Many entrepreneurs dream of reaching millions with their product or service, but what if your customer base is only a few thousand?
Patrick Palmer successfully runs his small business, The Computer Guy, in a town with less than 5,000 people.
Here he is with Shawn Hessinger, Executive Editor for Small Business Trends, on this latest edition of Small Biz in :15, to tell us more about how to successfully start a small business in a small town.
You can catch up to Patrick Palmer at his website if you need more information after watching this episode.
Check out the full interview with Patrick above on YouTube or listen on SoundCloud using the player at the bottom of the page.
Establish Small Town Success by Building Trust
Shawn: What is the main difference between starting a business in a small town or elsewhere like a larger urban area?
Patrick: The main advantage for me in a small town is, out of my 57 years, I’ve lived here 54. And that is, you can’t buy trust.
“Some of the same people that saw me walk across the graduation stage or knew me when I was in boy scouts or from my radio days—those people know me and trust me, he adds.
Many, many people say to me, ‘You know Patrick, the door’s open. Just go in and fix the computer and leave me the bill.’ That is a small town at its finest.
My main town, Hampton, is about 4200 people, so that’s kind of where I’m at now. I’ve used that small town niche to do other projects in other towns.
I kind of use the radio station thing, where if they can hear me in that area, that’s where I can serve. I basically do a free pick up and delivery 45 miles from Hampton.
And so that’s how I got into Mason City and Webster City, Patrick says. I was also in Waverly and a member of four different chambers of commerce for a while. That helped, too, up to a point, he added.
You have to be active and volunteer and be present. You can’t say, I’m a member and that’s all there is to it.
So, being active in our town and among the city council in our town has probably caused me a little bit of business because people get a warning saying their grass is too long—they think I sent it out.
It does have its pros and cons. But by and large, I would not want to go into a large town and start a computer repair place with the values and the morals and the whatnot that I have. I think that would be very tough.”
Declare Yourself the Expert in Your Niche
Shawn: Let’s say that you didn’t grow up in a small city, or say you did, what is the biggest challenge you face starting a business in a small town as opposed to a larger market?
Patrick: What I’ve done when I’ve gone to a smaller town is I just claim I’m the expert here. I plant my flag in the ground. And I’m the expert until someone says I’m not.
“So, I tend to find the pain points of the current computer repair person,
‘Oh, so they didn’t do that…
Oh, they didn’t know how to do that…
Oh, they lost all your data…awwwww!’
Finding those pain points, though, lets you build trust with them. And then, the word spreads.”
Patrick goes on to say one of the main reasons why he’s not in the Webster State Chamber anymore was because he built his business large enough not to need them anymore.
“And a couple of other factors with Webster state go into it, so that’s not the whole thing. Anyway, I was already promoting myself more than they were promoting me, he says.
There were no other computer repair techs that had brick & mortar stores, and if there were, I could still do it cheaper because I didn’t have to pay rent.
So, I come to town and have a set schedule on Fridays; I went there. And I have a set schedule—I go here and there and people just know it’s Monday or Wednesday—it’s past day in Mason City, Iowa.”
Shawn: Say I’m a business owner or entrepreneur living in a large town and want to relocate because I like small-town living—am I really going to make it in a small town with a smaller market? What do you think the advantages are?
Patrick: Depending on what the business is, I think you could. In 2020, I am on the city council too so I kind of have access to this information too, when everything was doom & gloom with Covid, we had 20 new businesses start up in our town.
“For a town of 4,000, that’s pretty big! Not only did we have a new funeral home, and a new grocery store, I mean, those are two big-ticket items, but we had new hairstylists downtown, a couple of new businesses downtown and lots of home-based businesses all around.
And so, I think it was a good chance for people to offer services in a pandemic that really was niche-filled that could work.”
Shawn: When you are researching what kind of business you might want to start in a small town, how do you go about it and what would your advice be for somebody starting out?
Patrick: I would definitely go to the chamber and find out what is needed in the town. And say I can do skill set A, B and C is there a demand in this town?
He added that talking to the mayor, or some people on the city council or at city hall might help you find out if there is a demand.
His advice is to walk up and down main street, pop into a few businesses, just introduce yourself and stick your hand out. He says that’s how he did it, adding that he is a people person.
Market Considerations of Main Street Business
Shawn: What kind of market considerations differ do you think in small towns? And about financing, you mentioned not having overhead, but I imagine overhead is a big deal when you have to have a business on main street when you are just starting up. What advice can you give people in those areas?
Patrick: I had a business downtime for about 3-4 years and hired an employee—and what they don’t tell you is how much that employee costs. It’s more than just the hourly rate, and I guess I wasn’t as informed about that as I should have been.
Patrick goes on to explain that you have to pay the taxes, the matching and all the other stuff that goes with it. I finally just said that’s enough, so I went back to my home-based business. I make less, but I keep more, and that’s what it’s all about too.
“As far as marketing goes, I did a lot of that when I was trying to compete with folks in other towns. For instance, he says, I used to have a van that had my name on it, and it was all lettered up.
Every town around here has a town celebration and parades. I had frisbees, and I would go there and throw them out, he says. They were just like business cards. They had my name on them, my logo, my website, whatever.
After doing 15 parades a year he explains that he had diminishing returns toward the end of it. He said I got to thinking I’d done enough parades.”
Patrick tells us that as far as marketing goes, he doesn’t spend money on it anymore. He says, people around here know me, my word of mouth is good. I’m on Facebook with my page offer. I offer tips and I do the 80/20 rule on advertising: 20% sell, 80% provide information. If any of that information helps somebody, then they call me.
Find Out More about How to Successfully Start a Business in a Small Town and Build On It
Be sure to check out the rest of the video where Patrick Palmer further discusses key points, such as ways to use your successful small-town business for creating new subdivisions and predicting the up-and-coming creative niches he believes will really deliver.
Also, if you are thinking about starting a business in a small town near you after watching, be sure to let us know in the comments for How to Successfully Start a Business in a Small Town.
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By living in the small town you also know what the community needs. If people don’t need what you do, it will never work. And also realize the goal is probably not to become a millionaire or franchise the business or sell it in 5 years for a huge payout. It’s a lifestyle business that gives you a comfortable living and lets you help the community.
Hi Robert, thanks for reading! You are correct. If you don’t offer what people want or need it’s not going to work anywhere, especially in a small town. It’s also got to be something they can’t readily order and have delivered to their home or business. Patrick’s ideas delve into that a bit and demonstrate how you can provide a niche need or service better than the competition does.
Lots of free information out there before starting a business….many small towns have active Main Street Program…also the wisdom of SCORE..all free…DO YOUR HOMEWORK FIRST..or you will be just wasting your time and energy…Information/patience and starting at the “core” and working your way out..(throwing a stone on the lake and watching the ripples)….This is one of my favorite subjects….I have seen them come and go over the past 31 years..!