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Identifying the top threats to rural small businesses, and what Main Street is doing to mitigate issues.

Avatar photo by Casey Woods, Executive Director | April 26, 2023
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In businesses and organizational speak; many leaders use a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats). For those with the mind of an entrepreneur, they understand that a “threat” and an “opportunity” are really the same thing. Both represent the changing nature of the market, but opportunity may be a little clearer in the mind of a community leader, while a threat exists as a known catalyst without an obvious way to take advantage of the change.

Rural economies are different, and studies across several different agencies recognize eight basic “threats” to rural small businesses. We have assembled a list of the eight issues, and what Emporia Main Street is doing to mitigate each one of these threats so your business can focus on opportunities.

  1. Limited access to capital: Small businesses in rural areas often have limited access to funding, which can make it difficult for them to invest in new equipment or expand their operations. Solution: We are extremely fortunate to have several local financial institutions that actively engage in financing area entrepreneurs. It is rare in rural America to have the number of options we have in Lyon County. From an Emporia Main Street perspective, we have worked hard to create Incentives Without Walls and Trusler Business Loan, zero interest programs that match financing from local banks. Emporia Main Street acts as a partner with Network Kansas to offer low interest E-Community Loans, and our staff sits on the statewide Grow Kansas board to provide larger matching loans to entrepreneurs throughout the state. We formed the Emporia Downtown Historic District to facilitate tax credits and grants for building upgrades. We helped lead the charge for the formation of the Upper Story RHID program, have successfully engaged USDA and CDBG programs in downtown, and act as a conduit for both state and private grants for targeted business and building development activities. Emporia Main Street independently facilitates more alternative finance resources for small businesses than any Main Street program in the state and any economic development agency in the region.
  2. Lack of infrastructure: Many rural areas lack the infrastructure necessary to support small businesses, such as high-speed internet and reliable transportation options. Solution: Emporia Main Street continues to work with the City of Emporia, Lyon County, local engineering firms, private businesses, and state/federal agencies to upgrade infrastructure of all types. Our organization was significantly involved with water main replacements processes downtown, initiated streetscape investments, assisted sewer lining/repair upgrades, and worked with other area volunteers to research fiber network development in conjunction with ValuNet startup activities. We continue to work with Emporia State University to leverage access to additional technical pipelines for business expansion, and will work with other regional partners to access private network backbones to facilitate additional technical business development opportunities. Without quality underground infrastructure, above ground businesses will fail, and Emporia Main Street has worked hard to preempt infrastructure dilapidation. Emporia Main Street is currently working to enhance energy production capacity within our small businesses to supplement power and reduce overhead costs.
  3. Difficulty finding qualified employees: Small businesses in rural areas may struggle to find qualified employees due to a smaller pool of job candidates and a lack of training opportunities. Solution: Larger companies have more jobs available (on average), and their independent consistent listings often placed our small businesses at a competitive disadvantage for employees. Emporia Main Street worked with local companies to create a widely used no-cost Jobs Board, generates a “mix and mingle” event for new residents (which helps expose them to amenities and employment options), produces the yearly “Welcome Back Block Party” for FHTC and ESU students (which many businesses use as a conduit for attracting employees). We actively research rural “quality of life” success strategies through the Center On Rural Innovation to attract and retain an employment base, and we often act as a connection point between businesses and potential staff.
  4. Market access: Rural small businesses may struggle to access larger markets due to their remote location and limited transportation options. Solution: Emporia has great transportation options. It’s one of our strengths. However, the inward bound traffic facilitated via good transportation networks is often driven by unique business diversity and effective targeted regional marketing. We work to supplement market access with large scale events that generate visitor interaction with storefronts. Our area has a hard time understanding that no one is going to leave their chain for our same chain, and consistent marketing that focuses on drawing increased business traffic throughout the year is an area where we need to improve. Through better data collection, we have been able to identify specific consumer groups that are more likely to utilize our small businesses as consistent destinations. We are currently testing outreach strategies to determine effectiveness while still staying cognizant of our budgetary constraints.
