29 BEST SMALL TOWN BUSINESS IDEAS FOR 2021

If you're thinking about starting your own successful business for 2021, keep in mind that entrepreneurs can thrive anywhere. The following small town business ideas are great opportunities to start a successful business today. In fact, it’s important to recognize that some businesses are actually better-suited for small towns.

The business ideas below are profitable and ideal for entrepreneurs who appreciate the charm of small towns and wish to provide a service to their community.

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We’ve broken down our top small town business ideas into a list of four categories and assessed each one based on startup costs, required skill level, and earning potential to help you decide which business is best for you.

Small town business idea subcategories

Customer Service Businesses

1. BANK

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Small town entrepreneurs should only consider opening a bank if they already have, or are prepared to obtain, extensive knowledge of the banking industry and regulations surrounding financial services. This is a demanding job that will require long hours and a passion for working with numbers.

Bank owners must be highly skilled and have a solid business sense. Startup costs are very high and most business owners will solicit investors for the $12 to $20 million they will need in startup capital. Profits will help offset initial costs, as most banks see a 10% to 15% net profit. There is a large potential for growth in this industry and successful business owners can open additional branches in other locations.

Learn how to start a bank.

2. CAR WASH

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Opening a car wash in a small town can be a good idea for entrepreneurs who get a lot of job satisfaction out of making cars look their best. There are several different options when it comes to the size and type of car wash you open, each with their own unique features and requirements.

Owning and operating a car wash doesn’t require specialized education or work history, though being a good conversationalist and having a high attention to detail will be to your benefit. Startup costs are typically high (around $500,000) for larger operations, but profit margins are very high for larger businesses as well. Some moderately successful car washes can yield over $6,000 in profits each month. If you so choose, you may consider opening additional locations if your first car wash is successful and you enjoy the line of work.

Learn how to start a car wash.

3. FUNERAL HOME

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Funeral home businesses are best for those who have the capacity to help people through some of the most difficult moments in their lives. Although these aren’t the most popular businesses in small towns, they are very important to the communities they serve.

Funeral home business owners should be compassionate, have good people skills, and be able to market their services in an effective, yet tasteful manner. Startup costs are high, but so is the earning potential depending on the demographics of the community you work with. This industry can expect to see continued growth as America’s aging population grows.

Learn how to start a funeral home.

4. GAS STATION

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Every small town needs at least one gas station. This type of business can be great for entrepreneurs who enjoy working with people and have a solid understanding of how businesses work. We suggest that gas station business owners have some knowledge about running a business, whether that comes from experience or from taking a few formal classes.

This will provide knowledge on how to source products and maintenance services, manage employees, and ensure they are following local permitting laws. Startup costs for gas stations are high (around $300,000 to get started), as are the ongoing expenses. Business owners will make around $70,000 per year until their loans are paid off. Depending on your business goals and the success of your gas station, there is an opportunity to grow your business and open up additional stations in the area or surrounding towns.

Learn how to start a gas station.

5. LAUNDROMAT

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Laundromats can be great businesses for people who want to start a business in their spare time, as laundromats do not require a large time commitment from their owners early on. Business owners should ideally be somewhat mechanically inclined, should they need to service the machines, and they should have some basic business skills.

Laundromats have very high startup costs ($100,000 minimum), but they have an average profit margin of 20% to 30%. Businesses can increase their profits by offering additional services or selling laundry-related products. Growth potential is practically unlimited and business owners can decide if they want to expand their business by opening additional laundromats.

Learn how to start a laundromat.

6. PHARMACY

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Entrepreneurs with a deep understanding of how pharmacies and pharmacy benefits work may consider opening a pharmacy in a small town. This line of work requires highly-skilled business owners, preferably with Doctor of Pharmacy degree, deep knowledge of how insurance companies process pharmacy benefits, and an understanding of FDA rules and regulations.

In addition, pharmacy startup costs are high and these businesses typically require a multi-million dollar investment. Once you start to see steady business, you can make around $300,000 per year. When you’ve made a name for yourself in your community running this profitable business, there is the potential to expand to additional locations.

Learn how to start a pharmacy.

Find a Web Domain For Your Small-Town Business Ideas

Securing a web domain and creating a quality website is important for the overall success of a small town business. You can search for an available domain below:

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After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free

FOOD & DINING BUSINESSES

7. BAKERY

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Entrepreneurs may find that a bakery is a good option for a small town business, especially if they are already passionate about baking. Good bakery owners are not only knowledgeable about baking, but they are also willing to work odd hours, and can make food that looks appealing and tastes great. 

