Here are the top 9 small business trends in small towns and rural areas this year:

1. Strong farm commodity prices mean strong local economies. That is the biggest factor in the strong Rural Mainstreet Index and is also driving a continuing boom in farmland prices, as investors look for “safer” investment classes. That makes a strong foundation for local agriculture-based economies.

2. Some places get “just one more” oil boom. Relatively strong oil and natural gas prices mean a continued boom in production, mostly happening in rural areas. Several regions are seeing new or renewed plays. That brings new residents, new businesses and temporary prosperity.

3. Supporting the local economy takes more than “Shop Local.” We’re seeing more interest in moving money into locally-owned community banks and credit unions. With extra-tight lending standards for small businesses from big banks, many small businesses are turning to alternative financing methods. The book Locavesting by Amy Cortese outlines a number of local investing and business financing alternatives. More new businesses will consider cooperatives as a viable form of business this year, and 2012 is the International Year of Cooperatives.

4. Self-employment continues to rise. With all these positive trends in rural small business, there is more reason than ever to expect a continued increase in self-employment and business startups in small towns. We have to factor in the highly entrepreneurial Millennial generation, too, as the Kansas City Business Journal reports.

5. Ruralsourcing brings more high-tech to rural areas. Ruralsourcing is competing with global outsourcing, bringing manufacturing and IT service jobs into rural areas. With global supply chains threatened by higher shipping costs and rising manufacturing costs in China, we’re also seeing more projects returning manufacturing to home shores, Agurban reports.

6. Government cuts hurt. One negative factor is that 42 U.S. state governments are facing budget shortfalls again this year, the Center on Budget and Policy Priorities reports, though recent revenue is up slightly for many. After trimming services three years straight, outlying areas are likely to be targeted this year. Watch for big cuts in two rural mainstays: tourism and arts funding.

7. Online doesn’t mean in front of a computer. Mobile Internet access just keeps growing. Tablets and smartphones are changing the way potential customers look for businesses everywhere, including in small towns. The strength of cell signals and WiFi availability are important for tourism, and for small business capturing mobile customers. Rural businesses need to get mobile-friendly now.

8. Online reviews make everyone a local. Business pages have been created for almost every single business (even in small towns) by Google, Facebook and Yelp!, among others. Reviews and comments by customers give every visitor an inside view into local businesses. Result: We’re all in one big small town. This will help some terrific local businesses be found more often, and hurt some that really haven’t kept up their quality.

9. Rural broadband drives business development. With around 28 percent of the rural population still lacking access to 3mpbs or better service, much more needs to be done on access. Those who can access broadband are using it to build businesses and conduct commerce at a record pace. Expect more public and private projects to develop more business use of broadband.

Overall, most small town businesses have plenty to look forward to in 2012. The challenges of outside competition, the need to innovate and improve service, and the importance of connection with customers won’t be going away. But the economic outlook is generally strong, and new opportunities are out there. We have more information about the 2012 trends and updates during the year at our Rural Trends page.

Main Street Photo via Shutterstock

The post Top 9 Rural Small Business Trends for 2012 appeared first on Small Business Trends.

Local Movement

Local foods, shop local, local business. Local, local, local. This collision of trends into an entire movement is reshaping small town economics. It must be big, because big businesses are trying to get in on it. Here are the subtrends that smart small town businesses can use this year.

1. Local Foods: Farmers are the next food stars.
Local foods made up five out of the 20 top food trends in a National Restaurant Association survey of chefs. Clearly, people are thinking more about where their food comes from than any time in recent history. More farmers and producers are using social networking tools to connect directly with customers. More restaurants will be featuring celebrity suppliers and treating farmers like food stars. Opportunities are here for producers, value added processors and even simple things like farm visits.

2. Shop Local: A focus on building better businesses.
A “Shop Local” slogan is not enough anymore. In the next evolution, shop local projects will work to improve local businesses to better meet people’s needs, because more competitive local businesses are a natural draw for customers. One good model: the Main Street Four Point Approach(R). Look into the Economic Restructuring point for more on improving business competitiveness.

3. Local Travel: Meaningful tourism is more engaging.
Travel is expected to be up, reaching record levels in 2011. Visitors to small towns want to do more than watch an event. They want to be part of it, and they want their spending to make them a part of something larger. This represents a progression of engagement in tourism. Visitors pay a premium when they think their purchase is doing good, whether that is a renewal of the environment, of an area’s history, or of a particular culture. Smart small town tourism businesses will build more engagement with visitors and move towards renewal.

4. Mobile = Local: Connecting is good for business.
Small town people are carrying smartphones, playing location based games, and using Facebook even while out of the house. Visitors and travelers are using Google Local to find businesses in even the smallest of towns. Travelers and locals review small town businesses on sites like Yelp and Urban Spoon. All of this is happening now. Smart small town businesses are taking advantage of this, and 2011 should see more businesses in small towns offering coupons and deals through the established players like Google and Facebook. Mobile-friendly information and QR Codes will pop up, even in remote locations.