  5. Dependence on a single industry: Many small businesses in rural areas are dependent on a single industry, such as agriculture or mining, which can make them vulnerable to economic downturns and market fluctuations. Solution: Rural regions are unfortunately known for “top heavy” strategies that put all their eggs in one categorical basket. When the single business category has an inevitable downturn, the system goes into shock, and a downward spiral occurs. Diverse economies that emphasize entrepreneurship are less susceptible to the devastation caused by a single closure or business category downturn. Emporia Main Street promotes business diversity through business training (the Start Your Own Business and E-Tech Startups classes), business finance (Show of Hands, loan programs, alternative finance), and market research to determine market gaps. Emporia Main Street is the consistent leader in encouraging regional economic diversity.
  6. Limited resources: Small businesses in rural areas may have limited access to resources such as technology, business support services, and marketing expertise. Solution: We wrote earlier about limited financial resources, but rural businesses often suffer from a lack of support resources that aren’t simply financial. The development of the Fabrication Lab helps local small businesses with technical support and product development. We have fantastic partners with the Small Business Development Center and local educational institutions that we utilize to promote technical development among small businesses through classes and workshops. We actively work with members in our service sectors to create business support products/services to expand their customer base and generate healthier businesses. Through our access to market specific data, Placer AI customer analysis, and significant staff experience (backed up by numbers) we have the capacity to consult with businesses, with more than just opinions, to achieve measurable results.
  7. Difficulty competing with larger businesses: Small businesses in rural areas may struggle to compete with larger businesses that have more resources and economies of scale. Solution: Through entrepreneurial training, we teach tactics to exploit market niches and generate value beyond pricing strategies. Emporia Main Street has fundraised for scholarships to Destination Boot Camp; we offer state and local design assistance, promote cooperative shopping/dining/entertainment focused events to generate a “business node” in the minds of local consumers, and we work through the Fabrication Lab to develop unique products that can only be found in our local businesses. We run yearly campaigns to encourage shopping with local and locally owned businesses, and our gift certificate program functions as a “local currency” to facilitate small business support.
  8. Lack of dense built environments that facilitate entrepreneurial ecosystems: Entrepreneurs do better in places that have dense groups of other entrepreneurs. Rural communities often engage in sprawl development tactics that deplete regional capacity for place-based entrepreneurial development. Solution: Getting any business started is difficult, and Emporia Main Street invested considerable resources (thanks to local donors) in the development of our incubation space. Through the formation of a historic district, work with local investment/developer groups, and a robust alternative finance portfolio, we have been able to facilitate over $140,000,000 in downtown development to enhance entrepreneurial spaces. We provide a free “Available Property Guide” The development of 300 upper story and downtown adjacent housing units over the past fifteen years has placed consumers in proximity to local businesses. The development of the Hereford Coworking space allows for remote work in downtown. Continued emphasis on enforcement of chronically vacant property ordinances will expand entrepreneurial options. Entrepreneurs do much better across metric measurements (traffic, sales, product/service ideation, employee recruitment, etc.) when they are surrounded by other entrepreneurs. The density created in downtown has resulted in an entrepreneurial hub that supports longevity and growth.

We often talk about problems in rural economies. There are significant amounts of discussions surrounding solutions to rural threats. At Main Street, we want to focus on implementation of strategies and creation of real resources that help mitigate national rural economic trends. Our efforts are a constant work in progress, but know that our daily efforts are focused on creating measurable value for all of you.

About the Author

Casey Woods, Executive Director

Before accepting the director position in March of 2009, Casey worked in both retail and agricultural jobs in the family businesses. A lifelong resident of the Emporia Area, Casey was a ten year volunteer for Emporia Main Street prior to his appointment as director. During that time he served as the board president and chair of the Economic Vitality Committee.

Casey also serves as a partner in PlaceMakers, LLC, a consulting firm that routinely works with both large and small communities, and their businesses, to promote sustainable economic growth through community and economic development practices. Casey consults with businesses, organizations and communities to understand their market capacity and fill vacant spaces. He has been involved in two projects that included crowdfunding as a part of their overall business funding strategies, Radius Brewing and Twin Rivers Winery & Gourmet Shoppe.