Brainstorming new business ideas (Part 2): Starting a small town business

While starting a new business in a big city means lots of competition, starting in a small town presents special challenges, too. Though you might not find dozens of companies selling similar products or services, you will encounter customers who might be set in their ways and reluctant to venture out into the unknown. With the boom in online shopping, a small town business that relies on a ‘bricks and mortar’ physical location might seem passé, but there is obviously still a place for businesses that rely on proximity and convenience.

Some things like going to see a live show, or enjoying the view from inside a trendy cafe, are not available from Amazon. Besides, who is to say you can’t cover both aspects (as you probably should): produce things people want, or offer services that can be made available to folks in town as well as anywhere else in the world, online. Probably a mix of the two can work well, where for example, a cafe in town might also roast their own coffee and sell those beans locally, regionally and internationally via online purchases.

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It’s a mistake to think small towns aren’t hospitable places for successful businesses. In fact, a tremendous variety of companies can thrive in a small-town setting. Learn more about becoming an entrepreneur.

First of all, Powell River: do your homework!

  • Look at Statistics Canada sites (including Census information for Powell River) on local demographics to help determine your potential market share. But be aware that if everyone caters to the largest demographic, there is less of the pie to share, whereas providing goods and services to a smaller but defined group might be more successful, especially if you have a passion for the product or service!
  • Look closely at what the town needs more of in terms of products or services. Ask around town, and drop in at Career Link for some statistics on job postings, local wages, the pool of available qualified staff and training, and find out more about supports available for self-employment, as through Community Futures. 
  • Determine if you have the peripheral businesses required to better ensure your business survives (eg. if you are planning to run your own bookkeeping business, are there enough businesses that need your services to make it viable?)
  • Check out those in business in your town right now (Powell River Business Licence Directory for 2018) and see how well they seem to be doing. Would a similar business work for you? If you really like a current business as-is, would they be willing to sell it to you?

The following general options represent tried-and-true small business ideas for small towns:

Accounting and bookkeeping.

A great way to create a sustainable business in a small town is to cater to existing businesses.

Auto repair and sales.

Small towns tend to have little or no public transportation, which means nearly everyone drives a car. That means nearly everyone will need to seek out auto repair services and/or auto parts sales at some point.

Beauty salon.

No matter where in the country you live, people are going to need haircuts, and they’re going to need them on an ongoing basis. Add in manicures and pedicures, massage and retail cosmetics and body products, and you’ve substantially diversified your income.

Cafés, Bars and Restaurants (plus seasonal side projects).

Look closely — there’s an “and” between those business types, not an “or.” When you’re setting up shop in a small town, combining two businesses into one is a great strategy for attracting an adequate volume of clientele. And since many small towns may be lacking in options for both coffee shops and bars, this combo will have instant appeal. You may also want to develop a business like a cafe and creatively mix-and-match offerings that could appeal to your customers, like adding used book sales, seasonally offering ice cream/gelati, pottery or local art aspect to your business. Be careful to not get too sidetracked by these peripheral businesses, and to keep your eye squarely on your main product.

Gyms or Personal Training Services.

Small towns often still fail to provide residents with options when it comes to getting in shape. That’s why opening a gym is a great idea — especially if you offer a variety of machines and classes to attract a range of fitness styles.

Household maintenance/ Small equipment repairs

A number of business ideas could fall under this category, from plumbing or electrical work to roof repair, house cleaning, painting and general handyman work. Anywhere with homes is going to require these services, so this is a fairly secure option. Small equipment repairs work best for more expensive items where repairs are much less expensive than buying new.

Landscaping and lawn care services.

Unlike in metropolitan areas, most homes in small towns feature lawns — and that means those lawns need to be cared for. Not only is starting up a lawn-care service a sound business idea, but it also requires relatively low overhead.

Before opening a business, scout potential locations to determine their visibility, traffic, surrounding demographics, parking accommodations, expansion opportunities and more.

Special considerations when starting a business in a small town

Opening a small business in a small town presents a unique set of challenges and opportunities. In addition to the usual hurdles facing new business owners (funding, legal issues, knowledge gap/ learning curve, and insecurity).

The challenges include:

  • Having fewer customers, generally (and possibly a great variation in customer base depending on season)
  • Infrastructure, materials, building and shipping costs may be higher, and the progress may be slower than in a big city, so factor that into your plans and predicted costs
  • Having a smaller pool of qualified applicants may also mean having to hire from outside your town and possibly cover some costs for employee relocation and retention
  • Less discretionary income among your potential customer base, generally and therefore a greater challenge to develop even short-term clients or customers
  • Consumers who are set in their ways and routines (and may be less willing to try out a new establishment), and may be overly critical

On the plus side, small-town businesses face:

  • Lower costs for infrastructure and wages
  • Less competition for the product or service
  • The opportunity to truly connect with customers in various ways (leading to what can be a very positive lifestyle where you can feel like a really important part of a community)
  • Easier networking
  • The ability to create highly targeted marketing campaigns
  • A higher likelihood of providing products or services people truly need

Take the following into account when opening up a new business in a small town.

Mentors are invaluable, especially if you are purchasing an existing business from them!

Talking to other people who have opened a business in the same town can be tremendously helpful in terms of getting a better understanding of the town’s demographics, laws and so on. It’s also a great way to build a strong support system. Small-town business owners can benefit tremendously from pooling ideas and resources, so it pays to develop positive relationships with other local business owners. Small towns can have antiquated regulations, so there may be unexpected red tape involved in opening up shop. Consult your network of fellow business owners to learn the best way to navigate these obstacles, and be prepared for approval to be a potentially slow-moving process.

Customer service is more important than ever, and you are very visible in all aspects of your life and social media

Especially if you are new to a smaller town, when you open up a business there, you’re operating among your neighbors and friends. Not only do they know you, but they also know each other — and they’re likely to talk. That means it’s extra critical to preserve your company’s reputation through top-notch customer service, and to maintain a professional appearance even when you are “off”, as well as on social media.

It’s who you know.

This is true not only when it comes to networking with other business owners, but also when it comes to who you employ and the customers you attract. Employing well-known locals (or finding other ways to attract them to your business) is a great way to lure more people to your products or services. Are you starting to pick up on the pattern? When you’re opening a small business in a small town, it’s critical to invest in building real relationships with members of your community, including your interaction with charities, special events, etc.

Location (really) matters.

Of course location matters any time you’re opening a business, but it’s especially important in small towns where foot traffic is not guaranteed the way it is in major cities. And, speaking of traffic, since more of your customers are liable to be driving, parking is a big consideration.

You might need to get creative in order to cut costs.

Because small-town businesses may never see the same profits as their big-city counterparts, it’s important to minimize costs wherever possible. There are several creative ways you can go about this, from renting out rooms above your retail space as apartments to sharing a workspace with another business and splitting the cost.

Check out these helpful links:

Build a Business Plan

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