The challenge of rural entrepreneurship

Rural entrepreneurs and small town businesses face extra challenges including online competition, limited workforce and even finding a usable building. Today, creative entrepreneurs are using new innovative business models to overcome these challenges and start businesses that reshape their communities for the better.

What you’ll learn – Start Smaller in Your Small Town

Photo by Becky McCray

At SmallBizSurvival.com from Nov 13-19, 2023, you’ll discover articles, short videos, audios and more free resources focused on how smaller small businesses can succeed. Learn the Innovative Rural Business Models and uncover hidden opportunities, like business inside a business and more.

Contributors Becky McCray and Deb Brown will share their own entrepreneurial experiences, stories from international rural entrepreneurs and their materials from SaveYour.Town and Building Possibility.

Find this and other Global Entrepreneurship Week events listed on the official calendar at GenGlobal.

Once we get going, you can see all our stories tagged with Global Entrepreneurship Week here.

Share your own story

You can add your own story, too. What have you learned about rural small business? What’s working in your own business and your own community? What have you learned to avoid?

Leave a comment or use our contact form to share, and I’ll reach out to follow up.

This is global. Stories from anywhere rural are welcome.

Subscribe to SmallBizSurvival

With the rise of remote work, more people move to small towns even temporarily to work remotely. Small town businesses have the opportunity to tap remote workers as new customers.

Why remote workers are hard to market to

New residents who work remotely can be hard to find: they aren’t all working at the same place, and because they may see themselves as only temporary residents, they may not participate in the traditional events or organizations in the community.

Here are some suggestions to connect with them:

1. Partner With Other Businesses

One of the best ways to reach remote workers is to partner with other businesses that cater to them. Co-working spaces provide a place for remote workers to network, socialize, and work collaboratively. By partnering with a co-working space, businesses can host events, offer discounts or promotions, or simply use the space as a way to meet and network with remote workers.

Similarly, apartment owners and real estate agents can be great partners for small businesses looking to reach new residents or attract remote workers to their communities. Don’t forget about AirBNB hosts. Many remote workers are transient, and they may be looking for short-term housing while they explore new communities.

An informal co-working event like Jelly can help welcome remote workers to your community. Photo CC by Sheila Scarborough

2. Welcome Remote Workers to Your Community

Small businesses can also market to remote workers by welcoming them to their local communities.

Hosting events, workshops or meetups can be a great way to connect with remote workers and show them what your community has to offer. By providing a welcoming and inclusive environment, small businesses can build relationships with remote workers and foster loyalty.

Participating in existing community events and festivals is also smart. Remote workers often look to local events for chances to socialize and be part of their temporary or newly-full time residence. Small town businesses should already be participating in local events to reach locals and tourists!

3. Be online and market online

Having a social media presence on at least one channel is essential for small businesses looking to reach remote workers. Facebook, Instagram, and Twitter are all great platforms for connecting with potential customers.

Email marketing is also an effective way to stay connected with remote workers. By collecting email addresses through in-store sign-ups or online forms, small businesses can keep remote workers updated on events, promotions, and new products or services.

Want to recruit remote workers to live in your town?

The 3 major factors are incentives, flexible workspaces, and a sense of community.

And here’s how to recruit new residents, remote workers, or remote entrepreneurs by figuring out what makes your town attractive.

Subscribe to Small Biz Survival

Empty lots in your town’s core are the biggest first opportunity for improving the rural housing supply. Photo by Becky McCray.

The only housing “best practice” that really works for every town:

Keep renewing your town’s core

No one likes a mushy core, in an apple or a small town. Build more in the center, less on the outside.

Grab a paper map of your town and a highlighter. Circle the oldest neighborhoods, the ones closest to your downtown or town center. Those are the areas to focus on.

There are two important reasons:

1. Make the most of your existing infrastructure. 

You already have water and sewer and streets in the core. You’ll make more of your existing infrastructure investment when you replace and renew the existing housing close to it.

2. Draw your community closer together.

People who live close to the core can walk and bike more to run errands. They can go downtown for shopping and events more easily. Parking at downtown events is less of a problem when more people can walk from their homes in the core area close by.

How to renew your town’s core housing

Find the empty lots within your existing core residential areas. Highlight them on the map. Use different colors for privately owned lots, ones held by banks or other organizations, and ones currently owned by governments at any level. You’ll probably find several that ended up in municipal government ownership after an owner failed to pay taxes or failed to maintain an old house.

