COMMON OBSTACLES TO BUSINESS GROWTH IN RURAL AREAS
Rural businesses are those firms that are established and operate in rural settings, far from the metropolitan areas that have traditionally been the site of most non-agricultural business enterprises. Most businesses continue to conduct business in large cities or thriving suburbs, but analysts contend that technological advances, demographic changes, and increased attention to “quality of life” considerations have all combined to spur meaningful business growth in many rural areas as well. Increased receptiveness to new businesses has also had an impact on the growth of commerce in some rural regions.
Characteristics of Rural Businesses
There are three special features of business creation in rural areas around the world that are not present in rural areas. For example, the majority of growth in rural economies comes from existing business enterprises rather than new ones, particularly in the industrial sector. This is by no means an indication that new businesses – industrial or otherwise – cannot survive in rural settings. It merely means that existing businesses are particularly well-equipped to continue once they have established themselves. Reasons for this include the higher percentage of family-owned businesses in smaller towns (which help with issues of long-term continuity), less competition in local markets, and more determination when firms run into difficulties, through a genuine or perceived lack of alternatives.
Experts have also noted that businesses in rural areas tend to be characterized by their activities. Companies that specialize in providing personal services are common place, since there is a large and steady demand for their services, which in more metropolitan areas would be handled by companies armed with city contracts.
Manufacturing establishments, on the other hand, are scarcer because of transportation and work force issues. In isolated areas, business creation is usually aimed at local consumer markets (retailing, community services), or new market niches (products with a strong regional identity). In more accessible areas, it is aimed more at services or intermediate goods (sub-contracting). It is notable that business services, from office maintenance to consulting, are still underrepresented in rural areas because local markets are so small.
Obstacles to Business Growth
A significant percentage of new businesses in rural areas are established businesses that relocate. Indeed, many entrepreneurs have established their business ventures in rural regions in recent years. This trend has been especially evident among small business owners who have decided to relocate for “quality of life” reasons. These entrepreneurs are sometimes limited in their relocation options by customer demographics and other factors, but the desire for quieter, less hectic lifestyles have proven to be a potent one, as families search for homes that are not bedeviled by traffic, crime, and other attributes often associated with large cities.
Nonetheless, small business owners are urged to weigh the obstacles that often confront businesses that decide to relocate in rural locations. These hurdles range from different cultural standards and finding new friends to negotiating new ways of transporting goods or finding quality employees.
In addition, services in rural areas often do not match those that can be routinely relied upon in more metropolitan areas. Unreliable electrical service, skimpy or non-existent overnight delivery options, and increased telecommunication costs (for regular telephone service as well as internet connections) can all complicate the efforts of businesses in rural locations. These difficulties can be particularly problematic for businesses that are involved in high-tech areas.
For technology-dependent businesses to thrive in remote areas, connecting a computer to the internet is the easy part; finding employees who have the savvy to use the technology or finding someone to fix your computer can be far more challenging.
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