GOVERNMENT

Government is always a big driver of small town trends, partly because more small town people work in government jobs as compared to urban areas. This year there are two major subtrends.

5. Government Budget Crunches: Small towns take a big hit.
States were hit hard with reduced revenues in fiscal years 2009, 2010and 2011. Looking ahead, 40 states are projecting another shortfall in FY 2012. Local businesses are likely to feel a pinch as their customers are affected. When states consider trimming services, outlying areas are likely to be targeted. School consolidation is likely to come up as well. One key federal indicator: post office closures and suspensions are way up.

6. Health Care Reform: Some support for rural access.
Provisions of the new law are kicking in, but what will they mean? With court rulings and discussions of repealing provisions, health care is a real wild card right now. A 35 percent tax credit for small employers providing health insurance will be felt soon, as small businesses file 2010 tax returns in early 2011. Increased payments to rural health care providers should also provide some benefit during 2011 as rural areas continue to struggle to maintain health care services. For more information about which provisions start when, review the Implementation Timeline from the Kaiser Family Foundation.

ECONOMIC DEVELOPMENTS

Each small town’s economy is driven by a specific mix of local factors. No one economic forecast can cover all small towns and their unique economies. There are a few economic factors that cross regional boundaries, though.

7. Economic Outlook: Strong ag prices boost rural prospects.
The Rural Mainstreet Index is at its highest level in almost three years, carried up by strong agricultural markets. That is also supporting a positive outlook for more rural jobs. One worry is the recent run-up in farmland prices in many areas. No one wants to see yet another real estate bubble burst, dragging down the rural economy. For now, though, rural entrepreneurs have a better economic climate than many of their urban counterparts.

8. Rural Sourcing: Small towns capture jobs from outsourcing.
The wave of global outsourcing may have crested, and small town business can benefit by capturing more of these jobs through ruralsourcing. Rural service firms claim a number of advantages over global firms: shorter supply chains, better data security, intellectual property protection, cultural compatibility, and convenient time zones. Costs are lower than traditional urban firms, reflecting the lower rural cost of living. Those small town companies capable of partnering with large corporate clients stand to gain new business throughout 2011.

9. Ag Exports: Global trade is a rural issue.
Far from being disconnected from the wider world, rural areas have a direct link to world trade: agricultural exports. The U.S. trade deficit increased to $46.3 billion in August, while the agricultural industry managed a $1.8 billion trade surplus. Many ag-related small businesses go into that total, and this is an area with big opportunity for small business.

10. Entrepreneurship: A rural boom in sole proprietors.
More folks are starting small town businesses. New numbers out of South Dakota show a boom in sole proprietors. Sole proprietor numbers increased faster than jobs in most rural counties. Look for opportunities in supporting these new business owners and in partnering among rural business owners.

OVERALL

• This is a big year for small town business:
• Local is cool.
• The rural economy is strong.
• More small businesses are springing up.

Certainly, there are tough spots, but the overall rural business outlook is good, with many new opportunities out there.

The post 2011 Trends Driving Rural Small Business appeared first on Small Business Trends.

1. Census 2010 – Population counts are critical for government programs, grants, and more for a decade. Smart small towns and counties will be actively finding ways to get everyone counted. Watch for town meetings to answer questions, and a whole bunch of canvassing. Your small town business will be indirectly affected by the results for ten long years.

2. Health care reform – As we start the year, there are a couple of important rural items in the likely provisions of health care reform legislation. Particularly keep an eye on the student loan forgiveness and other incentives for rural doctors. The Center for Rural Affairs has a straightforward summary.

3. “Shop local” campaigns grow up and out: 2009 was the break out year for Shop Local campaigns. We’ll see even more in 2010. What started with support for retail and downtown businesses will grow up and out, to reach other small-town businesses. I expect to see more surveys of what local businesses need, and more attention paid to ways to help those businesses improve, as a part of the whole local economy.

4. Infrastructure: Construction is underway in many small towns on projects funded by the Recovery Act. Many more projects are still pending, so this will continue to build throughout 2010. Small town construction and trade businesses will be the first beneficiaries. Smart small businesses will find a way to support those construction firms, to benefit their own bottom line.

5. State budget crunches: In small towns, more people (i.e., your customers) work in government jobs. That can be bad news since 30 states hit budget deficits in 2009 and 48 states are facing deficits in Fiscal Year 2010.  I’m also expecting this to mean cuts to government services in outlying areas and more push for school consolidation. Neither is good news for small towns.

6. Broadband gets some attention: With the Recovery Act making a big push on broadband in rural areas and the FCC eyeing some rather slow minimum standards for rural broadband, expect to see more attention focused on rural access to broadband in 2010. Will we see better access? Only in some select areas. Yes, it’s a trend this year, but the solution will be a series of long-term projects.

