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8 Tips for Starting a New Business in a Small Town in 2021


In the wake of COVID and the rampant disruptions to peoples’ lives, there will be people relocating for all sorts of reasons. If you find yourself relocating to a small town and thinking to start a business there, here are eight tips to help you validate your business idea, transition into a new career, and promote your new business.

I know it is 2021, and we’re in the middle of the information age, but depending which small town you’re looking to set up business in, you may be surprised that some communities haven’t changed much since 1990!

Prepare for Some “Culture Shock”

When you’re planning a new business in the cities you make your decisions by the numbers, and the particulars of the neighborhood or neighborhoods available to you where you can set up the business.

You might even access more detailed information from archived data from the authorities, etc.

In a small town of less than ten thousand people for example, you’re going to have to glean this info through conversations with the people.

It’s possible that from talking to the people you’ll find them to be friendly and positive and optimistic to your ideas – before you scratch the surface!

So, your first challenge is to do just that! Get below the surface, learn the true story – and what exactly the people are thinking. It might be a good idea to ask lots of questions before you tell anybody your plans to start a business.

A golden phrase to look out for is, “I wish we had…” You can try a few leading questions discretely that elicit this response. I will leave that to you.

If You Can Find Them, Talk to Others Who Have Recently Opened Businesses in the Town.

You want to know the challenges they have faced. You also want to discover what works and what doesn’t. Get them to tell you about newcomers who succeeded in starting a new business in the town, if any.

If there are some, or even one, then find out are they truly new in the area, or they have deep roots in the town? By deep roots I mean including something like maybe they have a brother or sister who has lived in the town thirty or forty years?

If you should discover that nobody has opened a business for some time, you should dig deeper. What if there is no market? On the other hand, it could happen that they have been waiting for an idea such as you have to come to town!

It happens sometimes that a new business stimulates demand for a product or service – demand that has lain latent for a while. So, make that call.

A Great First Impression Goes a Long Way (A Bad One May Stay for Good!)

Promoting your business in a small town is actually easy. It’s possible everyone will know all about it ten minutes after you open shop.

But you also need to know that in some towns a good number of the residents may resist doing business with “snobbish” newcomers. But some other towns, the residents welcome strangers.

So, it might help if you do your best to blend in. Don’t become the town’s new definition of a “city slicker”!

Whichever way you cut it though, remember that your first impression will stay in their minds for years and years. And in case you somehow badly impressed a local opinion leader, the damage could follow you for years too, and be very difficult to erase.

Unmask the Town's Market and its Memory.

If you’re considering buying a business in the town, take your time and investigate the owner's reputation. Are the local residents excited at the prospect of a change of management at the business? That’s a sign you should consider giving the business a new name and a new image – re-branding.

On the other hand, if the last owner just moved away and you discover that everyone misses the previous owner, then this is a great opportunity you have to inherit this “goodwill.”

Ask around, what did he do differently to deserve such a good reputation? Step into those shoes!

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With that all said, be sensitive to change. It can happen that the last three businesses of the kind you’re looking to start in the town, failed. That in itself isn’t a sign that a new business will fail. Times change, the economy changes, towns change.

So, do some research: Why did those businesses fail, and what has changed? You could come up with a new angle that doubles or triples your chances of success.


Stay Abreast of the Local Regulations (Read the Small Print!)

Ever heard the expression, “red tape”? In a city, in this information age, you can get a lot done fast when you’re starting a new business. In a small town, maybe yes, maybe no.

If you’re going into the food business, for example you will be required to have all sorts of permits, in any state, any town. Make sure you find out what the local authorities require of businesses in this sector.

Be Prepared to Run a One-Man or One-Woman Show

Meaning you may have to do most of the work yourself! It’s possible to find yourself having a hard time hiring assistants, simply because you can’t find good employees!

It cuts both ways… If you’re lucky, the locals may have a work ethic to shame Hercules himself. If you’re not lucky, they could turn out to be lazier/more incompetent than your definition of a “village bum”!

Get to Know Your Market (Your Customers)

What are the demographics like…is your market going to be mostly second and third generation local residents? Or is it mostly people who relocated to the town from urban areas in the recent past?

The reason you want to find out is because this can have a huge impact on what to charge for your products or services.

In a small town some, or maybe most, people may find it too expensive to buy a coffee for four dollars. On the other hand, if you’re selling to folks who had a relationship with Starbucks when they lived in an urban area, for these an espresso each day every day is a perk they won’t be giving up easily, at the higher price, small town or not.


Build Relationships with the Locals

Seek out the local leaders and see if you can get in their good books. Become friendly to a town leader for example and you might get “followers” in the community.

On the other hand, if you for some reason alienate someone with a significant following, you could be in trouble. This can happen too if one of these key people in the town has on their back burner an idea to start a business like yours that they haven’t implemented for some reason.

The other thing is that in small towns the new comers especially are expected to be super citizens. So, be extra careful when choosing your alliances and sponsorships. Additionally, be prepared to entertain all sorts of friendly requests.

Friendly requests to donate your time. Friendly requests for materials. Friendly requests for money.

When You Finally Start the Business, Quickly Identify the Top 20% of Your Customer Base

In almost any business there are the “top cream” (crème de la crème) type of customers/clients. It doesn’t have to be 20 percent… maybe it’s a smaller percentage, but they account for 80% or more of your revenues.

The earlier you can identify these the better, because you can start to “pivot” your business to give them more of what they want (or different variations, which is selling deep), or to give them products/services that are related to what you’re already selling them (selling wide).

You also want to give them special attention, special discounts to encourage repeat business, etc. but be careful not to draw negative publicity, or to be seen as “going snobbish” on the rest of the town!

That’s how you grow an ordinary small business into an extra-ordinary money machine, of course in small town terms!


Starting a business to serve a small town community comes with its own unique challenges.

Word of mouth accounts for most of the marketing and promotion. And because of this, depending on which part of the country the town is located, you could find that navigating the prevailing social dynamics and/or the complexion of the town’s demographics calls for a delicate balancing act.

The eight tips above should help you, among other things, to decide if your business idea is viable, and how to promote the business once you start.

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