Small Town Businesses That EVERY TOWN NEEDS: 8 Essential Ideas

So you live in a small town and you want to make some money, so you’re looking for some ideas of small town businesses that every town needs.

But you don’t know where to begin. You’re unsure which business ideas would work best to make money in your community and have the greatest chance of success.

Well, we’ve used our own small town roots and some stone-cold money making facts and have come up with seven small business ideas just for you.

These are businesses that every town and rural community absolutely needs to survive and thrive, which makes them excellent prospects for a new entrepreneur looking to make money.

And if you read to the end of the article, we’ve included a valuable bonus small business secret from one of the most successful business people of all time to help you make money and ultimately succeed on your entrepreneurial journey.

But before we get to that secret, we need to answer the question what makes these businesses so essential to small towns in America?

To get that answer we’ll start the countdown with our first small town business money making idea:

(You can also watch the video version of this article below)

Small Town Business Idea #1: Grocery Store

People who live in small towns all need certain basic products and services.

But a grocery it’s an expensive business to get started with pretty low profit margins, which is why we’ve put this business in the number seven spot.

But make no mistake, this is a vital small town business that every town needs.

So here’s some numbers to consider.

Grocery stores and supermarkets are an $800 Billion industry in the United States.

There are over 63,000 grocery stores and supermarkets operating in the U.S., of all sizes.

The grocery business has grown 2.6 percent annually over the last five years.

It is forecast to continue growing by three percent every year through 2030.

So does your small town need this business?

That depends on a lot of factors, including how big your town is and if you already have a grocery store or supermarket.

If you live in a town of a couple hundred people, it could probably support one small grocery store.

Larger towns, or towns with large surrounding rural populations, can often support more than one. Remember, competition is not a bad thing.

But let’s say you’ve done your due diligence and come to the conclusion your town is in need of this business.

What can you expect?

Well, start-up costs are high.

Rent, shelving and initial inventory can run in the hundreds of thousands of dollars.

Profit margins are thin – on average three percent – so you’ll need a steady flow of customers.

And then there’s the secret way to break into small business, including the grocery business – it’s to buy an existing one.

Independent local grocery store owners all have reasons to eventually sell their business, think retirement, divorce, illness, death.

Now, moving to our number two on the list of small town money making business ideas:

Small Town Business Idea #2: Hardware Store

If things need fixing, you start at the hardware store. And everything at some point needs fixing.

It’s why hardware stores are one of the most important small town businesses that every town needs.

People in small towns were DIY before DIY was a thing.

The hardware industry is a $35 Billion business in the United States.

It grew during the last few years because so many people were at home doing renovations, but it’s expected to slow down by 1.5 percent in the next year as things normalize again.

There are almost 15,000 hardware stores in the United States but if you have a Home Depot or Lowe’s nearby, maybe avoid this idea as a small business.

However, if you’re town is lacking a place to get tools and supplies, the average store has a ten percent profit rate.

That’s not bad for retail.

If you can provide reliable products, with helpful, knowledgeable, advice, you’re on to a winning formula to make money from a small business that every community needs.

Another small town business every town needs is business idea number five: Coffee shop and diner.

Small Town Business Idea #3: Coffee Shop and Diner

Coffee shops and diners not only serve an important function – coffee when you need it most and possibly some eggs and bacon – but they also bring a community together.

They give small towns unique and affordable places for residents to meet up and share stories all the while grabbing a quick coffee and bite to eat.

And who would your customers be?

Well, almost everyone.

66 percent of all Americans over 18 years old drink coffee everyday.

The majority drink at least two cups a day and spend $2000 on average a year on coffee alone.

For coffee shops, the profit margin is usually 25 percent on average.

In most towns, coffee shops and diners aren’t fancy establishments.

Simple décor and simple food at decent prices are the name of the game.

Which brings us to small town business idea number four to make money in a small town:

Small Town Business Idea #4: Bar or Tavern

This business is similar to the coffee shop and diner, it’s a small town business that every town needs because it serves several purposes.

First, the most obvious one – it’s the licensed place people can go to have a drink.

But bars also serve as a social place for people to gather.

It’s where people go primarily on weekends to meet up with friends, unwind from the work week and listen to music.

They are also the go-to place for feel-good food like wings and nachos that the local diner probably doesn’t carry.

The U.S. bar and tavern industry is a $26 billion dollar a year business, with the average profit margins coming in at roughly 20 percent.

Your customers will be adult locals and occasional travelers who are looking to relax and have a good time.

But those small town customers can be particular.

If your bar gets a reputation for over-serving or being dirty or for being needlessly rowdy or a dozen other reasons, the customers will stay away.

It’s a delicate balance which accounts for the high turn-over rate in bar ownership.

Basically, you’re trying to provide a fun, social atmosphere, where everyone feels comfortable, while trying to turn a profit selling alcoholic beverages.

It’s also why many successful small town bar and tavern owners already have a background in the management side of things or the restaurant industry.

Those who get into it for vanity reasons almost always fail.

Now, here’s another way to make money in small town with an essential business, our number five idea:

Small Town Business Idea #5: Auto Repair Shop

There are over 264,000 auto repair shops in the United States. That’s a lot.

The auto repair industry is a $68 billion industry in the U.S.

And here’s another important figure – 75 percent of auto repairs are done by small, independent businesses.

The remaining 25 percent are done at dealerships.

Add to that the industry is expected to keep growing by 10 percent through to the year 2026.

Like most of the businesses on this list, you just can’t go out and open it up without some experience.