7. Baby Boomers are migrating. The USDA is predicting more Baby Boomers will retire to small towns than previous generations.  This is going to mean an increase in the active 50-75 age group in some small towns. Get your business ready to welcome these new residents.

8. Regional partnerships: First it was economic development building regional partnerships. Now it’s tourism. Next will be business and entrepreneurship. Working together across traditional small town rivalries is difficult, and maintaining projects over long distances is daunting. But the benefits are worth it.

9. Business lending tightens: Small town businesses have always faced fewer lending options, so more small businesses rely on credit cards for financing. Since credit card companies responded to the recent reform bill by lowering credit limits and tightening their lending, many small town businesses have lost a lending option. All banks look at your last two years of financials for lending decisions. The 2008 and 2009 numbers are pretty bleak for most small businesses, so don’t count on the Citizens State Banks of the small towns to bend the rules to help.

10. Tourism closer to home: I’ve had enough of air travel hassles! I’d rather drive! Continuing the trend from last year, families are taking more driving vacations close to home. Small towns within an hour to an hour and a half away from the metro areas will gain the most. Almost any small town business can find a way to offer visitors a slice of rural life, or a connection to the culture.

The post 2010 Rural Small Business Trends appeared first on Small Business Trends.

Here are my picks for the top trends for rural small businesses.

1. Local Economy - Each small town economy is different. Of course we are all interconnected, but each region has different dominating factors, whether it’s agriculture, minerals, small manufacturing, or something unique. It’s a better indicator for your business than the Dow Jones. Two bad wheat crops in a row will touch my business quicker than the tightening of the national credit market.

2. Energy Production - Oil and natural gas prices have fallen far from their record-breaking levels in 2008, but are still high enough to support continuing exploration. Wind power and other alternative manufacturing and production have boosted many local economies. This means opportunities to build businesses supporting larger energy production companies, as well as new opportunities in helping small businesses, local governments and homeowners adopt renewable energy.

3. Shop Local – High gas prices were the catalyst; lingering interest in shopping locally is one result. Combine that with the falling economy, and we’re seeing more small towns start or revive hometown shopping promotions. Searches on Small Biz Survival for “shop local” have quadrupled over the last four months. As an individual business owner, it’s your job to constantly, repeatedly communicate what you offer to your local customers.

4. Online Shopping - High gas prices have had a second effect for small town businesses: driving sales online. Entrepreneur.com reported a prediction that online retail will rise 17 percent this year to $204 billion. If you can compete online, it’s high time you do. As a small town business, you have a chance to tell your unique story and create an online shopping experience that big businesses have to pay dearly to try to replicate.

5. New Residents – Small towns will continue to see an influx of residents, escaping from metro areas. If the economy slides seriously downhill, I expect this to accelerate. Have you thought about how your business would serve new residents?

6. Atwoods Effect - Many new residents will be of the gentleman-farmer type. They may only have half an acre, but to them it’s a spacious ranchette. They need all the farming and country accessories that go with a rural lifestyle. You can be the one who provides them.

7. Regional Tourism - Instead of flying out to the tropics, many city residents will be looking for chances to travel regionally. Expect to see more family driving tours. The big beneficiaries will be the businesses that offer a slice of rural life, or a connection to the culture. This can be anything from traditional food making, old time crafts, old-fashioned farms, and even modern but rustic wineries.

8. Wildlife Assets – 87.5 million U.S. residents fished, hunted, or watched wildlife in 2006, up from 82 million in 2001, according to the U.S. Fish and Wildlife Service. All together, they spent $122 million, primarily in rural areas where you find most of the wildlife. Small town businesses have opportunities to provide the individuals with more services, not only lodging and food, but also equipment, and even other activities for families.

9. Local Foods – Transporting food long distances costs not only dollars, but also has an environmental impact. Foodborne illnesses have been linked to imported foods and huge food processors. Put that together, and you have a growing group of people who are actively seeking local foods from smaller producers. (Do a Google search for “localvore“.)  Small town businesses can take advantage of this by not only feeding local residents, but also by reaching the nearby metro areas. Local food businesses can band together to promote a regional food experience.

10. Millennial Generation - The millennial generation is bigger than the Baby Boomers, more entrepreneurial, more civic minded. You’ve never had a better chance to engage the youth of your community. These are the kids who will help many small town businesses adopt new technology.

Bonus Trend:

11. Online Interaction - Even in my small town of 5,000 people, I’m seeing waves of locals on Facebook and other social networks, as well as reviews of local motels and restaurants on TripAdvisor. Not only should you be present in these places to interact with your customers, but you can also actively encourage your fans to post their reviews.

* * * * *

About the Author: Becky McCray is a small town entrepreneur, co-owner of a liquor store and a cattle ranch. She writes at Small Biz Survival about small business and rural issues, based on her own successes and failures.

The post Trends for Rural Small Businesses in 2009 appeared first on Small Business Trends.