the population, you might be the only one who has that idea in that place. You’ll have virtually no competition, which makes your profit more straightforward. Since you’re the only sushi bar in town, residents will feel very good about your products and services because you’re the first of its kind.
With that said, before delving into rural areas for businesses, choose a product or service that you know will attract and favour the locals. Always remember that the local population is responsible for making or breaking your business. Getting locals to support your offerings means a huge, positive boost for your business since you’re the only one offering it to them.
When you start a business in a rural area, chances are you’ll expect to have lower overhead expenses. When you have lower costs, that means you’ll have more profit. You can also allocate funds to improve your products and services better. You can even use your finances for expansion purposes.
So what are overhead expenses, and how do they impact your business?
Overhead expenses refer to any cost that’s ongoing as long as a business is still running. Overhead expenses can be taxes, maintenance fees, utility bills for your operations, insurance, etc.
Overhead expenses in rural communities tend to be lower because of certain economic factors. Having lower expenses means more profit, which is the reason why it’s advantageous for small-time entrepreneurs to start operating in rural areas.
One of the essential factors in starting a business wherever you start it is capital. For you to get capital, you can go to banks or legitimate lenders for a small business loan. Most of the time, those who apply for business loans in urban areas often have a hard time getting approved because of certain restrictions within the city.
In rural areas, banks and lenders operate and use terms that are only applicable in their current place of operations. Since overhead costs are much cheaper, banks will allow you to get direct loans as lower expenses mean that they won’t have to rely on third parties for approval. These sources also have priorities that often support local businesses, making business loans for those who want to start in rural areas much easier.
Government agencies and other legitimate sources also offer special financing for people who start businesses that often align with the needs of a rural community. In some cases, businesses that have to do with food, retail, certain services, entertainment, etc. may be able to receive special grants from the government.
With a mortgage, you can certainly get it at more affordable rates in rural areas. A lot of factors can significantly influence the mortgage you can get on land within a rural community. For one, rural areas are often hard to sell because the access to getting to hospitals, recreation centers, shopping, etc. is often difficult. This makes it less appealing for most people.
Another thing to consider is that most rural areas have a lot going on within them. There’s climate, the neighbors, utility, etc. All these play a crucial role in mortgages being more affordable in rural areas than in urban areas.
Since you’re out in rural communities that are responsible for churning out raw materials, you won’t have a hard time getting these materials for your own business.
For example, living in a rural community near the sea can mean that the major way of living here is through fishing. If you’re a sushi restaurant, then you’ll get fish and other seafood at a lower price since you’re just a few miles away from the sea.
For those who sell products to large corporations and other businesses in the cities, having your base of operations in a rural area is ideal because it’s cheaper to get the products. Being in a rural area can significantly benefit agricultural businesses.
Low prices on materials and proximity to these materials mean that you’re shipping out high-quality products at an efficient cost, which is a win-win in any book.
Not all the best things are in urban areas. The rural communities also have a lot of advantages, especially when it comes to living and starting businesses.
There’s less competition, access to raw materials is easier and cheaper, you get incentives from the government, what else could you ask for? Indeed, being in rural areas isn’t just a refreshing way of life; it’s also a profitable one.
About the author
Tiffany Wagner enjoys writing about finance and business. She also enjoys sharing her insights on current world issues with her readers. As an aspiring accountant, Tiffany dreams of working for reputable companies and making an honest living. When not writing, Tiffany enjoys going to coffee shops and solving sudoku puzzles. Growing up in a rural community, Tiffany knows how important it is when you spend time with friends and family.