What Kind of Small Business Can I Do in A Rural Area?

. 7 min read
What Kind of Small Business Can I Do in A Rural Area?

Gone are the days when only urban areas were viable for small businesses. It’s 2021 and rural areas have various business opportunities that you can explore.

Although small businesses in rural areas have their own unique needs and require a different infrastructure, they still can be excessively profitable. In fact, rural areas have played a vital role in taking the Indian economy forward.

A ton of India’s population is settled in rural areas, and that’s why you must tap into that market. All you have to do is tap into the right kind of business.

If you wish to start a small town business in a rural area but are facing difficulties narrowing down one option, don’t worry. We’ve got you covered.

But before we get into what kind of small businesses are profitable in rural areas, let’s understand the advantages of starting a business in rural areas.

Advantages of starting a small business in a rural area

1. Less Overhead Expenses

The ongoing business costs are known as overhead expenses. They can be taxes, insurance, utility bills, or maintenance fees.

Compared to an urban area business, you would have less overhead expenses in a rural area because of economic factors.

And less overhead expenses or lower costs means more profit. You can then use the profit to reinvest in your business or for expansion purposes.

2. Easy procurement of raw material

As rural communities are responsible for churning out raw material, small businesses can easily procure raw material in rural areas.

Proximity to raw material and low prices would ensure that you ship out high-quality products at a lower cost. For instance, if you’re a seafood restaurant operating from a seaside, rural town, you can easily procure fish or crabs at a lower price.

3. Access to cheaper mortgages

There are various reasons why mortgages in rural areas are cheaper when compared to urban areas. One of them is lack of access.

As maximum rural towns have difficult access to hospitals, shopping centres and recreational centres, it is less appealing to people, making mortgages cheaper and affordable.  

4. Less competition

Unlike urban areas, where the competition among businesses is immense, rural areas tend to have less competition. In a rural town, you would have few competitors, depending on your industry or niche. That would give you a steady and extensive customer base as long as you are fulfilling a need.

5. You get to help the rural economy

Compared to operating a business in an urban setup, you would be able to help the economy in a rural area due to less competition.

It would not only give you monetary satisfaction but personal satisfaction as well. In fact, by employing individuals, you would contribute to lowering poverty.

However, despite the many advantages, before diving into a small business in a rural area, you must ensure that the product or service would do well with the locals.

Here are a few small businesses that you can consider opening in rural areas.

1. Small Scale Departmental Store

Come to think of it, all households in the world need groceries and other essentials.

That is why launching a small-scale departmental store is one of the profitable small-scale business ideas in rural India.

All you have to do is take a shop or multiple shops on rent and reach out to the product suppliers. Ensure that you do ample research about the products that would do well with the locals and satisfy their needs.

2. Milk Centre

For this, you would have to reach out to a dairy farm. The job of milk centres is to collect milk from the villages and sell the same to dairy farms.

You would be needing a few pieces of equipment like billing software and weighing machines for your everyday activities. As breeding cows and buffaloes are common in rural areas, having a milking centre would be extremely profitable.

3. Mobile and Accessories Store

As technology and electronics are becoming necessary, more and more individuals are looking to invest in them. However, you must not keep very costly phones or accessories and only invest in the saleable ones.

Moreover, you can also provide them with the option to get their mobile repaired. It would ensure that your customers don’t go elsewhere for repair. Once your business starts booming, you can experiment with laptops and other high-end electronic products.  

container truck, ship in port and freight cargo plane and import-export commercial logistic

4. Transportation Service

Any business, small or big, should ideally solve a problem or serve a purpose. Transportation in rural areas is a big problem. And there lies a business opportunity. Many rural areas and villages don’t have efficient taxi service.

In cities like Delhi or Mumbai, you can book a cab on Uber or Ola easily. However, that isn’t the case with rural areas. Starting a taxi or auto service can be extremely profitable and a viable small business venture.

If you keep the pricing affordable, individuals will reach out to you. You can start this business with a minimal investment if you already have a car or auto.

5. Growing cotton or tea

Tea and cotton are two items that are highly in demand across the country. A tested way of generating income would be to grow these crops in rural areas and sell them.

Individuals are willing to buy or invest in high-quality crops. And you should provide them with just that. If you’re able to provide them with quality tea or cotton, they’ll keep coming back to you.

6. Fitness Centre or Gym

Many people think that opening a gym or fitness centre in rural areas is a bad idea. And they couldn’t be more wrong. You don’t need to open a posh fitness centre but one that satisfies the locals’ requirements.  

It’s also worth mentioning that the boutique fitness trend is booming and shows no sign of slowing down. So while the odds are in your favour, take action. Start with a few pieces of equipment and add more as you progress slowly.  

7. Educational Institution

Education in India is not just a huge business opportunity but also a responsibility. Especially in rural areas where individuals don’t get access to quality education or specialised courses.

The best part of this business is that it doesn’t require a massive investment. So much so that you can even start it from your home or a small centre.

Before starting this business, you can do your research by visiting similar institutes in cities. This kind of business in a rural setup would grow with word of mouth. So make sure that you provide good quality education to individuals.

8. Poultry Farm

Another profitable small business idea for a rural area is a poultry farm. You don’t require a lot of land for this. You would have to rear chicken and sell them eventually.

It would be beneficial to start this business on a contractual basis with a vendor. The payment would take place either by the chicken’s weight or by the number of chickens.

But make sure you don’t get into this business alone as it requires slightly more capital than the ones mentioned above. Moreover, it would ensure that all the liability doesn’t lie on your shoulders.

9. Freelance Writing

Who says you can’t be a freelance writer in a rural setup? As the cost of living is low, you would be able to save a lot of money and invest the same in yourself or your business. You can write for local businesses, both online and offline. Moreover, you can also educate them about content marketing and offer your services.

Modern fashionable brand interior of clothing store inside shopping center

10. Clothing Store

Fashion trends reach rural areas faster than you can imagine. The problem is that they don’t have access to a variety of such clothing in their surroundings. And that is a great business opportunity.

But mind you, providing quality fabric should be your utmost priority. For that, you can enter into a commission-based agreement with garment suppliers who would provide you with a variety of fabrics.

Once your business starts booming, you can experiment with different styles and patterns.


Business opportunities in rural areas are waiting to be exploited. All you need to do is be more aware of the options and possibilities at hand. If there’s a perfect time to start a small business in a rural setup, it is now.

However, despite the numerous advantages that a rural area offers to businesses, you’d have to ideate, work hard, and reinvent to survive in the long run.

All the businesses mentioned above offer humongous possibilities and growth. So go ahead and take your pick.

Also read:

1) Online Business Ideas You Can Start Quickly
2) What online business can I do to make money? Here are the top-6 ideas for you.
3) Where Do the Best Business Ideas Come From?
4) Best Home Business Ideas in 2020

5) OkCredit: All you need to know about OkCredit & how it works.


Q. What are some small businesses that I can start with 25K?

Ans. Making handmade candles, jute bags and buttons are some businesses that you can start with 25K.

Q. What small business should I open?

Ans. Before opening a business, consider your skillset along with your strengths and weaknesses. Once you have done that, consult local experts in that field.

Q. What are the benefits of opening a small business in a rural area?

Ans. Easy procurement of raw materials, less competition, and access to cheaper mortgages are some benefits.

Q. Does having a partner guarantee success in a small business?

Ans. No, it doesn’t. Every business is unique, and you must figure out what works for you. If your business requires more capital and expertise, go for a partner by all means. However, if you don’t need massive funds and added skills, it’s best to work alone.