Rural entrepreneurs are the subject of SCORE’s latest study in its “Megaphone of Main Street” research series, which spotlights overlooked and undervalued small business communities. Although starting and growing a successful small business can be more difficult in rural America, it also can be more impactful. By creating jobs, stimulating innovation and nurturing productivity, small and locally-owned businesses can help rural towns and geographies prosper in ways that improve the physical, social and economic well-being of the people who live in them.
Key research findings include:
Part 1: Economic Anxiety Persists
- Small businesses have rebounded from COVID-19: Across both rural and non-rural locations, a third of small business owners (34.7%) say business has returned to pre-pandemic levels; another four in 10 (42.6%) say business is stronger than it was before the coronavirus pandemic.
- Rural entrepreneurs are uncertain: Despite their recovery, more than half of small businesses in rural communities (53.3%) feel somewhat or extremely negative about the economy and its effects.
- Finding customers keeps business owners up at night—and so does inflation: Getting customers is the number one challenge for all small business owners: 54.6% cited it as one of their top three business challenges right now. For rural small business owners, however, inflation and supply chain disruptions also loom large.
- Cash flow is a conundrum for rural businesses: Rural entrepreneurs are more likely than non-rural entrepreneurs to say they’re impacted by higher costs of doing business (i.e. rent, utilities, gas), as well as higher financing expenses (i.e. higher interest rates, costs to borrow).
- Outside financing is helpful but elusive: Among all small businesses, two-thirds need outside financing while three-quarters have trouble accessing it. For those in rural areas, scarcity of local bank branches can be an added barrier.
- Capital, debt relief and infrastructure are possible solutions: Rural and non-rural entrepreneurs agree that access to capital and loan forgiveness/debt relief programs would help them be more successful. Rural entrepreneurs, in particular, said infrastructure improvements also would be beneficial.
Part 2: Hungry for Talent and Technology
- Americans are on the move—and rural businesses are feeling it: With rural America losing population, rural entrepreneurs (45.3%) are significantly more likely than non-rural entrepreneurs (25.5%) to say that population trends impact their business.
- Rural businesses are hurting for workers: Population shifts create challenges for small rural employers, over a third of which (35.9%) say there are few qualified workers in their area.
- Rural entrepreneurs struggle with more expenses and fewer customers: Rising fuel costs (49.3%), slowing customer spending (48.6%), tight marketing budgets (47.6%) and a limited local customer base (34.6%) are their most vexing customer-related challenges, rural small businesses say.
- The technology gap between rural and non-rural businesses persists: Rural entrepreneurs (19.2%) are twice as likely as non-rural entrepreneurs (9%) to cite broadband/high-speed internet access as a technology challenge. Small businesses in both rural and non-rural areas, meanwhile, say they’re challenged by a lack of technology knowledge or assistance.
- Health insurance is a competitive advantage: Rural (35.3%) and non-rural (36.4%) entrepreneurs agree that better health care options would help them succeed, especially as they struggle to compete with larger employers for qualified talent.