Bakery owners should be very good with people and be able to produce fantastic baked goods. Startup costs for bakeries tend to be under $40,000 (unless they are started out of your home) and these profitable businesses can bring in $30,000 to $60,000 in profit annually. This is a highly sustainable business and there is a good opportunity for growth, depending on your business goals. Successful bakery owners may branch out to neighboring small towns or work with local retail chains to sell their baked goods.

Learn how to start a bakery.

8. BAR

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Small town entrepreneurs interested in the food and dining industry might consider opening a bar. These business owners need to be very personable, enjoy interacting with the public, and have a passion for their business.

Formal education is not required to run a bar, though some business or management classes or work experience in a bar or restaurant will definitely be helpful. Startup costs are typically $100,000 to $1 million, but bars can bring in an average of $25,000 to $30,000 per week. Your ability to grow your business will be based on the economy and health trends at the moment, so it will be vital to create a popular niche environment if you wish to expand.

Learn how to start a bar.

9. COFFEE SHOP

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If you are a coffee connoisseur and enjoy working with the public, a coffee shop can be a great small town venture. Owners should be comfortable working early morning hours and passionate about creating great refreshments and an appealing atmosphere.

Coffee shop owners don’t require formal education or training, but experience working with inventory management or in a shop will prove beneficial. Startup costs are generally moderate but can be quite high depending on your business model and shop location. Expect to pay a minimum of $5,000 for a small kiosk and over $200,000 for a shop with seating. Profits will be directly tied to the number of cups you can sell, though your profits will usually be between $32,000 and $52,000 per year. There is decent growth potential in this line of work and many popular coffee shops will have multiple locations.

Learn how to start a coffee shop.

10. DINER

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Diners can be very popular destinations in small towns, especially if they offer great food and beverage options to their guests. Successful diners typically offer a friendly atmosphere, good food, and set their restaurant apart based on features such as price, specialty menu items, or theme.

Diner owners should be good at working with people and have some knowledge about running a restaurant. No formal training or work experience is required, though these experiences will only help you to understand how to run your business better. Startup costs for diners are anywhere from $275,000 to $425,000 and profits tend to be in the 5% to 6% range. There is decent growth potential, with many owners either expanding the size of their current restaurant or open additional diners.

Learn how to start a diner.

11. FARMERS MARKET

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Farmers markets play important roles in communities and small towns by bridging the gap between farmers and consumers and providing an invaluable service to the communities they serve. Business owners should be able to effectively work with local governments, be personable, and understand the allure of locally-sourced ingredients.

These businesses do not typically generate a large profit, and most are actually run as non-profits. Startup costs are generally moderate for farmers markets and business owners should know a bit about sales, farming, and working within the local bureaucracy. Entrepreneurs who own a farmer’s market and want to grow their businesses typically either increase the size of their current location or add additional locations.

Learn how to start a farmers market.

12. ICE CREAM PARLOR

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Running your own ice cream parlor requires a lot of hard work, but it can be very rewarding as well. These businesses are quite popular in small towns and have the potential to open up additional sites in neighboring towns as well. Growing this type of business can prove to be profitable.

Business owners should provide great-quality ice cream and enjoy engaging with their customers to be successful. Ice cream parlors' startup costs are around $25,000 to $50,000, depending on your location and interior design. Although profits tend to be between $19,000 and $49,000 per year, business owners can increase these profits through careful marketing and diversifying how they sell their products.

Learn how to start an ice cream parlor.

13. MICROBREWERY

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Microbreweries are ideal businesses for creative entrepreneurs who have an affinity for crafting their own beer and sharing their creations with their local community. Business owners can take advantage of a flexible schedule and keep whatever hours are best suited for their business.

The best microbrewery owners typically have worked in one previously, have some experience in at-home brewing, or have taken some courses online. These businesses have high startup costs (around $500,000), but can yield around a 9% profit. Business owners can choose to start off small and eventually widen their distribution or open an on-site restaurant or beer tasting room to bring in additional profits.

Learn how to start a microbrewery.

14. ORCHARD

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Orchards are popular additions to small towns and they can provide great products and activities for the local community. These side-businesses are good for people who enjoy working with the earth, who don’t mind long hours during the growing season, and who have the patience to stick with their business after a difficult season.

Successful orchard owners should have a basic understanding of business, understand food safety standards, and ideally have a background in agriculture or one of the natural sciences. Startup costs for orchards are typically moderate (a minimum of $50,000) and your earning potential will usually remain low for smaller orchards. The growth potential of an orchard is dependent upon the size of your land and how successfully it’s cultivated. Orchard owners rarely expand beyond a single location, so finding a way to best utilize your land will help you succeed.

Learn how to start an orchard.