Being certified by the National Institute for Automotive Service Excellence or ASE isn’t a requirement in every area, but it’s pretty much a necessity to obtain liability insurance.

That said, before you can open your own shop, most areas require you to obtain a general business license.

The exact license requirements vary from state to state and even and county to county.

You’ll need to do some local research with town officials to find out what’s needed.

Start-up costs will be high because there’s a lot of equipment that’s needed for a full shop.

But don’t forget about buying an exiting shop.

The average mechanic in the United States is 40 years old.

That means on the upper end, there are a lot of older entrepreneurs out there running their own shops, who are likely looking for a good retirement exit.

How much money you can make from a business idea like this depends on a lot of factors such as:

How much are you charging for your work?

How long does it take you to complete a job?

How busy are you?

A good reputation is a big factor in how busy your repair business is.

Do you have other licensed mechanics or repair technicians working for you?

All these things and more will determine who much money you actually take home at the end of the day.

Another way to make money is small town essential business idea number six:

Small Town Business Idea #6: Gas Station

Despite the growing popularity of electric vehicles, gas stations are what keeps people in small towns moving and working so they are an essential business.

And it’s highly likely your town has one or more already.

That said, there’s still plenty of older, run down, independent stations out there that are looking for new ownership.

The average profit margin on gas station sales is between 3 and 5 percent, which isn’t very high, but the profit comes from volume and other purchases made at the checkout.

Gas stations are a difficult and expensive business to start from scratch.

Because of the nature of handling and storing fuel, there’s many permits that are needed to run this type of small business so a lot of planning, time and money is needed before you even make your first dollar.

And they are also often paired with auto repair shops, car washes and convenience stores or even bait and tackle shops, depending on if you’re close to tourist country.

Now just before we get to the final idea on our list of ways to make money with essential small town business ideas, we’ve included an extra bonus idea for you to consider:

Small Town Business Idea #7: Hairdressers and Barbers

Hairdressers and barbers essentially do the same thing, but are very different businesses.

For starters, the barbershop market in the United States is a $4.5 billion industry.

By comparison, the U.S. hair salon industry is a $46 billion industry.

What they have in common is both industries are growing and every small town needs them because hair is everywhere.

Hair salons and barbershops are true small businesses and are probably the cheapest to get up and running of all the small businesses mentioned on this list.

But there’s also a lot of competition out there for that exact same reason.

There are over 100,000 barbershops in the U.S. and over 900,000 hair salons.

But keep in mind, a hair salon can be as simple as a single hairdresser working out of their house in a converted room or a full set up on main street with multiple chairs, equipment and full range of products for sale.

Employee turn-over tends to be high in this small business as customers tend to be loyal to the individual hair dresser as opposed to the business location itself.

And that’s further proof of the small town demand for this type of business, when an employee leaves a hair salon, more often then not, it’s to start their own business.

Barbershops tend to be walk-in, not appointment based which makes them informal meeting places.

If you have to sit and wait for your cut, chances are you’re going to have a conversation with people you know and even strangers.

Places like that are harder to find these days and it’s likely why they remain a popular business model after all these years.

Which brings us to the number one way to make money with essential small town small business idea on our list:

Small Town Business Idea #8: Convenience Store

Convenience stores are pretty common, but this type of store comes in many different forms and it’s just assumed you’ll be able to find one quickly and easily.

People love convenience – the convenience store industry has grown 37 percent in the last decade and is still expected to grow more.

Convenience stores mostly cater to quick impulse-type purchases.

Think snacks, drinks, lottery tickets, those types of things.

And they make quite a bit of money because they charge more for those items since they carry less of them in stock and, you’re paying for the convenience as well.

And in a small town, the convenience store can hit so many markets.

It can be paired with a gas station – another small town essential business we’ve already mentioned.

The gas itself doesn’t make a lot of money for a gas station, it’s the purchases made in the store where the real profit is made.

Convenience stores can also double as a mini-grocery store, carrying staples like bread, milk, eggs, cereal, toilet paper.

It can also be a take-out donut and coffee stop, a beer and wine retailer in many areas, ice cream counter, or even a lunch spot where people can grab pre-made sandwiches or slices of pizza to go.

Convenience stores are versatile, flexible and profitable.

No specialized certificates are needed to operate one and with good employees, they can be run 24 hours a day.

That’s why this business idea landed in our top position.

BONUS Small Business Tip

And, as promised, here is a bonus small business tip from one of the world’s greatest businessmen, Thomas J. Watson, a failed sewing machine salesman who would later become the CEO of the company that is today IBM.

Watson once said:

“Would you like me to give you a formula for success?

It’s quite simple, really: Double your rate of failure.

You are thinking of failure as the enemy of success. But it isn’t at all.

You can be discouraged by failure, or you can learn from it, so go ahead and make mistakes.

Make all you can.

Because remember that’s where you will find success.”

For new entrepreneurs, it can be intimidating to take the plunge and try something new.

However, Watson gives an important reminder that failure should not be feared but rather embraced as a learning opportunity.

We have to recognize that it is through failure that we gain invaluable insight and understanding needed for our eventual success.

We must remain open to making mistakes and experimenting in order to unlock our full personal and business potential.

True success comes from pushing ourselves out of our comfort zone and trying things even if they don’t succeed the first time around.

And while our own failure is a great teacher, there is nothing wrong with learning from other people’s mistakes and successes.

And if you want to learn from others’ mistakes in order to avoid making the same ones, check out this article here on Small Town Businesses That Always Fail.

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