There are various differences between businesses that operate in urban areas versus those in rural areas. If you’re considering starting a business in the countryside, knowing these differences is fundamental to its success and sustained growth.
Less Overheads, Higher Profits
Businesses in the city often have higher overheads due to rental expenses and utilities. While such businesses may see more patrons through their doors, their revenue may be more than that of their rural counterparts, but due to more overheads, their profit may be less.
Rural businesses don’t require large premises and can often be run by the owners themselves. They also don’t operate for extended hours, which reduces the need for overtime and keeps utility costs low because there is no need to put the lights on at night.
Money Stretches Further in the Countryside
While disposable income may be more in the cities, the cost of living is higher. You may need to take some form of transport to work, which is an expense that is not as high in the countryside because distances are shorter to travel; sometimes close enough to walk.
Basic items, such as bread, can vary in price. There are distribution costs to be considered for items sold in large cities, whereas a local bakery can supply bread to the local residents of a countryside town.
Better Likelihood of Financing
Depending on how long a business has been in operation will determine their commercial credit profile. Rural businesses have a high probability to qualify for financing as their owners are likely to be retired. This means that their personal credit scores should rank high which will be favourable when applying for a loan.
There are financial experts, such as the Rural Policy Group, that are familiar with businesses in rural areas. Such institutions assist rural businesses in obtaining financing for their ventures. It would be prudent to investigate the people at the helm of the financier you wish to approach when applying for a loan. Identifying key figures in the industry, such as Mark Lumsdon Taylor, will be a great asset to your success.
Limited Access to Resources
Small business owners may have limited access to resources such as specialist contractors or service providers. It may be costly to procure these services from city-based businesses. One way to address this problem would be to have the required work done at a less busy time of the year, saving on costs. For smaller jobs, you could tap into your local network of community contacts to assist.
Situation and Type of Business
Where your business will be situated will have a significant impact on its success, as will what it will be selling or offering. Ensure that you do extensive research on the residents of the area in which you will be operating, your competitors, alternative product offerings, and available infrastructure.
In conclusion, always remember that rural businesses are inclined to grow slower than their urban counterparts, but profit margins are likely to be better; this will allow for you to reinvest in your business, or settle outside financing quicker.
