Top 9 Rural Small Business Trends for 2012

Rural small business trends are always different from general small business trends. This year, the difference is in the economic outlook. With the consensus of economic predictions for 2012 showing slower national growth and the odds of a renewed U.S. recession at 1 in 3, the national economy doesn’t look good. Contrast that with the local economies in rural areas. The Rural Mainstreet Index is at its highest level since 2007, and rural small business looks promising.

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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


Becky McCray 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.

22 Reactions
  1. Great post, Becky!

    Some good news that you were nice enough to point out;

    “Ruralsourcing is competing with global outsourcing, bringing manufacturing and IT service jobs into rural areas.”

    Just think of it; we’re keeping some jobs here.


    The Franchise King®

  2. Good round up! Becky seems to have a good pulse on rural America businesses. I see that tech is a big theme here. Curious to see more on the overall economic development of rural America with a focus on entrepreneurialism, generational divide, knowledge-based economy and educational impacts.

    Keep the posts flowing Becky!

  3. Andrea, I think you have lots to say on those subjects, and you should say it. I would be eager to read your take!

  4. Becky, do you think that the general increase in commodity prices will be offset by inflation in the price of many consumer goods?

  5. Robert, I think it won’t. But it depends on the business and the location. Think of it as a balance scale. For businesses with more exposure to agriculture, they’ll benefit more on that side. For those with more exposure to inflation, they’ll be hurt more on that side. So a farm supply store is probably going to benefit as their customers benefit. But a small town grocery store is more likely to be hurt with higher food prices hurting their customers. That said, the projections for inflation are still mild (in the neighborhood of 2%).

    I think the best source for in-depth economic analysis of the rural economy is the Rural Mainstreet Index:

    • Thanks for that reference to the Rural Mainstreet Index — I learned something new today, Becky. Good source of info.

  6. I’ve been an avid supporter of the Small Business Saturdays and I’d say any small step can surely contribute to making a huge difference. I’m excited for the coming year though, and I’m facing it with hope and optimism. Thanks for sharing these trends and Happy Holidays!

  7. Becky: Have you compared the Rural Mainstreet Index with the Purchasing Managers’ Index? I like that you point out: “Online doesn’t mean in front of a computer.” Don’t you think that mobile apps like Foursquare will put small businesses in rural areas on the map?

  8. Anita, they are definitely the best rural-focused economic analysis that I’ve found.

    Shaleen, cheers to you!

    Martin, the two indexes are so different, I would not think comparing them would add much insight. On the subject of Foursquare, my opinion hasn’t changed since April 2010: they make good sense for tourism, but not as much for local business. Make sure you read the comments on that piece, because readers added some excellent insights!

  9. So glad to see this good news. My mission has become to change the culture of America to prefer and support locally owned businesses. After 25 years “in the field”, I’m focusing on making economic development part of the American culture … like it was in the 18th and 19th centuries … only better. Hopefully, I can expand and reinforce any and all mainstreet, entrepreneurial, localization, and small business efforts. You are all welcome to join me.

  10. Great info, Becky – link shared with students on our Wikispaces page.

  11. TY Becky, for that great article. Your picture looks like Frederick, MD 🙂 Very good information, how online is a large community and small biz need to tap in.


  13. Some good ideas, will try and put a spin on a couple and see what i can come up with

  14. Where I’m currently settled now, agriculture is the best investment you can think of. Different rural areas have what business works best for them. I will look into an idea on your list soon. Thanks for sharing this.

  15. Any trends available for 2016? This surely looks right for 2012