Rural Entrepreneurs Help Improve Social and Economic Well-being

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.

In the wake of COVID-19, small businesses are holding communities together, creating two-thirds of net new jobs in the United States while accounting for nearly half (44%) of U.S. economic activity, according to the U.S. Small Business Administration (SBA).1 The bonds that small businesses create are especially strong in rural communities, which are home to one in five Americans or approximately 60 million people.

Indeed, businesses with less than 50 employees provide 42% of all jobs in rural America. That includes businesses of one, as their lack of population density means small towns historically have had higher concentrations of self-employed individuals than big cities.

“If you have a business that fixes air-conditioners and furnaces in a rural place, it’s not going to employ 1,000 people like it might in a major city,” noted Mark Partridge, a professor of economics at The Ohio State University, in a recent interview with the Federal Reserve Bank.4 “So you tend to see more small businesses in rural areas.”

Small businesses aren’t just more common in rural America, unfortunately they’re also more challenged. One reason is population stagnation, which is eating away at the supply of customers, employees and educators in rural communities. While the population in rural areas has declined slightly over the last decade, falling 0.6% from 2010 to 2020, the population in urban areas has increased, growing 8.8% during the same 10-year period, according to the U.S. Department of Agriculture’s Economic Research Service (ERS).5

And then there’s poverty, the myriad impacts of which can impede the formation, growth and survival of small businesses. Although the rural poverty rate is declining, it remains elevated in rural America, reports ERS, which says 15.4% of Americans in rural areas live in poverty compared to 11.9% of Americans in urban areas.

Fortunately, small businesses are hard-wired to treat obstacles as opportunities. 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.

To ascertain the state of rural entrepreneurship and raise awareness about the needs of small businesses in rural communities, SCORE researchers asked a large sample of rural business owners how they’re faring in light of current events, what their greatest challenges are, and what can be done to satisfy their needs.  Their findings are presented in two parts:

Part 1: Economic Anxiety Persists explores how business owners feel about the post-COVID economy and recovery, what their biggest challenges are and what solutions they believe will help them prosper.

Part 2: Hungry for Talent and Technology delves deeper into the effects of population trends on small businesses in rural communities and how they impede access to workers and technology, including the technology infrastructure, expertise and education needed to participate in the digital economy.

SCORE analyzed responses from a diverse pool of survey respondents, including business owners in the start-up, in-business and exiting-business stages. There were 3,345 respondents with 882 self- identifying as rural entrepreneurs. The businesses surveyed represent many industries and geographic locations throughout the United States. All survey respondents agreed to provide an honest reflection of their experiences and outlook.

In addition to the survey responses, SCORE dove deeper by interviewing rural business owners and asking them to express their specific issues and concerns. Their contributions and feedback, including direct quotes and qualitative analysis, are also shared in this data report.

I will digest the highlights of these two parts of the study and include them in my next two columns. 

SCORE is the nation’s largest network of volunteer, expert business mentors, with approximately 10,000 volunteers in more than 230 chapters and 1,500 communities nationwide. Since its founding in 1964 as a resource partner for the U.S. Small Business Administration, SCORE has helped more than 11 million current and aspiring entrepreneurs start, grow or troubleshoot a business through mentoring, workshops and educational services. In 2021 alone, SCORE volunteers helped create 25,084 new small businesses and add 71,475 non-owner jobs to the American economy.

About the Author(s)

Dean Swanson

Dean is a Certified SCORE Mentor and former SCORE Chapter Chair, District Director, and Regional Vice President for the North West Region, and has developed and managed many businesses. The Rochester Post Bulletin publishes his weekly article on a topic geared toward the small business community. The articles here are printed in their entirety.

Certified SCORE Mentor for the Southeast Minnesota Chapter
Rural Entrepreneurs