HEALTH & BEAUTY BUSINESSES

15. BARBER SHOP

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Small town entrepreneurs who enjoy working hard and helping members of their community look their best may consider opening a barber shop. Your target market will typically be adult males, but you will also see young men, young boys, and even the occasional female client.

Barber shop owners need to have good business sense, be certified barbers, and possess excellent people skills to run a successful business. Barber shops come with high startup costs ($150,000 to $200,000) and generally carry low-to-moderate earning potential ($35,000+). Businesses can increase their profits by offering additional services and retail products. There is also great potential for growth, as a successful business model can easily be replicated in other locations.

Learn how to start a barber shop.

16. BEAUTY SALON

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As disposable incomes have risen, so has the popularity of beauty salons. These profitable businesses provide small towns with services that standard hair salons do not, including manicures and pedicures, facials, waxing, and sometimes makeup services.

These businesses are great for entrepreneurs who have an interest in building relationships with their clients as they help them look their best. Other than solid business and marketing sense, a strong understanding of the beauty industry will help business owners tremendously. Startup costs are around $60,000, depending on the location and size of the business, and profits tend to be right around 15%. You will also need to take into account the cost to acquire all necessary licenses and certifications for the services you provide. Beauty salons typically grow their business by adding additional services or opening additional locations.

Learn how to start a beauty salon.

17. DENTAL OFFICE

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Every small town needs at least one dental office to provide routine and corrective dental services. You will need to have completed dental school and be properly licensed to be eligible for this business, but as a small town dentist, being friendly and personable will also help you tremendously in starting a profitable business.

Startup costs are very high in this profession ($250,000 to $500,000), but you have the potential to have a successful business and earn over $1 million per year. Your growth potential will depend on your business goals and the size of the town where you work. There is the possibility to open another location or add an additional dentist to your roster as your success builds.

Learn how to start a dental office.

18. HAIR SALON

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Hair salons differ from beauty salons in that they focus solely on hair. Entrepreneurs who love helping people look their best and who have a creative flair might enjoy opening a hair salon in their small town.

Successful hair salon owners typically have a strong work ethic, great people skills, and the ability to select the perfect location for their business. Hair salons can be a smart and profitable, small town business idea with startup costs between $95,000 and $200,000. Your earning potential will depend on your location, but you can expect to bring in around $50,000 in smaller towns. There is high growth potential in this business and successful owners can expand the size of their salon or even open additional salons in neighboring towns if they wish.

Learn how to start a hair salon.

19. NAIL SALON

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Small town entrepreneurs may consider opening a nail salon, especially if they are knowledgeable about the beauty industry and possess great people skills. These business owners can choose their own business hours, but they will need to make sure they can meet their clients’ needs.

Nail salon owners should have good business and marketing sense. In addition, if you plan to perform services yourself, you will need to be licensed to operate in your state. Startup costs are usually between $75,000 and $100,000, and profits are moderate ($40,000 to $75,000) and will depend on your location and number of clients you regularly see. Although you will start with a single location, there is always the opportunity to open an additional salon should your first shop prove successful.

Learn how to start a nail salon.

20. VETERINARY PRACTICE

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Veterinary practices provide essential services to the furry family members of a small town. Although it takes a lot of skill and education to become a veterinarian, the work can be very fulfilling for the right person.

Veterinarians must complete a rigorous education and obtain a license. In addition, successful business owners in this industry are compassionate, have good business sense, and strong observational and interpersonal skills. Startup costs for this line of work are very high (over $100,000), but veterinarians can earn around $88k per year. Your growth potential will depend on the success of your business and if you wish to expand your practice or open additional locations. Regardless, veterinary practices are highly sustainable.

Learn how to start a veterinary business.

21. WALK-IN CLINIC

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Walk-in clinics are usually ideal for small-town entrepreneurs who are already physicians looking for different methods of treating patients. Many states prohibit corporations from practicing medicine, so be sure to check your local laws if you are not a licensed physician.

Walk-in clinic owners are typically physicians and some insurance companies require that clinics obtain a certification or accreditation as well. Startup costs can quickly reach $1 million, but this small town business idea is highly profitable and worth the price. Earnings will be directly tied to the number of patients the clinic sees and once you’re successful, you could eventually open another clinic with other physicians in surrounding areas. Walk-in clinics are highly sustainable and have very good growth potential. If you have the startup capital, this could be a worthwhile investment.

Learn how to start a walk-in clinic.

SPECIALTY BUSINESSES

22. BED & BREAKFAST

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Small town entrepreneurs who enjoy hosting guests, cooking meals, and meeting new people may enjoy opening a bed and breakfast. Bed and breakfast owners should be comfortable having guests in their home and be willing to stay open on weekends and holidays.

