Best Business Ideas for Small Towns: 18 Niches to Choose From

Successful businesses don’t just exist in cities of millions — they can also thrive in small towns and rural areas. Small towns offer unique business opportunities for a concentrated market, as well as the challenge of a small community. Finding business ideas for small towns that will survive and become successful is based on meeting existing demand accompanied by a high-quality product or service.

In this post, we will provide the best small-town business ideas. So, read on to determine which niches are most viable for your local community!

18 Business Ideas for Small Towns

Once you’ve made up your mind on a niche, consider using financial tools and services that will help you to save time and energy when opening your business.

Finom is a provider of a wide range of financial tools and services, such as accounting software integration, business accounts, and invoicing. These services help novice sole proprietors manage their finances and keep them detailed and accurate.

Finom technologies are always available for business owners in a single mobile-first platform. Small businesses owners and freelancers can try out Finom's free Solo plan, which includes additional features like multi-banking and its own bank accounts with local IBAN.

To open a business in a small town, you should do careful research and come to an understanding of your area. Once you have an idea of the existing businesses in your community and local demand, you'll be ready to decide which business is right for you and your town. The first step to starting a profitable business is to choose an industry or service in which the residents’ needs and your own interests intersect.

The following ideas can all be great sources of profit within a local community. Keep reading to find a successful business venture: 

Coffee Shop and Bar

If you live in a small town and think of your neighborhood coffee shop and bar, you probably think of two different establishments. However, combining the two businesses might be a great idea to put into practice, especially if your clientele is sparse.

The concept of a coffee shop that serves alcohol is that coffee consumption starts to drop significantly in the afternoon hours. If you want to work late and need the money, then filling an additional need in your small community is a great business idea. Offering your place not only for business meetings and freelancers but also for happy hours and first dates will bring you extra profit.

Grocery Store

If a small town doesn't have a grocery store, there's probably a good reason: maybe most people work in another town and buy daily products in other stores, or the population isn't large enough to support a big chain.

If you want to go the independent route and avoid a franchise business, try to find a way to specialize your store, so you don’t overpay for huge inventory. Use local products, trends, and tastes to make your decision.

In agricultural areas, farmer's market-style stores that sell local produce and seasonal items are usually popular with locals and tourists alike. Rural areas that already have a major chain grocery store but few organic, local, gluten-free, or vegan options are great candidates for specialty grocery stores.

Clothing Boutique

Everyone needs clothes, and even though online stores are widespread, sometimes it's better to try on clothes in person. If you don't have a large clothing retailer in your town, you may want to consider opening a small boutique. In terms of clothing, you can consider many different avenues, from selling T-shirts to offering unique, locally made items. A clothing boutique could serve not only to locals but also to visitors from nearby cities.

Food Truck

Starting a food truck may not have been high on your list of business ideas for a small town. But depending on your town location, the seasonality of its residents, and the weather, opening a food truck business can be a good investment. Many small towns have vibrant communities and often host outdoor events like sporting activities, festivals, and markets. Being able to run your business in crowded places can lead to a great profit. One of the main benefits of food trucks is that they can be rented for special events. If a small town lacks a catering service, it’s an advantage to be able to hire a food truck for a local party.

Farmers’ Market

Farmers’ markets play an important role in local communities and rural areas, bridging the gap between farmers and consumers. Start-up costs for farmers’ markets are usually moderate, and business owners should know about sales, farming, and working in local bureaucracies. 

Flea Market

Entrepreneurs from small towns can consider opening a flea market to serve their local communities and neighboring towns. This lucrative idea can be a great business opportunity for people who have experience in flea markets and retail or craft fairs — and who don't mind working more during peak season.

Open flea markets can be started with minimal investment, while indoor facilities can cost much more. The earning potential for this small-town business idea is quite high, especially if you adjust the rent for vendors to match your operating costs. Your best chance for growth is to choose your location carefully, as markets in overcrowded areas will not be successful.

Car Wash

Regardless of where your small town is located, one thing is certain: people prefer shiny vehicles to dirty ones. If you don't already have a car wash in your town, or at least in a neighboring town, starting a car wash could be an ideal small-town business idea. The only thing to think about before you start: location.

Hair Salon

If there is at least one barbershop or salon in your town, it may help you to open a new hair salon. If one demographic is underserved — for example, if there is only a hair salon focused primarily on women — find out whose hair needs are not currently being met.

If your town already has a full-service hair salon, consider opening a more niche hair care business, such as a barbershop, blow-out bar, or beauty salon that offers makeup, eyelashes, and tanning in addition to hair care services.

Bed and Breakfast

If you've ever lived in a small town and hosted guests, you might have dreamed of having a B&B in your town. Although small towns with a developed tourist industry often have historical inns or at least a motel, most towns do not. That means there is no place for relatives or guests to stay during a family reunion or wedding. Starting a B&B can help fill a need in your area. If you're worried about not being able to keep your rooms booked, open a small inn. 

B&B owners also tend to live in the same homes they manage, often converting their large homes into bed and breakfasts. It’s a good idea for those who have recently become empty nesters and have too many rooms to fill. If you are in your later years and are looking for small-town business ideas, this concept is worth your attention.

