The Best Small Business Ideas for Small Towns: Opportunities Overlooked

America really is a country of small towns. According to the 2020 U.S. Census, 76% of incorporated places have populations of fewer than 5,000 people -- and 42% of those are home to fewer than 500 residents!

One of the best ways to make a big splash in a small town is to start a business. You'll get to know your fellow residents, and if you can satisfy a demand or make their lives easier in some way, you can find financial success. Here are five ideas for small town businesses that you might not have considered.

1. Pet grooming and boarding

Even in a small town, people love their pets. You can capitalize on that love by opening a pet salon or even offering boarding services if you have the space or can rent or buy a building to house your operation.

In most states, there's no requirement to be licensed to offer grooming services, but this is definitely a job you'll want ample experience with before getting started. There's also growth potential in this line of work -- according to the U.S. Bureau of Labor Statistics, employment of animal service workers is expected to grow by 16% by 2031. You might be able to drum up more business by advertising your services at a local vet clinic, too.

2. Handyperson service

For homeowners, having a handyperson service can be crucial for when they just need someone to swap out a faucet or install a dimmer switch and don't need to hire a full-on plumber or electrician. Owning a house is a lot of work, and not everyone has the skills or time to handle all the little maintenance and repairs themselves.

If you're handy, you might find success starting this kind of service in a small town. You can charge a set hourly rate for little jobs and consider setting higher prices for specific jobs, like hanging up a ceiling fan, cleaning gutters, or trimming trees.

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Your clientele could even go beyond just homeowners -- I've run nonprofit organizations in small towns, and having a dependable service to call when something minor needs fixing always took a load off my mind.

3. Home and office cleaning

It might not be glamorous work, but starting a cleaning service is an all-around great business idea, no matter where you live. Many people dislike cleaning and will outsource chores for a reasonable cost. Your upfront expenses will be low (cleaning supplies, basically), and while getting insured and bonded is a good idea, you won't have to pay for premises to house your business -- you go to your clients.

You can clean homes, office spaces, or both. In fact, if you need more time flexibility, you might want to target offices with daytime working hours that are looking for cleaning services when they're closed.

4. Restaurant

Having lived in some areas that were sorely lacking in diverse food options, I can safely say that opening a new restaurant is a valid small business idea for a small town. There are a few caveats to consider, however. Restaurants are notoriously difficult to get off the ground, and running one involves a lot of moving parts, as you're managing food costs, rent or mortgage on the space, paying staff, and (ideally) earning money from the patronage of a fickle public.

To give yourself the best chance of success, take the time to explore the food options already in town and don't duplicate them. But avoid going too far in the other direction and trying to launch a restaurant that won't appeal to most of your fellow residents.

If you have a lot of contacts in town, it might be worth asking people directly what kind of food they wish for. The last time I lived in a small town, I longed for a Mediterranean restaurant.

5. IT services

Finally, if you're a techie sort of person, starting an IT services company could be a solid business idea. In a small town, you might serve other small business owners who need help setting up network security, company email, or even just general troubleshooting and support.

If your small town is seeing a lot of new businesses, you might earn a tidy sum offering hardware installation -- in the middle of opening a new company, a lot of business owners would likely be happy to outsource setting up computers, printers, and other equipment they'll need. You can also offer computer set-up and repair to individuals, if you have those skills.

A lot of people dream about being their own boss, and starting a small business in a small town could be a great way to make that dream a reality. Depending on the business you start, yours could even be the first of its kind in town. Just take the time to research the wants and needs of your fellow residents first to give yourself the best chance of success (and growing a fat business bank account balance).