How to Make Money in a Small Town

Are you thinking about leaving the busy people and bright lights of the city for a quieter, slower-paced small-town vibe? Or maybe you've grown up in a small town and you want to stay close to home, but you need to figure out how to make extra money.

A small town might not offer all of the same opportunities as a big city, but that doesn't mean you can't find a lucrative side hustle or start a successful small business. Let's take a look at some of the challenges and opportunities associated with working in a small town and some creative ways you can start making money.

Challenges of making money in a small town

Setting up shop in a big city typically comes with more competition and a higher cost of doing business, but a small town comes with its own list of unique challenges.

You can find a good small-town business idea even if you live in a rural community. But it will have to be tailored to the potential audience to make the extra income you're seeking. And even if the idea is strong, you'll come across other small-town challenges:

Difficulty finding and retaining good employees. A small town obviously has fewer people than a big city, resulting in a smaller pool of potential employees. Small towns can also struggle to retain young workers as recent high school grads take off to go to college or to find more opportunities in a city.

Limited access to resources and networking. In a small town, you might struggle to find resources you need to help you start your small business. This can be anything from funding to mentorship opportunities. Additionally, living in a small town means you might have to drive miles out of your way to attend meetings or networking opportunities.

Limited market. Just as a small town can mean a smaller pool of workers to choose from, it also means a smaller customer base. There are simply fewer people in a small town to sell to, so ensuring enough demand for your product or service can be a challenge.

Online competition. Depending on the product or service you're providing, you might encounter online competition. For example, if you own a physical clothing store, you may find yourself competing with large online retail chains that can deliver their products to customers' front doors.

Small towns and rural areas still need businesses. You can serve a rural area by starting your own business to take advantage of what might otherwise be seen as a weakness. Maybe, for example, you can create a part-time job going to the grocery store for neighbors who can't (or don't want to) make the trip.

You can also do many online jobs from a rural area, such as being a virtual assistant or helping a company with its social media. Be wary of letting your desire to be a business owner lead you into dangerous areas like affiliate or multi-level marketing. Not all “jobs” in these areas are scams, but be very wary of any company that wants cash up front to “hire” you.

Benefits of making money in a small town

While finding ways to make money in a small town comes with its challenges, it also offers some unique benefits:

Word-of-mouth marketing. If you deliver a quality product or service in a small town, people will notice, and there's nothing like word-of-mouth marketing to get your business moving.

Face-to-face relationships. You also get the benefit of really getting to know your clients. In a big city, you might never meet a customer face to face, or if you do, you might not remember him or her due to the sheer volume of encounters you have.

Cost of living. Living in a big city can be super expensive. Settling in a small town can greatly reduce your living expenses, meaning your dollar will stretch further.

Online opportunities. With a good internet connection, it's now possible to make money from wherever you are. If you're worried about the limited market in a small town, open up your opportunities. You can easily set up a website and make your product or services available to people all across the country or the world.

There's no reason an entrepreneur can't live in a small town and make a good income. Smaller cities still need many of the same services as bigger cities. A rural area, for example, will not need as much pet sitting or pet grooming service as a big city, but it's still likely to need some.

You may also have lower startup costs operating in a smaller city or in rural America. That may make becoming a small business owner easier, even if it's a difficult path to create a profitable business.

Creative ways to make money in a small town

Living in a small town should not limit your ability to work and make a living. With a little market research and some imagination, you can find tons of ways to make some extra money.

Rental business. What do people need in your small town that you could rent to them? If you're in a tourist town, what do people need when they visit? If you live in a farming town, is there equipment you could buy and then rent to other farmers? If there's camping in your small town, you could consider flipping RVs and renting them out to campers. Or if your town has a lot of adventure sports, you could rent out bikes or other sporting equipment.

House-sitting. When people in your small town go on vacation, you can be the person they call to take care of their house. With a bit of marketing (think posters or an ad in an online newsletter) and some word-of-mouth references, it's possible to start a lucrative side business with minimal upfront costs (and not much effort).

