It is always interesting to compare overall economic outlook and general business trends with trends in small businesses in rural settings. This year, with the prospect of a renewed recession hovering over the US economy, it is cheering to see that rural small business looks especially promising.
Listed below are the leading five trends for small businesses in small towns and rural communities:
1. High farm commodity prices equals strong local economies: The strong Rural Mainstreet Index is highly influenced by strong commodity prices, boosting farmland value. As investors continue to seek ‘safer’ investment classes a strong foundation for local agriculture-based economies is created.
2. The high price of oil and natural gas gives many rural areas a boon as production is stepped up. Increased production in turn brings new residents, new businesses, and at least a temporary affluence.
3. Movement of money to local banks and credit unions. Big banks are squeezing small businesses as they create ultra-high standards for loan approval. Instead lying of down and dying, small businesses are turning toward friendlier alternative methods to finance growth, which often means bringing their money home to locally owned community banks, and other local investing choices. Check out the book “Locavesting” by Amy Cortese for a description of choices for local investing and business financing alternatives.
4. Continued increase in self-employment and new businesses and start-ups in small towns. One survey showed that young people today have a strong desire to start their own businesses, especially in rural communities.
5. There is a trend away from global outsourcing towards internal ‘ruralsourcing.’ There is strong competition coming from rural areas to bring manufacturing and IT service jobs into rural areas, instead of sending those jobs overseas. As shipping costs and manufacturing costs climb in China, many more projects are returning to with the US, especially in many rural areas.
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