Pick another color for empty lots in the core housing area that are only used as parking or storage. (Look next to churches and businesses.) You might have to get extra creative to find ways to put them back into housing.

Then get together and brainstorm ways you can promote homebuilding in the core. Here are some starter ideas that might spur your thinking:

• Make people aware which lots in the core are available for building right now.
• Offer incentives, like waiving utility connection fees for close-in lots.
• Sell empty lots in the core at low prices.
• Remove zoning barriers to adding new structures or accessory dwelling units in your housing core.

Add your ideas in the comments or send us an email.

Send us pictures if you put up signs: “Fabulous homebuilding location! Close to downtown!”

Find more ideas for small town housing issues in our video, Improving Rural Housing: An Idea Friendly Approach

A “micropolitan area” is US term for smaller metropolitan areas between 10,000 and 50,000 people.

• Micropolitans provide shopping and services to their core population and even more rural people in surrounding regions.
• About 27 million US residents live in micropolitan towns. 

Nanopolitans are towns with between 1,000 and 10,000 people.

• Nanopolitans serve as smaller regional centers.
• The range of retail and services varies depending on the sparsity of surrounding rural areas. 
• An estimated 21 million US residents live in nanopolitan towns of between 2,500 and 10,000 population. 

Towns under 1,000 are picopolitan areas.

• Services, trade and economic status of picopolitans varies widely. 
• They are most important in sparsely populated areas. 

With a population under 12,000 people, Woodward, Oklahoma, is a small micropolitan area. Photo by Becky McCray.

By Becky McCray

Why smaller urban areas matter

The US needs a secure food supply, ongoing conservation and restoration work in natural areas, reliable production of natural resources and controlled access to nature for recreation. That means we need people living in small towns and rural places, and those rural people rely on micropolitan, nanopolitan and picopolitan areas to provide services and support necessary for their everyday lives.

Micropolitans

Micropolitans are key to rural America’s prosperity. They are regional centers of employment, higher education, retail shopping, health care and other essential services for tens of thousands of rural people in their trade areas.

• Micropolitans gained attention in 2020 and 2021 as people relocated from dense urban areas to less crowded urban places, leading to the term Zoom Towns for attracting more rural remote workers.
• Economic developers have started paying more attention to micropolitans as big opportunities for business growth.
• With over 500 of them, not all micropolitans are the same. Some micropolitans are stronger economically than others.

Nanopolitans, picopolitans

Small towns between 1,000 and 10,000 people nanopolitans, and towns under 1,000 are picopolitan areas.

These towns serve as regional trade centers with limited retail, employment and services. These smaller centers often rely on nearby micropolitans for a more expanded set of services, especially higher education and health care.

The further people are spread apart in surrounding areas, the more these small population centers play a driving role in their regional economy. The further communities are from major metropolitan or larger micropolitan areas, the more the people will rely on their small population centers for services.

• Economic developers are paying increased attention to the opportunities in nanopolitan towns and picopolitan towns.

How many people live in nanopolitan or picopolitan towns?

It’s hard to say for sure, because there are no official government definitions of these terms. Also, the Census Bureau definitions of rural vs. urban places and the Office of Management and Budget definition of core urban areas don’t line up.

By taking totals from different and not necessarily comparable reports, at least 21 million people live in smaller towns between 2,500 (the upper limit of “rural” for the Census Bureau) and 10,000 (the lower limit for “micropolitan” for the Office of Management and Budget).

‘Micropolitan’ Official definition

The term “micropolitan” has only been used by the US government since 2003.

Micropolitan is defined by the US Office of Management and Budget as a concentrated or core urban area with at least 10,000 people but fewer than 50,000 people. A micropolitan area includes this core urban area, its central county or counties, and any adjoining counties that contribute a significant number of commuters. Officially, there are more than 540 micropolitan areas with a population of over 27 million. Here’s the US Census Bureau page on Micropolitans.

In January 2021, the Office of Management and Budget proposed raising the minimum size for a core metropolitan area from 50,000 to 100,000. That would cut 144 cities out of metropolitan status and reclassifying them as micropolitans, affecting 18 million people.

This would cause a complicated set of changes, as the affected cities would no longer qualify for a whole range of US federal programs, but might qualify for other programs targeted to non-metropolitan areas. There is no one list of all the federal programs and funding streams that would change for the individual cities.

Will this reclassification happen? Since it was a last day proposal by one presidential administration, it may or may not be taken up by the following administration.