Housecleaner: Whether you live in a small town or a big city, you will always find people willing to pay someone else to clean their house. Because there’s a low barrier to entry, you may encounter some competition. So if you want to succeed, make it your goal to be the very best. Or consider targeting a niche market. For example, offer natural cleaning products for people who don't want their home cleaned with chemicals.

Handywoman/handyman: At some point, we all need a handywoman or handyman to fix something. There's no exception for people living in small towns. If you're skilled at fixing things, then start to promote your services around town.

Sell firewood, golf balls … : Depending on where you live and what there is to do, you can make some side money selling useful items. For instance, if your small town sees a lot of campers and you have access to wood, start selling firewood. If your small town has a lot of golfers, you can do the legwork and search for lost golf balls in the woods or water traps and then sell them at a discount.

Sell your produce: Do you have a green thumb and love to garden? Why not mix business and pleasure and use your gardening skills to make some extra money? You can sell your produce online using sites like Food4All or take it to the local farmers market.

Be a tour guide: Share your love of your small town by playing tour guide to out-of-town visitors. You can use platforms such as Airbnb, where you can sign up to become a local “experience host.” You can take guests on a guided bike tour of your town, teach them how to surf or take them on a hike. As an experience host, you can make money while doing something you genuinely love.

Remote/freelance work: With remote freelancing opportunities, you don't have to be limited by your physical location. Set up a website and start to promote your online services. Whether you want to try your hand at freelance writing, web design or virtual assisting, you can use your skills and passions to start making money online.

Mechanic: In a small town, it's pretty much essential for everyone to have a car or some kind of motorized transportation. If you like to tinker with motors (and you're good at it), consider setting up shop as the town mechanic. Or if you just want to earn some extra money, this is a great option for a side hustle. You can get more specialized based on your specific interests. Start to advertise yourself as “the mechanic” for dirt bikes, farm equipment or anything else that has a motor.

You can also use social media, including Facebook, to promote your small business, and that's cheaper to do in a less-populated area. You can use Craigslist to look for gigs, and some communities may have a blog (or even a local newspaper) offering ways to earn money, even if it's not at a traditional job.

How to start a business in a small town

You've weighed the pros and cons of starting a business in a small town, and you've narrowed down your money-making options. Now it's time to take action.

Do your research. Before you start your business, get to know your market. Understand what needs you're going to fill with your business. Who you are trying to sell to – who is your target customer? What resources do you need to get started (capital, specific skills, additional education)?

If you're interested in hiring employees, you'll want to consider whether you'll have access to skilled workers.

What about the competition? Is your small-town market oversaturated with the products or services you're hoping to provide? For instance, if you have dreams of opening a hair salon or a nail salon, spend some time researching how many of them already exist in your small town. Is there enough demand to open another, or will you be fighting to find customers? The same applies to opening a coffee shop or ice cream shop.

Use local resources. Once you've identified the resources you need to start your business, it's time to go out and find them. You can find business assistance and knowledge through your state's small business development centers (SBDC).

The SBDC is a partnership between the U.S. Small Business Administration and local universities, and it provides free or low-cost training and other resources to small business owners and entrepreneurs. You can Google “small business development center + [the name of your small town]” to find this resource.

Also consider joining your small town's chamber of commerce. The goal of a chamber of commerce is to promote the interests of local businesses, provide educational opportunities and assist with the promotion of local businesses through networking opportunities.

Consider the costs of doing business. While setting up a business in a small town is generally cheaper than doing it in a big city, it's still important to know your numbers, so you can make a solid plan and avoid taking on too much debt. You should research things like the cost of living and labor costs. You'll also want to understand the tax situation in your small town. And if you plan to open a physical shop, you should determine the cost of office space.

You also have to consider what you're looking for with your small business. Is it just about earning some extra cash? Are you trying to do something smart with your spare time or to be your own boss? Do you have student loans to pay off or other debt you're hoping to get out from under?

Small town, big money

It may not be as easy to come up with a good small-town business idea, but it's possible to use the setup to your advantage. What's missing in rural areas that people may actually want that you can provide?

Don't let the challenges associated with making money in a small town prevent you from trying to establish a successful side hustle or full-time business. With a combination of research, creativity and hard work, it's possible to make extra money from wherever you live and choose to call home.

-By Jessica Martel