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This file is a research paper titled “Exploding Myths About Rural Entrepreneurship” by Terry F. Buss and Mark Popovich. It challenges common misconceptions about rural entrepreneurship using survey data from 1,428 start-up entrepreneurs and employment tax files from five states: Iowa, North Dakota, Michigan, Maine, and Arkansas. The paper debunks several myths, including:
- Myth 1: Rural new businesses do not contribute much to local economies. (The study found they contribute substantially to job creation).
- Myth 2: Urban areas boast proportionately more new firms and jobs than rural areas. (The study found similar rates of new firm and job creation in both rural and urban areas).
- Myth 3: Urban areas are more diversified than their rural counterparts. (New rural businesses were found to be just as diversified as new urban ones).
- Myth 4: Start-up entrepreneurs face greater risks in rural than urban areas. (Rural new businesses had high survival rates, comparable to urban areas).
- Myth 5: Rural entrepreneurs do not have access to bank financing. (More than half of successful new businesses were bank-financed).
- Myth 6: Rural enterprises require little capital to start. (The average start-up capital was found to be substantial, around $78,000).
- Myth 7: Rural entrepreneurs earn little return on their business ventures. (Only a small percentage earned at or below poverty levels, often due to reinvestment).
- Myth 8: Rural businesses do not provide health insurance. (While 31% provided health insurance, about 90% of entrepreneurs and their families were covered through various sources).
- Myth 9: Rural entrepreneurs serve only rural markets. (Many rural businesses served markets extending beyond 50 miles).
- Myth 10: Rural entrepreneurs do not have access to technical assistance. (Technical assistance was widely available and utilized).
- Myth 11: Rural displaced workers contribute little to new businesses. (Displaced workers accounted for a significant percentage of new businesses).
The study concludes that rural economies are not as hostile to new business entrepreneurship as often assumed, and rural entrepreneurs are important contributors to local economies. It highlights that rural new businesses are competitive, often exporting goods and services, and are not just “mom and pop” operations.
