Small Businesses in Rural NC

One-third of all small businesses in rural North Carolina have doubled their sales and/or employment over a five-year period, according to a new report sponsored by the North Carolina Rural Center and the University of North Carolina’s Small Business and Technology Development Center.

Based on a survey of 1,145 rural businesses with between five and 250 employees, the study is a first attempt to understand the characteristics of rural entrepreneurs with special consideration of rapidly growing small, rural enterprises.

The study found that restaurants and retail establishments account for a quarter of all small rural businesses. The entrepreneurs behind such firms tend to be disproportionately white, male, middle-aged, well-educated and firmly rooted in rural communities. Rural firms struggle with issues related to distance from major metropolitan markets, the small size of rural markets, access to capital and – most importantly to the survey’s respondents – a shortage of skilled workers.

High-growth rural firms, meanwhile, tend to be connected to manufacturing and construction sectors and led by younger, more optimistic owners. High-growth firms not only tend to emphasize clear business objectives and sound finances, but also are quite sensitive to workforce issues.

While the report paints a positive picture of small rural businesses, it makes no mention of job quality. A sizable portion of the rural businesses documented in the report are connected to sectors, like retail, that tend to pay low-wages. Additionally, small employers, especially those with fewer than 100 employees, are less likely than larger firms to offer employee benefits like health care and retirement or provide advancement opportunities. Lastly, many of the high-growth firms discussed in the study are located near metropolitan areas – a fact that raises questions about how “rural” such firms really are and the ability of such firms to spark widespread economic growth in rural North Carolina.