If that does happen, the term “minipolitan” could be applied to towns between 50,000 and 100,000. (“Mini” is sometimes applied to larger values than “micro” when used as a size prefix.) Maybe that’s why the OMB started their classification of smaller-than-metropolitan areas with micropolitan, leaving room for an eventual minipolitan classification.

Subscribe to Small Biz Survival

Two small town guys, Scott Duehlmeier and Chris Brogan. Don’t check your accent at the door. Photo by Chris Brogan.

By Chris Brogan

I’m originally from Maine. Accents up there come through the nose. Most famously, people from Maine are supposed to say “Ayuh” when we mean “yes.” Midway through high school, I moved to Massachusetts, where you lose the nasal thing, but you also lose all “r’s” from conversation. “It’s hahd to sound smaht with a Boston accent.”

Like all people of a certain age and worldly intentions, I hid any trace of an accent in my professional life. Some people even guessed that I was from Canada. (I’ll take it!)

It Might Be Time to Drag Our Accents Back Out of Hiding

Listen, if you’ve heard Becky talk even once, you know she’s from Oklahoma. And unlike me, Becky has been proud of her accent every step of the way. She’s probably better suited for this next spin of the earth. Why? Because the world seems to be poised to want everything smaller again. At long last.

Small town and local purchases have been on the rise since the start of the COVID-19 pandemic. On the one hand, that comes from necessity. On the other, it’s a concerted effort of people wanting to put their small town dollars back to work in the small town where they’re from to keep people in business and keep workers on the job.

Who you are and where you’re from just became a selling point again for the foreseeable future.

Putting the Folksy Back in Folks

Maybe the world got too big for a minute. Have you seen those stunning photos of how rivers and streams and even cities look so much more beautiful and crisp and clear now that cars have been parked in driveways for a few months? Sure, we need to get back to work. But do we need to fly all over creation? Do we need to take every trip we used to, just to get bigger and “better?” If we don’t need to drive to an office in the big city to work every day, where do we want to live?

Tourism is very hard hit during the pandemic. Being from Maine originally, people head up there in summer for seafood, and in fall to see the leaves. Boston is a pretty busy tourist attraction year round because of its ties to the American Revolution and its five professional sports teams. All that business is shut down now, but it won’t be forever. And what will people want when they come to visit? They’ll want a very genuine (completely fake but the way people want to remember it) experience.

Should You “Y’all” in Your Email Marketing?

Ah, the $44.93 question. Our accents and our quirks need to always be the condiment and not the meal. No one goes to a restaurant to order a plate of ketchup. You can slip a little phrase or two into your business communications, but if your writing ends up looking like a long lost script for the Beverly Hillbillies, maybe take it back a notch or two.

In the end, I say yes. People want us to be a bit more personable and regional. But sprinkle it on, don’t dump the bag on it all. Because as we’d say in Maine, you can’t get theya from heeya. (Which means about as little as it sounds like it does.)

Restarting Local Shopping

If you’re working on restarting people’s local shopping habits, take a gander at the new SaveYour.Town video called Restarting Local Shopping.

Before you write that plan, why not try a pop-up of your business idea? Even in your own front yard you can learn more than you will staring at a computer screen. Photo courtesy of Shawn’s Kettle Corn, Webster City, Iowa. 

by Deb Brown

At least, the old way of doing them

Writing a business plan is an intense project that takes up a lot of your time. You spend weeks and weeks on it, and you’re not even sure everything in it is correct. Your financial projections are just wild guesses. You’re not even open and they want you to guess how much money you’ll make! You can find out the amount of traffic that goes by your proposed location. But just because 10,000 people travel down that road doesn’t mean any certain percentage of them will be guaranteed to stop. 

What if you waited and wrote your business plan after you’ve run a few tests? 

How do you test out your products and market without having a brick and mortar business? 

Participate in a pop up event or two

Small towns have these kind of events. Car shows, town fairs, three day events for fun, goat eating contests, celebrations and many other kinds of parties. You can set up a table and a covering and sell your product. 

Do track your sales! It’s as easy as counting inventory at the beginning and at the end. Write down if you had to drop the price. Write down suggestions people give you for similar products they’d like. You’ll begin to get an idea of what products people like.

Try a longer pop up.

Does your town do seasonal popups in empty buildings? It’s worth asking the building owner to do that! You could partner with other entrepreneurs and give it a try.  

Again, track sales, price drops and suggestions. If possible, track the  number of people who came in the building. 

