Does Rural Location Matter? The Significance of a Rural Setting for Small Businesses

Abstract

Rural settings in the United States have characteristics that present a unique context for small business, often portrayed as adverse. Studies of rural entrepreneurs and small businesses, however, frequently fail to provide data on the rural context and its potential relationship to small business, taking for granted presumed attributes and adverse effects. To develop a better understanding of a rural setting's importance, this research investigated effects of rural geo-demographic and socio-cultural features on 76 small businesses. Results demonstrate that rural geo-demography adversely affects marketability of products and services although there is little adversity for small businesses due to constrained resources (financing, technology, and transportation) or labor issues. Business owners manage their businesses consistent with rural socio-cultural values by relying on strong social ties and word of mouth reputation. However, women-owned businesses experience little adversity due to gender stereotypes. The rural setting considered in the study has varying implications for different types of businesses and for business owners according to how long they have lived in the community. Its effects are neither adverse in all respects nor universal for all small businesses.

Quand la famille pèse dans la balance…lors de la décision d’aller vivre en milieu rural ou de le quitter

“…Ils peuvent dès lors réaliser leurs rêves d'être indépendants et créatifs quant à l'emploi puisque la campagne leur offre cette opportunité, tel qu'observé dans d'autres pays (Saleille, 2007(Saleille, , 2006Shields, 2005;Stockdale, 2006). L'importance du travail autonome dans ce groupe est donc notable, spécialement dans la région montérégienne où il touche la majorité des néo-ruraux interrogés et actifs sur le marché de l'emploi ainsi que leurs conjoint(e)s, comparativement à la moitié dans le Centre du Québec.…”

Le « réseautage » chez les entrepreneurs néo-ruraux

“…La littérature montre que cette localisation, de part ses caractéristiques géo-démographiques (éloignement, manques en ressources, faible densité) et socio-culturelles (interconnaissance, appartenance à une communauté, solidarités), implique des pratiques de gestion spécifiques : stratégie coopérative implicite, importance du bouche à oreille dans la communication, imbrication des réseaux sociaux et professionnels (Shields, 2005).…”

Public business services fostering growth - case studies in northern sparsely populated areas

“…The per capita household income and educational level of rural residents tend to be low in comparison to their counterparts in urban areas, and rural businesses may lack sufficient access to financing. On the other hand, Shields (2005) has found that rural entrepreneurs viewed neither resource constraints (financing, technology and transportation) nor labour issues (availability of Public Business Services Fostering Growth -Case Studies in Northern Sparsely Populated Areas skilled workers and childcare) as significant sources of adversity. Sociocultural features such as gender roles, cooperation, communication and social and business networks are closely intertwined with small business operations in rural areas (Shields, 2005).…”

“…On the other hand, Shields (2005) has found that rural entrepreneurs viewed neither resource constraints (financing, technology and transportation) nor labour issues (availability of Public Business Services Fostering Growth -Case Studies in Northern Sparsely Populated Areas skilled workers and childcare) as significant sources of adversity. Sociocultural features such as gender roles, cooperation, communication and social and business networks are closely intertwined with small business operations in rural areas (Shields, 2005). In addition, Boter (2005) found that SMEs located in sparsely populated areas utilise PBSs more often than in larger regions.…”