Building Assets for the Rural Future

Support Rural & Low-Wealth Entrepreneurs

Support Rural & Low-Wealth Entrepreneurs

The Opportunity

Over three-quarters of the businesses in North Carolina employed fewer than ten employees each in 2006. Almost all of the businesses—some 98%—employed fewer than 500 employees.[1]  These relatively small businesses are responsible each year for creating the majority of net new jobs across the nation.[2] Small businesses therefore play an important role in the state’s overall economy, and for purposes of this publication, ownership represents an asset-building opportunity for individuals. Business ownership is correlated with increased household income and wealth, particularly when multiple businesses are owned.[3]  Microenterprises—small businesses with four or fewer employees—have been found to contribute to poverty reduction, increase household income, and reduce reliance on government assistance among low-income microenterprise owners.[4] At the community level, small, locally-owned businesses have been observed to be better stewards of the local environment and to make positive contributions to the social and civic infrastructure of a community.[5]

Rural areas therefore stand to gain from boosting entrepreneurship, and several approaches have been employed to overcome prevailing challenges such as a lack of local investment capital, a local culture perceived to be hostile to small business development and entrepreneurship, absence of entrepreneurial networks, and inadequate training and support infrastructure.[6]

How the Tactic Is Applied

  • Provide entrepreneurship education
  • Offer training and support services for rural entrepreneurs
  • Ensure rural small businesses have access to capital

Provide Entrepreneurship Education

NC Community College System (North Carolina)
NC REAL (North Carolina)

Entrepreneurship education geared toward both young and old has been employed in urban and rural areas alike. When entrepreneurship education programs are instituted in rural areas, the aim is not only to develop a sizeable and diverse “pipeline” of aspiring and new entrepreneurs, but also to cultivate a supportive culture in the community for established entrepreneurs.[7]

Adult entrepreneurship education of some form is offered at most of North Carolina’s 58 community colleges, either through a degree program or non-degree classes.  The degree programs—offered at only fifteen of the colleges—are designed to prepare aspiring entrepreneurs for opening their own businesses upon graduation, with classes in finance, marketing, economics, and technology skills.

Less prevalent is youth entrepreneurship education.  In rural North Carolina, NC REAL[8] has developed an educational curriculum that focuses on rural youth.  Under the REAL model, local teachers, community organization staff, local government agency staff, and other community members are trained in REAL’s hands-on, experiential entrepreneurship education program.  Students learn entrepreneurship skills by developing their own business plans, creating their own business entities or projects, running a school-based business, and engaging in budgeting and banking activities.  REAL curricula are available for elementary schools, high schools, and youth camps.

Offer Training & Support Services for Rural Entrepreneurs

Small Business Centers (North Carolina)
Small Business & Technology Development Centers (North Carolina)
Mountain BizWorks (North Carolina)
Appalachian Center for Economic Networks (Ohio)

As noted previously, two important challenges for rural entrepreneurs are inadequate training and support infrastructure and a perceived lack of a supportive entrepreneurial culture in rural areas.  These concerns are partially addressed by the statewide network of  Small Business Centers (SBCs) at each of the state’s community colleges as well as the Small Business & Technology Development Centers (SBTDCs) housed by the state university system.  These programs offer training, workshops, networking and mentoring opportunities, business counseling, and other related support services.  However, these resources do not meet all of the needs of rural entrepreneurs,[9] so several communities have developed alternative or complementary programs.

Mountain BizWorks in Western North Carolina is one of the oldest nonprofit business development organizations in the state and offers rural entrepreneurs services such as business planning courses, one-on-one business coaching, and networking opportunities. Through its Foundations business training program, aspiring entrepreneurs learn the basics of starting and building a small business, including organizing a business, marketing products, analyzing cash flow, and developing a comprehensive business plan.[10]  Once businesses are ready to move beyond the start-up phase, Mountain BizWorks offers individualized coaching programs for business owners seeking to expand their businesses.[11]  Additional support is offered through a membership program. Members receive access to technical assistance, discounts on training programs, marketing support and additional advertising opportunities, admission to networking events, and free professional services from attorneys, accountants, and business developers.[12]  In conjunction with these services, its affiliate, Mountain BizCapital, offers loans of up to $50,000 for business startups and expansions.

In rural Appalachian Ohio, the Appalachian Center for Economic Networks (ACEnet) provides business development services for rural and low-income entrepreneurs, such as a business incubator,[13] product development, business planning, networking, training and counseling, financing, and e-commerce support.  Although it serves all industry sectors, ACEnet’s rural focus has helped it develop special expertise in incubation services for agricultural and food businesses.  As a result, ACEnet now runs training programs designed for the agriculture and food sectors, runs a kitchen and food incubator, and has operated a Food Ventures Center that has assisted family farmers and regional food entrepreneurs since 1996 with product development and market access. Other rural programs specifically directed at developing food-related industries are discussed later in the report.[14]

Ensure Rural Small Businesses Have Access to Capital

Mountain BizWorks (North Carolina)
Kentucky Highlands Investment Corporation (Kentucky)
Coastal Enterprises, Inc. (Maine)
Chatham Loan Fund (North Carolina)

Entrepreneurs require different types of capital (grants, debt, or equity) for various stages of business, ranging from start-up and seed capital to venture capital for growth.  For rural entrepreneurs, however, access to capital is a perpetual challenge.[15] Financial institutions and venture capital firms are not as prevalent in rural communities, loans tend to be more expensive in rural areas, and rural capital investment opportunities are in general less appealing to investors, making it less likely that investors will look to rural areas for opportunities.[16]  Interviews conducted for this publication revealed that the recent banking crisis has only made matters worse, as banks have severely cut back all forms of lending, particularly for start-up companies. Low-income entrepreneurs face even greater obstacles, as they typically lack sufficient collateral required for traditional financing. Organizations and institutions that fill the financing gaps are therefore important to the success of rural entrepreneurs.