Let’s not forget online selling

Etsy, Amazon, eBay, Poshmark, Craigslist, Facebook Marketplace, eBid, and Ruby Lane are a few places. Be sure to choose the right site(s) for your type of product.

Many of these sites will do the tracking for you! If not, track them yourself.

Shared spaces

Is there a place in your area that has more than one vendor in the location? See if you could join them. This is a shared space, and they are operated in different ways. Some have one cash register, some have each vendor with a cash register. Both have been known to work. Get the details and see if they work for you. 

As you track results, don’t forget to write down your market

Who is buying your product? 

As you are trying these ideas (and making money) pay attention to the people who shop with you. Do they fall into a certain age category? Are they male or female? Of a certain social strata? This is all research for the kind of people who make up your market. 

Where do these people live? What do they look like? How old are they? What gender are they? Are they different nationalities? Where are they shopping for similar products? Are you satisfying a need in the marketplace? 

After this time of tracking sales, places, and people you’re really ready to begin writing a plan.

The difference is you’ll have actual figures and not made up ones. You’ll also want to write about your products, competition and staffing. You’ve already got the answers for these topics too.

You have everything you need for a simple business plan. You can show the banker, if you need one, exactly what you’ve been doing as you build your business. You’re not putting your dreams and wishes on paper. You’re putting facts and figures and proof that your business is working. 

Our next video is Before You Write Your Next Plan and you’ll hear about real people in real towns who are not writing business plans the old way anymore. 

Shop Indie Local summary:

• Shop Indie Local campaign website

This campaign’s advantage: 

• Usable year round, adaptable to local events and needs, not just a single day
• “Indie” message is resonating well right now, better than plain “local” campaigns

Share the right message:

• People already think they want to shop local, just need a timely reminder
• Tell stories of merchants, focus on independent businesses

By Becky McCray

We’ve long been advocates of shop local campaigns. Our communities prosper when we do more business with each other. But tired old “you should shop local!” messages are worn out. We need new fresh messages that recognize where we are today.

The best fresh message I’ve heard is Shop Indie Local, put together by a coalition of local-focused organizations including American Independent Business Alliance and sixty partners throughout North America.

“Shop local” is tired

After years of working to convince people that local businesses matter, we won that battle. Survey after survey shows that people want to shop local, intend to shop local, and feel good when they shop local. That doesn’t mean they do it consistently. They do at least aspire to it.

Old messages that admonish shoppers are worn out.

In fact, we’ve gotten to the point of backlash. People are tired of being admonished especially when local businesses fail them. I think this is especially true in small towns, where there are more than a few small business owners who act just a little too entitled.

What not to say

That means you can banish any of the following tired messages from your shop local campaigns:

• Shop Local! Buy Local! Think Local First! Stay Local! Eat Local!
• You owe local businesses!
• If you don’t shop local, you’ll hurt the community
• Local businesses return more money to the community
• We need your sales tax dollars!
• Shop local or local businesses will fail
• 10 reasons to buy local (no matter what the reasons are) 

Remember, we don’t have to convince people. They’re as convinced as they’ll ever be.

What works now: prompts

We won the battle on convincing people that they like local. What we need are prompts, or reasons to act right now. You could also call this a “call to action.”

I took the term “prompts” from the Fogg Behavior Model.  To get any Behavior, a person needs enough Motivation to act, enough Ability to act and they need a Prompt to get them to act. People are Motivated to shop local, at least they tell us they are in surveys. People are Able to shop local, or if they aren’t, we can’t change that with this campaign. What we can do is Prompt them to act on their beliefs right now.

Fresh ‘shop local’ messages to try

Some of these ideas have been around awhile, but they still feel fresh because they act as a Prompt, reminding people that they want to shop local and that they can shop local and that now is a great time to do that.

• Did you know you can buy this (specific thing) at (specific store)?

This is a targeted prompt. If you want to buy this thing, you can buy it here.

I bet you didn’t know you could buy hardware at the grocery store! This kind of message prompts people act on their aspiration to shop in local stores.

Especially in small towns, we don’t realize all the things all the stores carry or all the services we can get locally. I didn’t realize how much my own local stores have diversified, and probably your local customers don’t realize it either.

Waynoka, Oklahoma, did a “Where is it” Wednesday series showing off surprising offerings in local stores. You can do this all year round.

• Profiles and stories of local independents

Local businesses have compelling stories, ones that can help prompt people to shop there.

This is a more general prompt. It tells people, “You like this person, and now is a great time to shop with them.”

Luling, Texas, did this with a series of Homegrown business profiles. This is another project that you can do any time of year.

