80% of Rural Entrepreneurs Say They Are Better Off Than Urban Counterparts

Rural Entrepreneurs Say They Have Better Quality of Life Despite Business Challenges

Ask any entrepreneur why they went into business, and improving their quality of life will almost always rank in the top three answers. And more often than not, the location of the business and where they live will also play an important role.

According to research from SCORE, rural entrepreneurs are reporting a better quality of life compared to their urban counterparts. This is despite the fact they face more challenges when it comes to the workforce, access to digital technology, and funding. But overall, they seem to be more content.

For small business owners, rural or urban, the challenges are an accepted part of being an entrepreneur. And even with these challenges, their entrepreneurial spirit is exemplified by the more than 30+ million small businesses in the U.S.

Research Findings

When it comes to quality of life and cost of living, 80% of rural small business owners believe they are better off than business owners in urban or suburban areas.

There are many factors which go into this, but this is how SCORE Acting CEO Bridget Weston, explained it in the press release. Weston says rural business tend to operate with higher profit margins while earning comparable revenue to urban businesses.

Weston adds, “What this means is that rural entrepreneurs have the advantage of keeping more of their business revenue, which makes it possible for them to provide a higher quality of life for themselves and their families.”

Additionally, there are more self-employed people in rural areas. According to SCORE, self-employment has been on a downward trend since 1990. But the numbers are better for rural areas than it is in suburbs and city centers.

From 1988 to 2016, the number is down from 8.4% to 6.5% for rural businesses, and 7% to 6% for the suburbs. And even though the number for urban areas has gone up from 5.2% in 1988 to 5.7% in 2016, it is still almost two percentage points lower than rural businesses.


You would think urban businesses earn more money, but the numbers are not that different. This is across the board, as there is only a three-percentage point difference in the biggest variance.

In terms of revenue, 21% of both rural and urban small businesses earn less than $100K. In the next tier or $100K-$1M, rural businesses fare better with 52% compared to 49% of urban.

The slight advantage comes beyond the million mark, with 26% of urban businesses getting $1M-$10M and rural with 24%. And beyond $10M, it is neck and neck with 3% of rural and 4% of urban.


The glaring difference between rural and urban businesses is access to resources. This includes funding, workforce, and digital technology.

When a rural entrepreneur is looking to fund his or her business, 71% say they use their personal savings. This is almost three in four of all rural businesses. And this is taking place even with programs the government has put in place to find funding for these communities.

Beyond personal savings, the breakdown is as follows:

  • Community bank or credit union: 14%
  • Investments or gifts from friends and family: 13%
  • Loan from a large bank: 6%
  • Angel investor or seed funding: 4%
  • Online lender: 3%
  • Crowdfunding: 3%

Finding talent is also an issue, especially for tech-related employment. Finding candidates with the right education, skills or training (74%) and experience (72%) tops the list. But lack of talent pool in the local area (69%) and finding candidates willing to relocate (53%) is also problematic.

The tech-related issues are of particular concern because more rural businesses are relying on digital technology. SCORE says digital technology is responsible for increasing sales by 17.2% in the past three years for rural businesses. And 20% of these businesses generate at least 80% of their revenue from online sales.

The numbers are great in terms of what they are earning and future potential with digital technology. But the next set of data highlights challenges they shouldn’t be facing.

  • 56% of rural small businesses do not have reliable access to digital technology
  • 6% do not have high-speed broadband
  • 4% still use dial-up access

Take a look at the infographic below for more.

Rural Entrepreneurs Say They Have Better Quality of Life Despite Business Challenges

Image: SCORE

Michael Guta Michael Guta is the Assistant Editor at Small Business Trends and has been with the team for 9 years. He currently manages its East African editorial team. Michael brings with him many years of content experience in the digital ecosystem covering a wide range of industries. He holds a B.S. in Information Communication Technology, with an emphasis in Technology Management.