WASHINGTON, D.C. — A new report found rural small business owners play a key role in all facets of life within rural communities, but they often face different challenges than those in metropolitan areas, including geographic isolation, spotty broadband services, a reluctance among major companies, banks and healthcare providers to serve the area, difficulties in hiring and retaining qualified workers and barriers in accessing capital to build their businesses.
Unfortunately, little research has been done previously to try to understand the unique strengths and challenges faced by rural small business owners, which is particularly problematic given the economic challenges rural communities continue to face as they struggle to recover from the Great Recession. To better understand the state of rural small businesses, Small Business Majority conducted a three-pronged research project to explore the unique needs and challenges of small business owners in rural communities.
This report contains the results of focus groups with small business owners in Georgia, Mississippi, New Mexico and Texas, findings from roundtable discussions in the same four states with key stakeholders such as representatives from local chambers of commerce, economic development organizations and local officials within rural communities, as well as a national opinion poll of rural small business owners. Key findings from the report include the following:
- Across all focus groups, participants stressed that good employees are difficult to find and they can’t compete for more educated or experienced employees, and the poll found more evidence to support these beliefs, with 73 percent of respondents saying a lack of economic opportunity forces people to leave their community;
- Small business owners in focus groups and stakeholder roundtables identified access to capital as a major challenge for rural small business owners, and 4 in 10 poll respondents said accessing capital is a personal problem for them; and
- Small business owners and their employees nationwide routinely struggle with access to affordable health coverage, and this challenge is especially acute for rural small businesses; in fact, roughly 1 in 3 rural small businesses rated healthcare costs as one of the top issues facing their business.
The report, which contains policy recommendations that would assist rural entrepreneurs, also found rural small businesses need more education and assistance navigating financing options, and are concerned about their tax burdens and the lack of broadband or other infrastructure in their area.
“Rural entrepreneurs start businesses at higher rates than their urban counterparts and play a particularly vital role in rural America, creating roughly two-thirds of new jobs and supporting the economic and social wellbeing of their communities,” said Small Business Majority Founder & CEO John Arensmeyer. “Unfortunately, rural communities are struggling to recover economically from the Great Recession, lagging behind their urban and suburban counterparts. If we want to revive rural economies we must stimulate entrepreneurial activity in these communities to help reverse these trends.”
The results and recommendations in this report are based on a national survey of rural small business owners conducted by Greenberg Quinlan Rosner for Small Business Majority and qualitative feedback gathered through 21 informal “focus group” style discussions with small business owners and stakeholders. For more on the methodology, please see the full report.