• Pick one product: toilet paper

If people buy their toilet paper locally, it’s a prompt to buy more locally while they’re in the store.

This is another specific prompt, using a single product to prompt people to act on their desire to shop at local stores. You’re helping them act on their values when you say, “You need to buy this regularly, you can buy it locally, and you’re going to end up buying more things at the same time.”

Toilet paper is a great choice because everyone needs it, lots of different places carry it, and the jokes just keep on rolling… (sorry) Honestly, a sense of humor doesn’t hurt.

Deb Brown shares how Greater Franklin County, Iowa, did this in this podcast episode. (Toilet paper starts around 10 minutes in.) Again, you can do a project like this any time of year.

Tap national campaigns: Shop Indie Local

It makes sense to take advantage of effective themes created by big campaigns, rather than have to create your own from scratch. My favorite national campaign is Shop Indie Local.

Why isn’t Shop Small Saturday my favorite? 

It’s only one day, and it’s a day when a lot of people leave to shop in the big city.

I do like all the attention that this brings in national media, and everyone loves free stuff like tote bags and doormats.

It also comes with restrictions on the kinds of businesses that are supposed to be allowed participate. As a local organizer, this could put you in an awkward position if your local vape shop, liquor store, custom knife maker or sporting goods store wants to join. I’d rather leave the decision of who can participate up to you, not lawyers who’ve never been to your community.

American Express charges a higher fee to local merchants on customer transactions than some other card issuers. The difference isn’t huge, but some people focus on it.

Given all the pros and cons, you may consider joining in on Saturday but not making it the only campaign in your community.

Why is Shop Indie Local my favorite? 

I informally asked some friends who are regular everyday people, like your customers, what they thought of Shop Indie Local. They loved it. They felt like the addition of “indie” made it fresher and more relevant to them.

You can use the Shop Indie Local message year round, not just one single day. You can adapt it to your local needs and use it at any local events. You’re not expected to comply with restrictions on what kind of businesses can participate or what kind of message is approved. This is much more flexible for you.

How do you use Shop Indie Local? 

Stick with the fresh messages we just talked about like “did you know” and indie profiles, but add Shop Indie Local to them.

Add the hashtag #ShopIndieLocal to your social media posts anytime. Like, comment and share other posts with the #ShopIndieLocal tag, even those outside your community.

Use the Shop Indie Local logo in your local campaigns.

Take advantage of ready-to-use graphics like this rather than start from scratch.

How will you refresh your shop local message this year?

Feel free to share in the comments, tag us on social media, or send us an email. We love to hear and share your great ideas.

New to SmallBizSurvival.com? Take the Guided Tour. Like what you see? Get our updates.

Is there any good news about small towns? Do small towns have a future for our young people? Photo of youth at Eagle Butte, South Dakota via USDA

Guest post by Paula Jensen

I remember in 1997, just following the birth of my second son, when more than one elder in my community told me, “It is so sad that your children will never graduate from Langford High School like you did!”  Those comments told me that the local leaders were questioning my decision to return to my hometown and had lost all hope in their community and themselves. Well I am pleased to say, now 20 years later, that the prediction made by those folks has not come true. I could go on and on about the growth, development, and community pride that has erupted across Marshall County, South Dakota in opposition to those dire comments made two decades ago.

Echoing what Becky McCray says, pretty much all my life, I’ve been told that small towns are dying, drying up, and disappearing, and that there’s nothing we can do to change it. But what if, just once, there was some good news about rural communities? Guess what, there is! Big trends are moving in our favor:

Trend #1 – brain gain (youth returning home after getting education)

Trend #2 – changing retail dynamics (entrepreneurship is on the rise)

Trend #3 – new travel motivations (people love getting away from the city to visit)

Trend #4 – declining cost of distance (people can work from anywhere)

Trend #5 – creative placemaking (adding quality of life amenities to our towns)

During most of my years in Marshall County, the population has followed typical national trends. In 1970, Marshall County had 5,885 people; we hit our lowest population mark in 2009 at 4,160, which was a 30% decline in our county-wide population. However, since 2009 our county-wide population has reached 4,801, which shows a 13% gain in population.  Our trend line is moving upward and this is uncommon in rural places from a national perspective. In my day-to-day work across rural South Dakota I have observed pockets of growth in other rural communities, much like Marshall County. The commonalities I witness is that these unique rural places have strong leadership and care about what their small town will look like in 30 or 100 years from now.