If you open a small hotel, there is no need to have a complex accounting system; you only have to register your business with the tax system and pay your taxes.

 Bookstore

Given the popularity of big online sellers, you might think that opening a bookstore is ridiculous. However, in small towns, you may be able to capture a certain market of readers who will frequent their local bookstore. A bookstore can be a successful small town business idea in more than one way. In addition to selling books, a bookstore can serve as a town historical institution, host events such as readings with local authors, and even include movies in its offerings. If your town lacks a place for reflection, discussion, and reading, starting a bookstore could be an ideal business plan.

Brewery or Winery

While a brewery or winery may require more research and investment than some of the other small town business options on this list, any of these business ideas can be quite successful. Breweries and wineries can serve as a gathering place for townspeople to not only drink but also hold events or just get together — especially in warm weather if you have an outdoor area. Breweries and wineries seem to have increased in frequency and popularity in small towns in recent years, and while these types of businesses may require more upfront costs, there is definitely room for growth and development.

 Flower Shop

Opening a flower store is an inexpensive business idea, even for small towns. This is cheaper than a restaurant or a car wash. Opening a flower shop has relatively low costs compared to other types of retail businesses. The only thing you will have to deal with is the purchase of a cooler to keep your flowers fresh.

Although locals will be thrilled to have fresh flowers in their town, you will still have to compete with online delivery services. Remember, if you're the first florist the town's residents have ever seen, they're probably used to ordering flowers online. The best way to compete with the online flower sellers is with reasonable prices, attention to detail, excellent customer service, and a little creativity.

 Hardware Store

Residents always need a more specialized place to go when they're doing home repairs or projects, so they don’t wait for online delivery. With the variety of products you can sell, starting a hardware store can satisfy many different needs of residents, from painting to pool maintenance. It’s an ideal business option for those with a penchant for mending or building; besides, maintenance and repair are markets that will always exist.

 Cleaning Service

A cleaning service is also a good business idea for small towns. Although it's becoming more popular these days to deal with big companies or startups, often, these services either don't extend to rural areas or don't have contract workers willing to come to outlying towns. This can be frustrating for those who want a sparkling kitchen, but for you, it can mean great business opportunities. It's also one of the easiest types of businesses to start, as it has minimal overhead.

 Gardening and Landscaping

At least one thing most small towns have in common is lots of grass. Towns tend to be in rural areas, so residents are more likely to have lawns and gardens. This means that people will be looking for gardening and landscaping services. A few advantages of opening such a business in a small town are reliability, predictability, and scalability. 

Once you start finding customers, as long as you provide quality services at a reasonable price, you will likely have the same customers for years to come. You will also be able to predict which services customers will need. Not only does grass need to be mowed repeatedly, but lawns need to be fertilized and treated for weeds and bugs regularly. A landscaping business is also among the best businesses for a small town that scale well. You can start by providing a few services, such as lawn and shrub care, but you can later expand to snow removal services.

 Pet Store, Grooming, and Boarding

Opening a pet store is one of the best business ideas for a small town if it doesn't already have a local pet shop or a large chain. If pets are popular among residents in your area, pet grooming and boarding services will be in demand.

If you’re thinking about starting a pet store or pet service business in a small town, ask local pet owners where they get food and grooming. An existing pet store owner in your town may also be a good source of information if you want to offer grooming, walking, or boarding services.

 Tutoring Business

Every town has children who need to go to school, and if there are students who need extra help outside of school hours, a tutoring business can be beneficial to both children and parents. If you are looking for a small town business idea that allows you to provide help and grow your community, consider a tutoring business. You can start your own tutoring business for kids at any level — elementary, middle school, or college prep. Choose a subject you are knowledgeable and passionate about, and you can easily find common ground with kids who need help. 

 Bakery

There's nothing better than a small-town bakery, a place where residents can come for a good cookie, piece of cake, or croissant. If you are a talented baker or can work with someone who knows how to do it, this could be a great small-town business idea for you. By opening a bakery, you can cater to your small town's sweet tooth, as well as appeal to those who need a quick pastry and a cup of coffee in the morning. You also have the ability to make cakes or other signature desserts for events and parties. Opening a bakery is even better if your small town doesn't have one; besides, it's less of a hassle than starting a full-service restaurant.

Businesses for Small Towns: Takeaway

When opening a business in a small town, you should consider several things before you get started. Before diving into various business ideas, you need to conduct detailed research on the town and think about what type of business you are interested in, your budget, and how you intend to start your business.

To carefully choose the business that suits you and your town, you should take the time to understand how other local businesses currently operate, research demand, and talk to your town’s business owners. Basic goods and services such as grocery stores and a car wash are probably the safest choices for a business in a small town. However, with the right planning and in a local community setting, you can also succeed with more original business ideas.

Always look for partners that can ease your business path in advance. For instance, Finom helps its clients by providing an easy-to-use interface for invoicing. Moreover, it knows how difficult it can be to launch a new business. That's why it offers a free Solo plan with multi-banking and own bank accounts with local IBAN.