Small businesses need talent and technology
Columnist Dean Swanson says shifting demographics make business harder for rural entrepreneurs.
According to the recent SCORE study “Megaphone of Main Street,” next to capital, there are two things every business needs in order to be successful in the Digital Age: high-quality employees and easy access to the latest technology.
Unfortunately, survey respondents told us those can be much harder to come by in rural communities. That puts small businesses in rural geographies at a major disadvantage.
Between 2010 and 2020 while the overall population of the United States was growing, the population in rural communities declined by nearly 300,000 people, according to the U.S. Census Bureau. Although the decline is small — less than 1% of the nation’s total rural population — it’s the first-ever decade-long population loss in rural America, the University of New Hampshire reports.
In rural geographies, even small shifts in population can have big impacts, the survey suggests. Nearly half of rural entrepreneurs (45.3%) said declining rural populations has impacted their businesses. By comparison, a quarter (25.5%) of non-rural entrepreneurs make the claim. In fact, 68.6% of rural businesses city population shifts as a reason for higher local costs of doing business.
When the rural population declines, the working population shifts. Small businesses in rural areas are 26% more likely than small businesses in non-rural areas to say they have trouble finding qualified employees in their area.
Rural business owners are desperate for workers, truck drivers and more. Trucking is a particular concern because items need to be transported to customers, and trucking is an industry that has a severe shortage of workers.
The study asked CEOs what specific challenges they face regarding finding and retaining qualified workers. The responses, first from rural then non-rural CEOs, are:
- No challenges finding and retaining workers 44.5%; 48.2%.
- Few qualified workers in my area 35.9%; 28.5%.
- Demand for higher wages 34.9%; 32.2%.
- Difficult to deliver competitive health benefits 20.7%; 20.3%.
- Workers still want to work remotely 8.9%; 10.4%.
In addition, the study found that workers aren’t the only ones fleeing rural areas. Because they can’t grow their customer base as easily as non-rural entrepreneurs, rural small business owners must place extra emphasis on customer retention. But rising local costs have made it harder to satisfy their customers — in particular, rising fuel costs, which are vexing to half of rural entrepreneurs (49.3%) but less than a third (29.5%) of non-rural entrepreneurs.
Another reason rural entrepreneurs struggle to serve their customers is that they often lack access to even the most basic technology infrastructure and expertise. Rural America’s dwindling population, for instance, means there may be fewer IT experts and vendors locally who can help small business owners acquire the skills and services they need to connect to the digital economy.
But tech illiteracy isn’t exclusive to rural businesses. In fact, four in 10 small business owners in both rural (43%) and non-rural (45.5%) areas say they struggle with lack of technology assistance or knowledge.
Still, rural businesses do have unique disadvantages — the most fundamental of which is internet access, with twice as many rural entrepreneurs (19.2%) as non-rural entrepreneurs (9%) saying they struggle with access to broadband/high-speed internet.
That comports with findings from the U.S. Census Bureau, which says an average of 62.7% of households in rural counties have access to moderate- or high-speed broadband, compared to 83.3% of households in urban counties.
Small business owners everywhere need help and health care to thrive. Although rural entrepreneurs are uniquely disadvantaged due to lack of population density and technology access, small businesses everywhere face real challenges. And they need real help to overcome them.
In both rural and non-rural areas, what small business owners said would most help them be successful in the coming year is better health care options, which could help them remain competitive with larger firms with regard to attracting and retaining workers.
Entrepreneurs also supported the idea of increased support for employees — in the form of stimulus, for instance, or increased funding for child care — and offered several unique ideas in their survey comments. One small business owner, for example, said more grant funding for small businesses would be helpful. Another stressed the importance of free education for small businesses on topics such as marketing, technology, regulations and finance.
Dean Swanson is a volunteer Certified SCORE Mentor and former SCORE chapter chairman, district director and regional vice president for the North West Region.