Go Big by Starting Small: Why Small Towns Are Good For Business

Small Town

Entrepreneurs often go for big cities, believing that they’ve got a bigger population and more jobs mean that they’ve got a broader market and better foot traffic. However, a lot of businesspeople think the same way, and it ends up with numerous businesses competing for each other and/or market saturation (meaning that the market no longer has new demand for the product or service).

As such, a lot of businessmen and experts have started looking towards smaller towns and cities. Not only is the market unsaturated, but it’s been observed that smaller towns can offer bigger advantages and benefits for entrepreneurs.

So whether you decide to take a shot at fast food franchise opportunities, or start your brand, you should take a look at the advantages that small towns can offer for your business:

Cheaper Startup and Operational Cost

Business in a big city also comes with a price tag. The cost of goods and services are relatively higher as compared to small cities; anything from raw materials, ingredients, construction, and even utilities cost a lot more, which means that you’d have to invest a lot more when starting up, and your overhead and operational cost would be higher as well. Not to mention, big cities usually have higher taxes that could eat away at your profit. This isn’t to say that big cities are bad for business; big cities have more people that usually have higher earning capacity, so it balances things out.

man in his startup resto

However, if you only have a modest budget or wouldn’t wish to invest your life’s savings into it and take a huge loan, small cities are the best places to start. Not only do small cities have lower taxes and lower costs for goods and services, but they also have a lower cost of living which would be quite convenient for you if you decide to live where your business would be at. And ultimately, lower cost means high income, lower risk, and lower losses, in the unfortunate event that the business should fail.

Less Competition

As mentioned earlier, the big city attracts a lot of businesses, not just you. So you’re bound to end up competing with a LOT of other businesses, which not only makes it hard for you to keep up, but you’d be continuously pressured to stand out. But with a smaller market comes fewer competition, and you’d even have more leeway to experiment with your business (i.e. you’re in the food industry, you could introduce other items on the menu and see if it clicks, or even try and change your business model or marketing scheme). Also, if you’re the “first” in a small town, you’d have the market for yourself; imagine being the only pizza parlor in town, or even the first fast-food franchise in the city. Lesser competition means more opportunities.

Loyal Workforce

In the big city, there’s a higher turnover rate for employees. It’s possible that your best employee now could be working with your competition the next month or so. But in small towns, your employees are more eager to pursue new opportunities such as your new business, and re most likely to stay with you for a more extended time.

Conclusion

With all these advantages, it’s safe to say that there’s a lower risk of failure with a higher chance for your business to thrive. Not only that, if you’ve been living in a big city, perhaps relocating to a smaller and quieter town would have a bonus of improving your quality of life. So, if you’re ready to venture into business, you’d better start doing your homework and find the small town that might give you your big break.