Rural business start-up challenges (and how to overcome them)

Starting a business in a rural part of the country? Read our expert guide to the challenges of setting up a new venture in a rural area and how to get past them.

More than 551,000 businesses were registered in rural areas in England in 2019–2020, according to the Department for Environment, Food & Rural Affairs, with a significant proportion of these being small businesses and sole traders. Unsurprisingly, many of these new businesses are linked to agriculture, forestry and fishing, but entrepreneurs with expertise outside these categories can enjoy commercial success.

 

That’s not to say that rural business owners don’t face challenges. They experience similar dilemmas as their urban counterparts and sometimes have to deal with additional stumbling blocks with unique problems when it comes to recruiting staff, transportation and connectivity. However, if you’re looking to launch a new start-up in a rural area of the UK, don’t be fazed, as there are ways to overcome any barriers.

Want to learn more about starting up a rural business?

Learn about the essential numerical skills required for accounting and bookkeeping with our free Rural entrepreneurship in Wales course. As part of our Learn with Start Up Loans partnership with the Open University, our online course is free to join, delivered by experts and includes a free statement of participation on completion.

 

Funding for rural businesses

Regardless of where a business is based, finding funding for an entrepreneurial venture can be a challenge.

While the cost of living in rural areas across the UK is generally cheaper than in major cities, especially in terms of rental and property prices, you’ll still need to budget and spend carefully when first starting up. If you’re dreaming of starting a new enterprise and still earning, it’s wise to test the waters by continuing to work part-time before fully taking the plunge.

Government finance and support schemes for various businesses, including travel and leisure, agriculture and food, and wholesale and retail, are listed at GOV.UK. Your local council may be able to help with some of the associated expenses of starting a business, such as capital equipment and outsourced project expertise.

While not an exhaustive list, examples of rural funding include:

  • The Prince’s Countryside Fund – provides more than £1m every year in grant and initiative funding to rural projects. Grants of up to £10,000 are available.
  • The Henry Plumb Foundation – helps young people aged between 18 and 35 start up a food or farming business. Grants of up to £3,000 are available.

 

Connectivity

One of the more frustrating issues of any rural business can be the lack of broadband connections and slow internet speeds.

The Government has set a goal for at least 85% of the population to have access to gigabit-capable broadband by 2025, and it has committed £5bn to connect the hardest-to-reach parts of the UK. Until that happens, view your area’s availability on Ofcom’s mobile and broadband checker and ask your provider for an upgrade.

Under the Universal Service Obligation (USO) scheme, anyone with a download speed of under 10Mb, or who pays over £46.37 a month, can ask BT for an upgrade. The USO scheme will contribute up to £3,400 per premises towards this. Fixed wireless internet may also be an alternative broadband solution for rural areas, and perhaps Starlink broadband, from SpaceX, which is already available in some remote UK spots.
 

Transport and infrastructure

Inadequate transport infrastructure can have an impact on rural businesses.

Getting supplies and making deliveries can be a slow, and therefore expensive, process if you’re situated at the end of a single track, miles away from any motorway – and there could be weight restrictions for goods vehicles. Even if you’re near an A-road, that comes with problems too – the A30 in the South West, for example, can be a traffic nightmare during the summer as it’s the main route to popular holiday destinations in Devon and Cornwall.

Think carefully about the location of any rural business, particularly if you’re hopeful for drive-by custom. Is there a decent bus service or train link? Would it be more practical and financially beneficial to rent a workspace in a place where more potential customers can easily find you? And if you’re selling goods, is drop shipping a viable option?

A lack of amenities such as banks and building societies – which are closing at a rate of around 50 a month according to consumer watchdog Which? – may cause additional heartache if you have to travel a distance to deposit earnings or access cash, even an ATM. Being organised and planning is critical.

See if a mobile banking van visits your area or join forces with other trusted businesses and divvy up bank trips. Some rural places have pop-up post offices, in libraries and village halls, so make the most of its banking services. If posting orders, check to see if courier delivery is more convenient as you can often drop off goods at parcel shops.
 

Recruitment and skills shortage

You may be a one-person set-up at the moment, but if your rural business were to expand and you need to recruit staff, remember that in less-populated rural areas, you may struggle to find the same talent pool as in urban settings. That’s not to say there won’t be suitably skilled individuals living nearby, but be realistic about the response to any vacancy, especially if employees must travel by car to your workplace.

However, the coronavirus pandemic has proved that it’s perfectly feasible to do your job remotely in some industries. For small businesses, hiring a virtual assistant may be a better option financially. When searching for a new team member, consider contacting local colleges and training centres to find qualified candidates or headhunt via your business network.
 

Networking and support

When it comes to connecting with other new entrepreneurs and creating a support network to help with those inevitable starting-out hiccups – being a rural business doesn’t necessarily mean additional drawbacks.

Yes, there’s the chance you could feel isolated if you’re a distance away from any social hub, but you may also benefit from living in a small, close-knit community where locals go out of their way to support one another and buy local produce. For networking and mentoring opportunities, visit your relevant council’s website, as well as the British Chambers of Commerce, and join local social media groups.

Go along to country shows, farmers’ markets and craft fairs, too – these events are often an excellent way of meeting other small business owners and making new acquaintances who could perhaps share insider rural knowledge. You’ll find people are only too happy to chat.

 
 

Learn with Start Up Loans and help your business get off the ground

Thinking of starting a business? Check out our free online courses in partnership with the Open University on being an entrepreneur.

Our free Learn with Start Up Loans courses include:

Plus free courses on finance and accounting, marketing, project management, management and leadership.


 
 
Disclaimer: While we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.

Feeling inspired?

Register