Rural small businesses play a key role in America’s economic growth, but face barriers to success

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WASHINGTON, June 2, 2022 /PRNewswire/ — Small businesses with fewer than 50 employees provide 42% of all jobs in rural America, meta-analysis finds SCOREmentors for American small businesses and resource partner of the US Small Business Administration.

Small businesses contribute significantly to the health of rural economies, but face a number of challenges, according to SCORE’s analysis, including:

Demographic decline

  • Rural America recently faced its first-ever population decline of nearly 300,000 people between 2010 and 2020. For small business owners, declining population means fewer customers and employees, which translates by declining profits and labor issues.

Funding challenges

  • Rural entrepreneurs also struggle to obtain venture capital, angel investments and other funding. Nearly 60% of rural communities depend on small banks and credit unions as their main source of financing, but 89% of counties that were deeply affected by bank closures were in non-metro areas. Additionally, only 0.7% of angel investor dollars go to small rural businesses.

Limited broadband

  • Depending on income, 20-30% of non-metropolitan households do not have access to high-speed internet, which impacts the creation of new businesses in rural markets.

“The path to entrepreneurship can be more difficult for some,” said SCORE CEO Bridget Weston. “We know that resources differ from community to community, which is why we want entrepreneurs in rural and non-metro areas to know that they are not alone. We’re here to help small rural businesses get the support and guidance they need to get started and grow.”

SCORE supports small rural business owners

SCORE customers Dave and Susan Sperstadco-owners of Touright Bicycle in Little Falls, Minn., live and work in a rural and economically depressed part of the state, which can be a challenge for anyone looking to start a business. “Having SCORE here and available to help us out so we don’t have to close the shop, it levels the playing field for people like us,” says Dave. The Touright Bike Shop is now a thriving and vibrant part of their community.

Jim Mansfieldowner of Four Hills Farm in Versailles, Ky., struggled to grow his business in his rural community early in his entrepreneurial journey and turned to SCORE for help. “Farming is a business, and SCORE has been very helpful with everything from accounting, marketing, business growth and employee management issues,” he explains. “[Our SCORE mentor] Kurt has been invaluable. He helped us avoid major mistakes and taught us how to keep great records to focus on the bottom line. He holds us accountable for ‘homework’ that we may have neglected at first, but still helps our business grow.”

How SCORE can help you

SCORE supports all entrepreneurs on their small business journey. There are a variety of tools for people looking to start or grow their business, including 24/7 expert mentorship, resilience training, and on-demand educational resources. Visit SCORE.org to learn more.

About SCORE:

Since 1964, SCORE has helped 11 million entrepreneurs start or grow a business. SCORE’s 10,000 volunteers provide free mentorship, workshops and educational services to more than 1,500 communities nationwide, creating 25,084 new businesses and 71,475 non-ownership jobs in 2021 alone. Visit SCORE at www .score.org. Follow @SCOREMentors on Facebook, Twitter and LinkedIn.

Finance [in part] through a cooperative agreement with the US Small Business Administration.

Contact:
Meghan Dooley
SCORE
202-968-6428
[email protected]

Sources:
https://www.brookings.edu/research/rural-small-businesses-need-local-solutions-to-survive/
https://carsey.unh.edu/publication-rural-america-lost-population-over-past-decade-for-first-time-in-history
https://www.sec.gov/files/sbcfac-111621-robb-presentation.pdf
https://www.ers.usda.gov/webdocs/publications/102576/eib-230.pdf?v=9900.6
https://www.federalreserve.gov/publications/files/bank-branch-access-in-rural-communities.pdf

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