I recently sat in on a webinar where Zachary Mannheimer was a featured speaker discussing Creative Placemaking: Economic Development for the Next Generation, co-sponsored by the Orton Family Foundation and the Citizens’ Institute on Rural Design.

What is creative placemaking, you ask? Zachary Mannheimer defined it like this, “Basically, it means, how you enrich a community through cultural and entrepreneurial ideas.”

For the most part he explained that it’s been done in urban areas, but not a lot has been done in rural areas.  He identified the future population trends that are emerging and how he sees the future of our country moving toward rural areas because of urban population growth and they are running out of space. Places that were once out in the sticks are going to be part of urban areas. This is going to be happening in the next 30 years. Is your small town prepared? If we aren’t prepared for the shift, we are going to lose out on potential social and economic growth. Rural city and county leaders, economic development corporations, and others need to begin planning to adapt now and create amenities that people are looking for or we will struggle to remain a vibrant rural community.

My County is on the right track with new development, entrepreneurship, strong philanthropy, inclining population, strong schools, recreation opportunities, and so much more. But we must all step up as local leaders to support improvements and growth. Our small towns don’t need to spend any more time in the past. Things will never go back to the way they used to be. We need to start from here and keep moving forward toward a bright future that provides opportunities for our youth to return and a place where new residents want to live and contribute. Enormous changes are coming our way in rural places and our future has never looked brighter. Let’s lead the way and extend the life expectancy of our community! #Iamrural

This week at SaveYour.Town, we’re sharing how to take big empty buildings and divide them up for multiple small businesses. One model is co-working spaces, which offer shared office and workspace. Then our friend Jon Swanson sent us an article on rural churches doing innovative things, including one doing a co-working space. This seems like a perfect fit for some small town churches.

The article is by Allen T. Stanton: Rural churches can thrive beyond numbers. The example he gave was First United Methodist Church in Sanford, Florida, which he describes as “a small city outside Orlando.”

Stanton listed questions that a pastor named Meghan has started asking about their role in the community. “What are the needs we can meet?” and “What does it mean to be a leader in this particular community?”

That’s where the co-working space for non-profits idea came up. So far, the non-profits include food-based programs, support groups and entrepreneurial initiatives focused on justice.

“All of these groups were trying to find ways to work together,” Meghan said. “We want to find ways for our church to help in that.”

Think about the churches in your small town. Are any of them asking questions like this? Are any sharing their buildings with outside groups or another congregation?

New to SmallBizSurvival.com? Take the Guided Tour. Like what you see? Get our updates.

Small Town Competition (CC) by Fritz Ahlefeldt, on Flickr

In the business world, minimizing the competition may seem like a good idea.

Yet research and reality have found that competition actually may strengthen a market for the competing business owners. Studies have found that as competing businesses move closer together, both increase their returns. Think about it: Wal-Mart and Target often will be closer together than you might expect. Coffee shops and fast-food restaurants also locate in the same areas.

These examples occur because of the positive relationship resulting from economic or business clusters. These relationships, while not a perfect correlation, occur more than what you would expect. They also occur even if similar types of businesses are grouped together for other reasons, such as they are along a highway interchange or in a mall or business center.

People wonder why this happens. One important reason is that you are establishing the area as a destination, one location where you can look at and shop for a specific type of good or service. No longer must one drive from one location to another because things are grouped together.

Other advantages of clustering may include easier connections with suppliers and/or trucking companies. It also offers choices beyond that of a single store. Business owners may take advantage of joint marketing campaigns and even friendly competitions. For example, several communities have one location for all of the new-car dealers.

Restaurants also have capitalized on this trend. A certain town or an area of a community becomes known as the place to go for food or a specific type of food.

Competition also drives everyone to stay up to date on product lines, store appeal and, most importantly, customer service.

Yet while business clustering often works, you cannot take it as a guarantee. For one thing, communities need to be a certain market size to support two stores as opposed to just one. Obviously, if you can make the area a destination, there still needs to be a certain volume of potential customers to support the supply.

A related concern is the possibility of oversaturation. If one is good and two are better, shouldn’t three or more stores all selling the same basic assortment of goods do even more? Not always. It comes back to total market need.

Finally, one store may have certain competitive advantages that might make breaking into a market difficult, if not impossible, for competitors. Another store may want to locate in the same area, but overcoming that advantage may just keep that from happening.

However, communities should not shy away from developing and encouraging competition. It can have amazing results. And as it grows for one segment, this traffic increase can be used to develop other opportunities.