Is it Time for Entrepreneurs to Move to ‘Red’ States?
Hundreds of little towns suffering from economic meltdown may also offer business opportunities to determined entrepreneurs.
Additional reporting by Evan Sachs.
One of the most riveting stories of the 2016 presidential election is not who won, but that there are large parts of the United States experiencing a completely different economic realities from each other. People often associate the “blue states” – which went Democratic in the last presidential election – with economically booming urban areas like New York City or Los Angeles.
Meanwhile, people associate many of the “red states” that went for Trump with struggling rural areas that have lost manufacturing and mining jobs to automation and alternative energy. My relatives live in an area that illustrates this story – a small Midwest town close to Bloomington, Illinois. The area used to have a number of factories, but now struggles. Families of all types could make a decent living by working “on the the line.” But as manufacturing became even more mechanized and globalization became the new rage, the factories began to close. A huge number of those manufacturing jobs disappeared.
Last year, Indeed.blog talked about the differences in access to jobs and opportunities in swing states. One of the key issues discussed? The ability to connect people with opportunities in communities where there seemed to be fewer jobs available.
Politics aside, what many of these long-suffering red states need are people with a business vision.
People who could turn things around, from small towns to big cities. Think this is crazy talk? Chip and Joanna Gains of the TV show Fixer Upper – owners of the Magnolia Market – are a great example of a growing trend for entrepreneurs to move to more rural areas. They ended up in Waco, Texas, but there are tons of rural areas that could use fresh blood in the form of eager entrepreneurs.
So how can you make your business a success? First, understand what the town lacks by way of services or manufacturing. Is it a coffee shop or cute restaurant? A way for people to make a new product using skills that they gained from working at a factory? Do people wish there was a nice place to have a happy hour? Or an affordable way to get trained to use new technology? Find out what your new town needs and create a solution. When starting a new business, focus on a problem that you would like to solve while serving the community.
Once you’ve decided on your business idea, figure out a way to collaborate with other businesses in your town. If you’re in construction like Chip and Joanna, connect with other craftsmen and use their services or goods whenever possible. Collaborate or network with community leaders on creating a new vision for the town that you’re in. But stick to small business ideas – at least initially. Starting small can help you grow in the long-term.
Of course, you’ll need to do your research into the best practices in your field before you dive in. You’ll not only want to know who will be interested in your products, but to do homework on sustainability of demand, competitive landscape, and taxes. Taxes may even vary depending on how full-time your new business is – is it your full-time job? Is it a hobby?
And look around for the right land or building for your business. If you plan to get into farming, for example, you’ll want to consider soil quality of the land you buy. And think about how close you’ll be to the markets where you may want to sell your goods.
And would you prefer to own or lease? There are advantages to both. For example, while you have complete control over land that you own, ownership often more expensive than leasing. And there are certainly people out there with idle farmland who would like to see somebody put it to good use.
In my view, there are a lot of opportunities available in the places that you would least expect.
Take some time to visit your relatives in those small towns and ask around. You may find yourself starting a business, reenergizing a community, and setting off a chain of events that can last generations. You’ve just got to know where to look!