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14 small town business ideas with big potential

Small town business ideas: Barista creating latte art

Key takeaways

  • Small towns can be highly lucrative markets filled with loyal customers
  • Providing essential goods and services is a great way to establish your business as a vital part of a small town
  • Businesses that add value to a community or attract visitors can also thrive in small towns

Wherever there are people, there’s a potential market. Even a small town can present significant opportunities for your storefront. Businesses are central to life in a small town, so joining these lesser-known communities gives you the chance to quickly gain customer loyalty—as long as you have a great small town business idea.

Nailing down the perfect type of business for a small town isn’t too hard. While small towns make up over three-fourths of all incorporated places in the United States, their populations are often underserved. You don’t need to make up an entirely new business model to meet small town needs. What’s more, you’ll have far less competition and lower startup costs than you ever would in a big city.

Whether you live in a small town or want to take your entrepreneurial dreams outside the big city, these 14 small town business ideas can help provide a starting point for your business plan.

14 lucrative small town business ideas

While it may be tempting to create a one-of-a-kind business combo, like a cat cafe or a magic shop wine bar, you don’t need to overcomplicate your business idea to succeed in a small town. Some of the most profitable businesses in rural areas are the simplest. You’ll still need to create a business plan, as well as register and license your business, but you don’t have to find a super specific niche to stand out.

In these largely untapped markets, aspiring business owners can succeed by focusing on an essential need or way to improve life in the local community. On the other hand, you can attract a customer base outside your surrounding neighborhoods by creating a business that reflects your unique small town charm.

Here are 14 great business ideas that can generate high demand from a small population:

1. Grocery store

If there’s one business everyone needs, it’s a grocery store. But not every small town has convenient access to food. And even when they do, it might just be a weekly farmer’s market or store with limited selections.

Opening a grocery store that provides a variety of produce, meats, pantry items, and even basic medicine cabinet essentials can instantly make you a weekly stop for the majority of a small community.

One way to give residents a reason to choose you instead of driving to Walmart or other big-box stores is by sourcing your products from local farmers. You’ll not only provide the freshest options, but you’ll contribute even more to your local economy.

2. Restaurant

Restaurant server carrying plates of food

Everyone likes to treat themselves to a nice meal out once in a while. Full-service restaurants are go-to destinations for celebrations, family outings, date nights, and many other special events in a small town. Being a restaurateur also lets you provide convenient, prepared food via takeout and delivery services. Similar to grocery stores, restaurants can stand out from the competition—especially chain options—by sourcing local ingredients.

Most cities with high restaurant spending per capita are not major metro areas. Taking U.S. Census Bureau stats from the same article, it can be estimated that even in a town with average spending, there can be about four full-service restaurants per 5,000 people (not including fast casual or fast food joints).

3. Coffee shop

Coffee shops are gathering spaces in every community. Not only do people love stopping in for a daily cup of joe, but they also enjoy the social aspect of meeting up with friends, neighbors, and the local community.

Coffee shops are also popular hubs for high school students needing space to study or professionals having a work meeting. As a coffee shop owner, you can invite local musicians to perform on different nights of the week, giving locals yet another reason to stop by, make a purchase, and hang out. 

4. Handyman service

Handyman services can be hard to book when you’re living in a rural area, leaving residents with leaky faucets or broken windows for days. And when the issue is something more severe—perhaps a flooded bathroom or unlockable door—they typically need to pay a premium to get professionals out quickly.

If you know your way around plumbing, home improvement tools, electrical wiring, or drywall repair, this lucrative small town business idea may be a great fit for you.

5. Hair salon

Haircuts are a basic need for people of all ages, and in small towns, your salon or barbershop may be the closest option within miles. Just about anyone who isn’t willing to risk a DIY haircut or dye job will quickly become a loyal customer. As a result, you’ll likely see the same customers return every couple of months (or even sooner).

You could also consider making your hair salon a full-service beauty salon by offering makeup, waxing, and facial services to draw in locals who are looking for a little pampering.

6. Gas station

Whether locals are driving cars, trucks, or motorcycles, they all need gas to get around—even if it’s just within their little town. Gas stations are essential businesses no matter where you live, and they can be especially profitable if truckers pass by your small town frequently.

You can even offer a car wash as an additional service or—more traditionally—a convenience store in the same lot.

