Rural businesses play a vital role in the U.S. economy, contributing significantly to their communities and local economies. In fact, small businesses account for more than half of all jobs in rural areas. However, running a small business in a rural location presents its own set of challenges, such as limited resources, smaller customer bases, and geographic isolation. Here are several strategies that can help rural small business owners thrive:
1. Lean on Your Local Support Network
In rural communities, personal relationships and local networks are critical to success. With fewer people and resources available, it’s important to leverage your local support system. Organizations like Small Business Development Centers (SBDCs) and SCORE mentors can provide valuable guidance, mentorship, and resources to help you navigate the complexities of rural business ownership. Whether you need feedback on your business plan or advice on marketing strategies, these resources are designed to offer tailored support to small businesses in rural areas.
2. Expand with an SBA Loan
Access to financing can be a challenge in rural areas, but the SBA (Small Business Administration) offers tailored loan programs for small business owners who may not qualify for traditional bank loans. The 7(a) loan program, SBA’s largest financing program, can be used to buy real estate, inventory, or equipment. Similarly, 504 Certified Development Company (CDC) loans offer fixed-rate financing for major fixed assets like real estate or machinery. These loans can provide rural business owners with the capital needed to expand operations, purchase equipment, or acquire additional land.
3. Explore Opportunities Abroad
Rural businesses are vital to local communities, but geographic limitations can make it difficult to attract new customers or drive foot traffic. Exporting provides a powerful solution by enabling rural businesses to tap into global markets. Through U.S. Export Assistance Centers, rural small business owners can learn about the exporting process and how to diversify their sales channels. Connecting with an Export Finance Manager in your area is a great way to get personalized guidance and advice on exporting.
4. Sell to the Largest Customer in the World
The U.S. government is the largest buyer of goods and services in the world, and they prioritize buying from small businesses. Through federal contracting programs, rural businesses can access lucrative opportunities to sell directly to the government. One notable program is HUBZone, which gives businesses in historically underutilized business zones access to federal contracts. These initiatives provide rural small businesses with a unique chance to grow by supplying goods or services to government agencies.
5. Tap into America’s Seed Fund
For rural businesses focused on innovation and research, the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs offer critical funding opportunities. These programs, known as America’s Seed Fund, provide over $4 billion annually to small businesses and startups engaged in cutting-edge research and development. By participating in these programs, rural entrepreneurs can access early-stage capital to bring new technologies or ideas to market.
Conclusion
Rural small business owners face unique challenges but can also tap into a range of resources designed to support their growth. Whether it’s securing financing through SBA loans, exploring export opportunities, accessing government contracts, or tapping into funding for innovation, there are numerous pathways to success. By leveraging these resources, rural entrepreneurs can strengthen their businesses and make a lasting impact on their communities.
For more information on how the SBA supports rural businesses, visit sba.gov/rural.
