How Small Towns Can Grow Small Businesses

CHICAGO (MainStreet) -- There are plenty of positives to being a small business in a large pond. Start-ups that launch in or near big cities can market themselves to millions of potential customers, join networks of like-minded business owners and take advantage of training and mentoring programs run by local community colleges and professional associations.  

A business that starts up in rural America, on the other hand, would seem to face larger hurdles to success. They don't have access to the same kind of customer base, for one thing, and they have far fewer opportunities for peer-to-peer camaraderie.  

But that doesn't mean the large stretch of the United States between the East and West coasts lacks entrepreneurial drive. In fact, a study commissioned by the Small Business Administration in 2008 (pre-downturn) found that rates of business openings and closings were nearly the same for rural, suburban and urban areas.  

In summary: Americans who live away from urban centers are just as likely to start businesses as their big-city counterparts.    

But they've been just as hard-hit by the slowdown in the U.S. economy. And when it comes to getting a helping hand, rural small-business owners are often overlooked, as programs such as Goldman Sachs'(GS) 10,000 Small Businesses focus their outreach in major cities.  

Across the country, though, nonprofits and community groups are promoting rural entrepreneurship through a variety of programs. Last week, the U.S. Department of Agriculture announced grants to 41 organizations for job training and business development in rural areas. The Iowa Economic Development Authority got $200,000 to help restore and revitalize downtown commercial districts in small towns; another $200,000 grant went to a California group to provide training for Native American tribes interested in developing forest-related businesses.  

One model of development, known as Enterprise Facilitation, has been tested in a few different states that have been losing population in rural counties. The collaborative, community-based program harkens back to the pioneer-era spirit of barn raising: a single person can start a business, but it will grow and prosper only by drawing on the skills and effort of a supportive group.