Successful owners are gregarious, know how to cook, have an eye for interior design, and can perform maintenance on their homes. Bed and breakfast startup costs are quite high (over $200,000), but prove to be highly profitable at around 6 figures per year, depending on your rates and how often your rooms are booked. If your small town business is successful, you can look to expand by purchasing another home to operate a second bed and breakfast, however, growth for these businesses is typically minimal.

Learn how to start a bed & breakfast.

23. CLOTHING BOUTIQUE

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Clothing boutiques can be an excellent and profitable business idea for small-town entrepreneurs who have an affinity for fashion, a discerning eye, and are great with people. These businesses are well-suited for small towns as they tend to be smaller than other retail stores and focus on specific products and styles.

Clothing boutique owners should be self-starters, have a good understanding of business and fashion, and possess good sales and marketing skills. Startup costs in small towns can be moderate (minimum of $50,000) and your earning potential is high (profit margins around 80%) especially if you choose the right products and location. The popularity of clothing boutiques is on the rise, especially if they serve often overlooked demographics.

Learn how to start a clothing boutique.

24. FLEA MARKET

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Small town entrepreneurs may consider opening a flea market to serve their communities and neighboring towns. This profitable business idea can be great for people who have experience working at flea markets, craft fairs, or the retail sector, and who don’t mind working more during the peak season.

Business owners need to have solid sales and marketing skills and the ability to work well with local governments. Outdoor flea markets can be started with a minimal investment, though indoor facilities can cost quite a bit more. Your earning potential is good for this small town business idea, especially if you adjust your vendor rent according to your operating costs. Your best chance for growth is carefully selecting a location to start a flea market since markets in oversaturated areas won’t do very well.

Learn how to start a flea market.

25. NOVELTY STORE

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Novelty stores can be fun business ideas for small town entrepreneurs who have the charisma and personality to match the products they sell. These stores typically stock unique gift ideas and attract a wide variety of customers. Formal business education isn’t required, though it can be helpful.

Regardless, store owners should understand how to manage inventory and possess some general business skills. Startup costs are moderate and you stand to make up to a 50% profit margin. Your growth potential will be slow at first with this small town business idea, but you can build a solid client base by providing a unique experience that customers can’t get elsewhere.

Learn how to start a novelty store.

26. SKYDIVING BUSINESS

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Small town entrepreneurs interested in starting a skydiving business should be passionate and very knowledgeable about the sport and have the basic marketing and business skills needed to run and promote this business.

Startup costs for skydiving businesses are very high (over $100,000) unless you already own a plane, and owners also need to be able to sell their business plan to a local airport, investors, and the local community. You stand to make a good profit with this small town business idea, though the margins are highly variable depending on the number of customers and your business model. There is good growth potential for your skydiving business, as you will most likely bring in repeat customers and word of mouth will be your best source of marketing for a successful business.

Learn how to start a skydiving business.

27. SOUVENIR SHOP

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If you live in a small town that is, or is near to, a popular tourist destination, you may consider opening a souvenir shop. Successful business owners know how to select and price the right inventory to entice customers. Business owners should be good salesmen and come up with a solid plan for their stores.

Startup costs are generally moderate, but this will definitely depend on your location. A souvenir shop’s earning potential is modest, but that will also depend on location, popularity, and cost of goods. There is good growth potential when the economy is doing well, but you can still be successful if you stock lower-priced items when budgets are tight.

Learn how to start a souvenir shop.

28. USED BOOK STORE

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Book lovers are the ideal people to open used book stores, especially in small towns. Owners can typically start these as part-time businesses and can increase their hours as their business becomes more successful. Successful owners should know a lot about books and how book stores operate.

Though no formal training is required, it would be beneficial to have some experience working in a bookstore and possess at least basic business skills. Used book stores typically have low-to-moderate startup costs ($8,000 to $18,000), and 29% of business owners make less than $50,0000 per year. Although many of these businesses solely operate on a part-time basis, some grow to become regional chains - this will all depend on the location and popularity of your business.

Learn how to start a used book store.

29. WINE TOUR BUSINESS

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If you enjoy educating your community and are passionate about wine and vineyards, then opening a wine tour business in your small town may be perfect for you. Good wine tour owners and operators will need a thorough knowledge of the wine-making process and be able to explain the history of the region and vineyards they are visiting.

The startup costs and your earning potential for your wine tour business will vary greatly depending on your business model and if you choose to partner directly with any of the local vineyards. Regardless, no matter how you choose to run your business, there is plenty of room for growth, especially in vineyard-rich areas.

Learn how to start a wine tour business.

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