Appearing throughout this publication are several examples of private organizations that offer innovative financial products to rural small businesses. Mountain BizWorks, mentioned in the previous approach, provides various loan products for rural entrepreneurs in Western North Carolina. Kentucky Highlands Investment Corporation[17] is the oldest community development venture capital firm in the country, and it offers both equity and debt financing for rural Kentucky businesses at all stages.  In rural Maine, Coastal Enterprises, Inc. (CEI),[18] offers loans and equity financing to businesses meeting specific profiles, such as those providing quality job opportunities for low-income workers; those related to waterfront, marine, or agricultural industries; and those being established by refugees and immigrants.  For qualifying businesses, CEI grants lending priority to low-income or low-wealth rural entrepreneurs or to entrepreneurs who will hire low-income employees into jobs with family-sustaining wages, benefits, and opportunities for advancement.

North Carolina local governments possess legal authority to establish similar financing programs.[19] For example, the Chatham Loan Fund was established out of a partnership between Chatham County and the nonprofit Center for Community Self-Help. Notably, the fund gives preference to young entrepreneurs and businesses within targeted industry clusters.[20]  

Learn More

Shaw Canale
Chief Executive Officer
Mountain BizWorks
Asheville, NC


On the Internet


Chatham Loan Fund

NC Rural Center – Institute for Rural Entrepreneurship

Spurring Entrepreneurship: Roles for Local Elected Leaders

[1]  U.S. Census Bureau, Statistics of all Businesses: 2006: All Industries North Carolina, available at http://www.census.gov/epcd/susb/latest/nc/NC--.HTM (last visited Apr. 2, 2015). 

[2] Brian Headd, An Analysis of Small Businesses and Jobs 10-12 (SBA Office of Advocacy, 2010), available at https://www.sba.gov/sites/default/files/files/an%20analysis%20of%20small%20business%20and%20jobs%281%29.pdf (last visited Apr. 2, 2015); Kelly Edmiston, The Role of Small and Large Businesses in Economic Development, 2007 Economic Review 77 (2007).

[3] George M. Haynes, Income and Wealth: How did Households Owning Small Businesses Fare from 1998 to 2007 (2010), available at  https://www.sba.gov/advocacy/income-and-wealth-how-did-households-owning-small-businesses-fare-1998-2007; CFED, Desktop Study: SMEs and Poverty Reduction 21 (2009), available at http://www.cfed.org/assets/pdfs/SME_Desktop_Study.pdf.

[4] CFED, above note 3, at 21-22.  See also Elaine L. Edgcomb & Joyce A. Klein, Opening Opportunities, Building Ownership: Fulfilling the Promise of Microenterprise in the United States 64-70 (2005), available at http://fieldus.org/Publications/FulfillingthePromise.pdf; Peggy Clark & Amy Kays, Microenterprise and the Poor: Findings from the Self-Employment Learning Project Five-Year Study of Microentrepreneurs vii-ix (1999), available at http://fieldus.org/Publications/Microenterprise_and_Poor.pdf.

[5] Jonathan Q. Morgan, William Lambe, & Allan Freyer, Homegrown Responses to Economic Uncertainty in Rural America, 3 Rural Realities 2, 8 (2009).

[6] Erik Pages & Deborah M. Markley, Understanding the Environment for Entrepreneurship in Rural North Carolina 6, 8-14 (2004), available at http://www.ncruralcenter.org/images/PDFs/Publications/markelypagesreport....

[7] Ibid. at 8.  See also Brian Dabson, et al, Mapping Rural Entrepreneurship 31 (2003), available at  //www.energizingentrepreneurs.org/content/cr_5/2_000049.pdf.

[8] “REAL” stands for “Rural Entrepreneurship through Action Learning.”

[9] Pages & Markley, above note 6, at 9-10 (noting from interviews with rural entrepreneurs that SBCs are not staffed to handle the full breadth and depth of services required by rural entrepreneurs and that SBTDCs are limited by their focus on existing growth businesses to the exclusion of new or aspiring entrepreneurs).

[10] Interview with Shaw Canale, Executive Director, Mountain BizWorks (January 19, 2010).

[11] Ibid.

[12] Ibid.

[13] Business incubators typically provide shared commercial space, shared equipment, and shared staff, as well as  free or low-cost technical assistance and consulting services for start-up businesses that may not be able to afford them otherwise.  While business incubators are often associated with a building or commercial space, incubation activities can take the form of technical assistance and other services for nascent businesses without offering low-cost commercial space.

[15] Dabson, et al, above note 7, at 40-41.  See also Nancy Stark, Spurring Entrepreneurship: Roles for Local Elected Leaders, 69 Popular Government 31, 31 (2004), available at http://www.sog.unc.edu/publications/articles/spurring-entrepreneurship-roles-local-elected-leadersf.

[16] Dabson, et al, above note 7, at 40. 

[17]More on the Kentucky Highlands Investment Corporation appears in the discussion of community development venture capital funds in 2.1. Maximize Asset-Building Potential of Capital Investment and Economic Development Incentives, page 48.

[18]Coastal Enterprises, Inc., is also discussed in 2.1. Maximize Asset-Building Potential of Capital Investment and Economic Development Incentives, page 48; and 3.1. Protect Agricultural Businesses and Jobs, page 68.

[19] David M. Lawrence, Economic Development Law for North Carolina Local Governments 46-47 (2000) (explaining the legal authority for local government loan programs).

[20] Chatham Loan Fund, http://www.chathamedc.org/resources/chatham-loan-fund (last visited April 2, 2015).

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