Report: Rural small business owners feel uncertain about future

More than half of rural small business owners feel uncertain about the future of the economy, although many small business owners in both rural and urban settings say their businesses have bounced back from the Covid-19 pandemic, a new report shows.

The report, “Main Street’s Megaphone: The Small Business Rural/Urban Divide,” found that rural entrepreneurs are more likely than non-rural entrepreneurs to say that demographic trends are affecting their business. Rural businesses are hurting workers, the report found: Population shifts are creating challenges for small rural employers, with more than a third (35.9%) saying their areas have few qualified workers.

“The biggest challenge facing modern rural communities is that by their nature rural communities have small populations,” said John Mozena, president of the Center for Economic Accountability, a tank whose ideas promote free-market thinking and who was not involved in the report’s methodology but serves as an external Sources talked about it.

Mozena said one aspect of the report that surprised him a bit was the number of people who still don’t have broadband. The report found that rural entrepreneurs (19.2%) were twice as likely as non-rural entrepreneurs (9%) to view broadband/high-speed Internet access as a technological challenge. At the same time, small businesses in rural and non-rural areas say they face challenges with a lack of technical knowledge or assistance.

“I know, obviously, there are still a lot of places in rural areas where broadband is a real challenge, if not completely unavailable,” Mozena said. “I think it’s better than it looks in the report, just based on the number of employers who are talking or small business people are talking about it being a challenge.”

Mozena added that many small businesses and entrepreneurial activities started during the pandemic.

“During and after Covid, there was an unprecedented number of small businesses forming,” he said, adding later: “You know, I said rural people discovered what we now call the gig economy before anyone else. Anyone who’s been in rural America for a while knows that’s the way it is … people have two, three or four jobs.”

The study surveyed entrepreneurs who agreed to be contacted for research. From the overall list of 37,055 individuals, 3,476 completed the survey, for a response rate of 9.4%. Because the research was designed to capture the voice of current business owners, respondents were asked to identify their current stage of business. After screening, 3,345 people were identified as current or emerging business owners. Of these responses, 882 (26.4%) claimed to own rural businesses, which are defined as “typically located in towns and along state highways, away from metropolitan centers; in areas with a population of 50,000 or less.”

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