If you're thinking of starting your own business, you might think that the best opportunities lie in big cities. In fact, America's smaller cities and rural areas offer many advantages for entrepreneurs. You'll enjoy a lower cost of living and a less competitive market. Plus, you can enjoy the fulfillment that comes with catering to the needs of a close-knit local community.

That said, starting a small town business also offers challenges. Business owners may have trouble accessing the resources and employees they need to maintain operations — and they may face difficulties maintaining when serving only a small, concentrated market. The key to success is carefully selecting a fitting business for your chosen location.

Are you scratching your head deciding which small town business idea to venture into? This article suggests some of the best business ideas for meeting small town needs.

What to Consider Before Starting a Small Town Business

A small town business can be lucrative, provided you set up a business that meets an unmet demand. Ideally, your chosen business model will provide a good or service that is essential to small town life or adds some other value to the community — for example, by attracting out-of-town visitors who can further bolster the local economy.

Determining a fitting business for a given location requires doing market research into that location. As you decide which small town business model you want to pursue in your chosen town, suburb, city, or rural community, ask yourself these questions:

  • Where is there an unmet need? What goods or services are currently missing? Are there certain things residents need to look for externally (e.g., online ordering) that could be provided on-site?
  • What is the competition like? Take a look at which businesses are currently operating in the area. If a small town already has one nail salon, does it really need a second one? While an urban metropolis like New York City can maintain dozens of salons, the same isn't true for a smaller town.
  • How much expendable income does the community have? The cost of living in small towns tends to be lower and people may not earn as much in these communities as in big cities. If you are in an area where most people live hand-to-mouth, it may be difficult to sell expensive items. The U.S. Census Bureau has data that may prove useful, such as state-specific numbers regarding poverty. The Pew Research Center also offers an income calculator that can help you determine the median income in select U.S. small towns.

Taking the time to consider these questions and do your research will help ensure that you select a viable business model likely to succeed in your chosen location. Beyond this, it's also important to consider your personal skills, assets, and resources when choosing a fitting business. For example, if a small town could benefit from a bakery, that's great. If you have zero experience baking, however, this may not be the business model for you.

12 Ideas for Small Town Businesses

There are many ways you can make money with a small town business. Here are 12 ideas to inspire you. Note that many of these businesses, from hair salons to liquor stores, require special permits. Always check relevant state laws to confirm which licenses you may need. This list isn't exhaustive and there are many other opportunities beyond what's described here.

General Store

A general store is a one-stop shop that can sell everything from food to household supplies. Most small towns don't have major retailers. A general store can be a great way to fill this unmet need. You can tailor your stock depending on what's missing in town. For example, if there's no stationary or office supply store, paper goods like envelopes may be appreciated.

Gas Station

Gas is a product that's always in demand and needed in every community. Small town residents in particular are reliant on gas-powered vehicles because they rarely have access to alternative options (e.g., public transportation). A car wash and cleaning service is a great add-on for a gas station. This business model can also be combined with a convenience store selling basics like snacks and personal hygiene supplies, providing another revenue stream.


A new and unique restaurant can be a welcome addition to a small town, giving the locals a fresh dining option beyond fast food or chain restaurants. When developing your restaurant concept, consider the market. If there are already two pizza places in town, a third likely isn't needed. However, a sit-down, farm-to-table restaurant could be a winning alternative — especially in rural towns with easy access to fresh produce, meat, and dairy.

Liquor Store

If a small community doesn't have a dedicated liquor store, you have the opportunity to corner the market. To ensure success, consider which beverages are in demand and stock up accordingly. You can help generate business by offering discounts on bulk purchases. You might also consider serving as a supplier to other local businesses like bed and breakfasts, restaurants, and diners. You will need the appropriate license to sell alcohol to proceed.


Hair salon and barbershop services are another essential element of everyday small town life. If you want to grow your customer base, you can expand beyond basic hair cuts and styling. For example, a beauty salon for women might also offer manicures and pedicures, eyelash extensions, waxing, facials, and makeup services. Note that you will likely need a cosmetology or barber's license to practice these trades.

Drug Store

Be a part of creating a better health care environment and become a valuable asset in your community with your own drug store. Pharmacies continue to be health care destinations, especially in rural areas. Pharmacies make money by buying low-cost bulk prescriptions from pharmaceutical suppliers and then selling them for a profit. To operate your own drug store, you need to have proper pharmaceutical training or a medical background.

Ice Cream Shop

An ice cream shop offers small town residents a relaxing place to have a treat. New ice cream flavors are always being invented, which makes this an ever-growing business opportunity. Consider how you might expand beyond basic ice cream — for example, by catering ice cream cakes for special occasions. Also, consider how to sustain in the winter, when demand for ice cream declines. You might convert to a coffee shop and sell hot drinks, for example.

Gym/Fitness Center

If exercise is your passion, a gym could be a successful business option for you. Physical fitness is important to maintaining physical and mental well-being. Establishing a gym allows you to create an environment that helps your customers feel their best. Consider what type of fitness center you want to open. Will it be a regular gym or specialized in a niche, like weight training, Pilates, or spinning?


A laundromat is a high-demand concept in communities where many people don't own a washer or dryer. This can be a lucrative type of business because it doesn't require much investment in terms of ongoing staffing. However, there are significant startup expenses (buying the machines and renting the property) and ongoing maintenance costs to consider.

Hardware Store

A hardware store sells building materials, tools, electrical supplies, landscaping supplies, and more. A booming housing market is likely to create significant demand for such items, which can be used for home improvements. Some hardware stores may also double as garden shops, selling goods like fertilizer and seeds. Consider how you can tailor your new business to the town. For example, if there's a big agricultural community, it might need farm supplies.

Floral Shop

If the thought of brightening someone's day with a beautiful bouquet of flowers makes you smile, a floral shop is a great business option for you. Flowers are always in demand and a florist's shop can be an especially profitable business around holidays like Valentine's day. Consider expanding your florist shop to meet other special occasion needs by selling goods like balloons and greeting cards.

Real Estate

Many people want more space beyond the confines of a densely packed city. As a result, more Americans are seeking housing outside of urban centers. The uptick in work-from-home jobs has further supported this shift. Smaller cities are diversifying and growing. This is a prime time to enter the real estate market, as people are increasingly looking for houses in smaller towns.

Manage Your Small Business Finances With Skynova

Has the above list of great business ideas inspired you? Fantastic. Before you proceed, get organized by writing a business plan. The U.S. Small Business Administration (SBA) details what you should include, like a product/service description, market analysis, and financial projections. With this comprehensive document, you can also determine your startup costs.

When it comes to managing your small business's finances, you'll want to keep track of your income and expenses. Careful money management will help you ensure a steady cash flow and avoid unexpected financial setbacks. Skynova's accounting software can help you create detailed financial reports, monitor income and expenses, and track invoices. Skynova also offers business templates that can help simplify your business management.

With these kinds of products, Skynova helps small business owners like yourself find success.

Notice to the Reader

The content within this article is meant to serve as general information about founding a small town business and may not apply to your specific situation. When starting a business, always consult a professional accountant on how to manage your costs and implement bookkeeping best practices.