7. Auto repair shop

For small town residents, owning a vehicle is a must for getting to work or accessing goods or services that aren’t nearby. An auto repair shop is an excellent small town business idea that can put you front-and-center for anyone experiencing car issues, flat tires, and more. When a car breakdown occurs in the area, there’s a good chance your local business will get the call, since roadside assistance can have particularly high wait times in rural areas.

When repair services aren’t needed, you can help with ongoing car maintenance such as oil changes and tire rotations.

8. Bed and breakfast

Small towns may be the last place you expect tourists to seek out, but this is exactly why so many travelers are headed to rural areas these days. Rural tourism continues to rise as people search for unique, authentic experiences outside of big cities like San Francisco and New York City.

A bed and breakfast is an ideal lodging option to attract travelers to your small town. Whereas a full-sized hotel may be too large and expensive to maintain, a charming bed and breakfast makes the stay an experience in itself. And since most B&B owners live on the property, you don’t have to pay a monthly fee for a separate home.

9. Dessert shop

Some of the best small town business ideas are those that provide delicious treats made from scratch. Whether it’s an ice cream shop, fudge store, bakery, or all three, tourists and residents alike love stopping by for a snack. Dessert shops naturally add to a small town’s charm while giving residents a fresh, local option for sweets.

10. Clothing boutique

Retail clothing stores are great small town business ideas

If you’ve ever dreamed of owning your own clothing store, a small town can be an excellent market for you. Rural towns often have limited options for clothes shopping—usually at a mall a few towns away or online with shipping fees. As such, opening a clothing boutique can make you the go-to shop for essentials like T-shirts, accessories, and gifts.

Add some souvenirs to your inventory, and your new boutique is perfectly set up for tourists too. You can even sell to people outside your town online to ensure your retail business always has a rotating stock.

If you want to involve your community a little more in your boutique, consider operating it as a thrift store where locals can trade in old clothes and purchase recycled items. Do your research to learn about the local community and what type of store would best suit their needs. 

11. Daycare

When you’re living in a small town, it can be challenging to find someone to care for your kids while you’re at work. Opening up a daycare—even as a home-based service—allows you to become a vital part of a small community.

As long as you have childcare or teaching experience, this small town business idea can easily get you repeat customers right off the bat (especially when summer break rolls along).

12. Pet grooming service

Pets are members of the family—and ones that people love to spoil. Every small town needs a place for basic pet care needs like haircuts, baths, and nail clippings. These types of pet grooming tasks are harder to do at home, but not quite worth a trip to the vet (or the higher price tag). In small towns with plenty of farmland, mobile services that offer horse grooming in addition to dog grooming can also be solid businesses.

If you want to include multiple streams of income in your business plan, your storefront can also double as a pet essentials shop that offers basic pet foods, livestock feed, treats, toys, accessories, and more.

13. Cleaning service

Folks may be inspired to complete spring cleaning when March comes along, but cleaning is a tedious chore that everyone wants a break from during the rest of the year. Opening up a cleaning service—whether it’s for households, businesses, or both—is a venture that locals will appreciate.

Niche cleaning companies, like carpet cleaning and dry cleaning service businesses, can also be lucrative business opportunities. When someone gets a wine stain on their carpet or their favorite jacket, they’ll probably be willing to pay a premium to get it fixed.

14. Photography service

Even in a small town you can turn your hobbies into a career. If you’re good with a camera, you can quickly build your own business by offering family portraits, senior portraits, and other professional photography options for locals in your small town. Plus, as more retail stores start selling online, you can offer small business owners social media and product photography to help them achieve the online presence they want.

This freelancer gig can be especially profitable if you live in a rural area with plenty of natural scenery. Customers may be willing to drive over to you for great shots, particularly if you also build your online reputation.

Bring your small town business idea to life

Living in a small town doesn’t have to be an obstacle to successful business ownership dreams. Small towns often don’t have the same amenities of large urban areas, and that can open up a perfect business opportunity for you. As your business makes life better for residents or inspires local tourism, you can become a significant part of the community.

Once you set up shop, don’t forget to claim your Yelp Business Page to give locals a chance to learn more about your new business on the block. This free listing makes it easy for locals, passersby, and visitors alike to find your business and get inspired to stop by for the first (but not the last) time.

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The information above is provided for educational and informational purposes only. It is not intended to be a substitute for professional advice and may not be suitable for your circumstances. Unless stated otherwise, references to third-party links, services, or products do not constitute endorsement by Yelp.