September 2003  Issue No. 21                    REAP HOME PAGE         A publication of the Center for Rural Affairs

Rural Enterprise Reporter

Overcoming Rural Entrepreneurial Challenges
Entrepreneurs in rural areas are finding innovative ways to start a business. Solid technical assistance is critical to their success.

BY GLENNIS MCCLURE, REAP WOMEN’S BUSINESS CENTER DIRECTOR & JEFF REYNOLDS, REAP PROGRAM DIRECTOR

The rural economy seems to be a constant challenge for those who desire to live and work in or near rural communities. The national economic downturn, poor ag commodity prices, and drought have contributed to the uncertain climate. Yet brainstorming for viable, good, sustainable business ideas is ongoing.

The Rural Enterprise Assistance Project (REAP), a program of the Center for Rural Affairs, is a full-service statewide microenterprise program that works in the midst of the challenges in rural Nebraska.

REAP staff receive regular inquiries from men and women who are looking to improve their lives, either by starting or enhancing a business. Many wonder what others are doing. What types of businesses are working in rural Nebraska and across the nation?

Filling a Market Niche or Need
Since REAP and our affiliated local associations are member-based organizations that encourage networking and local support with on-going education and technical assistance to businesses, it’s a natural that we can often answer such questions. REAP staff have an opportunity to work with many diverse businesses trying to fill a niche or need in their local, or sometimes regional or global market.

While we regularly field startup assistance requests for businesses like auto repair, computer sales, day care, and restaurants; REAP has worked closely with unique businesses as well. Examples include a paintball recreational facility on a farm and a corn grower who packages a product to sell especially for wildlife food.

Creativity, innovation, plus good planning are keys to successful entrepreneurship. Addressing uniqueness and niche marketing is often the difference in the fate of rural businesses.

The Need for Rural Self-Employment
Rural Nebraska has experienced long-term poverty, population decline, and job deterioration. The Center’s recent study, Swept Away: Chronic Hardship and Fresh Promise on the Rural Great Plains, sets out the current economic situation and makes recommendations for changes in policy to improve the economy of this area. States included in the 2003 study are Nebraska, Kansas, North Dakota, South Dakota, Minnesota, and Iowa.

Important findings center on the entrepreneurial character of this region. In rural farm counties, 42 percent of jobs are proprietorships compared to only 14 percent in metropolitan counties. Non-farm microenterprise has been the key to job growth in Nebraska farm and ranch counties. Nearly 70 percent of their job growth was from non-farm self-employment.

Self-employment holds promise for those who live in rural areas. Microbusinesses, those with five or fewer employees, account for 25 percent of jobs in Nebraska compared to 13 percent for the country. The role of self-employment in farm-based communities is even greater. Over 40 percent of all working people are self-employed.

Clearly, self-employment is critical to the survival of rural areas. Continued innovation and creative startup of small businesses will be a key to this effort.

Alternative Business Ventures for Agriculture
Several recent REAP client businesses have been involved in ag alternative businesses using existing agricultural land or livestock facilities. We’ve connected with several businesses venturing into the specialty or organic meat market – raising chickens on a pasture or finishing hogs or cattle on chemical-free rations and then marketing direct to consumers or retailers.

Using part of farm land or pasture for a recreation or tourism-related business has also grown in popularity. Converting a farmhouse to a guest house for urban visitors on a horse ranch or providing free space and natural obstacles in a paintball recreational facility on a farm are examples of using available resources in a business.

Proximity to customers in a nearby larger community can make the difference in success for a rural business. Often the isolation of rural entrepreneurs from larger markets makes marketing a much bigger challenge. Sometimes REAP is called on to focus its technical assistance on access to markets.

Communities realizing the importance of entrepreneurship are becoming proactive in seeking out potential business owners to start new businesses to fill a need in their area or finding new owners to take over when a long-time business owner is ready to retire.
REAP systematically works with businesses across rural Nebraska and emphasizes member networking locally and regionally so new and improved business ideas stay free flowing and helpful. We strive to deliver on-going educational programs across the state through our Women’s Business Center services. We also provide assistance in business planning and micro loans.

Making a connection with a microenterprise technical assistance provider like REAP can be a difference maker for a business facing today’s challenges.

Contact: Jeff Reynolds, REAP Program Director at 402.645.3296 or jefff@alltel.net or Glennis McClure, REAP WBC Director at 402.645.3296 or reapwbc@diodecom.net for more information.

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Center for Rural Affairs -- Rural Enterprise Assistance Project
145 Main St.    PO Box 136    Lyons, Nebraska  68038
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