This research brief compares the experiences of rural and urban entrepreneurs using data from the 2022 National Survey of Military-Affiliated Entrepreneurs. Local business and entrepreneurial ecosystems are often keys to the success of veteran entrepreneurs. Entrepreneurial resources assist with the cultivation and effective utilization of social connections, the identification of suitable mentors for success, access to appropriate financial resources, and the acquisition and application of business acumen and management proficiencies. The specific dynamics of a particular geography are unique, however one way to examine differences between places is to consider the differences between urban and rural places. This research brief provides insights into the different experiences of veteran entrepreneurs across place – both strengths and weaknesses, for urban, rural, and sub-categories of rural places.
A Few Key Takeaways
Population
3 of 17 million veterans
in the U.S. live in non-metropolitan areas.
68,000 of 413,000
veteran-owned employer firms are in rural places.
Rural vs Urban Businesses
Veteran business owners who have a family member as a co-owner:
| About how far do you have to travel to access healthcare? | Rural | Urban |
| Less than 5 miles (under 10 minutes with no traffic) | 17% | 25% |
| 6-10 miles (around 15 minutes with no traffic) | 22% | 32% |
| 11-20 miles (around 25 minutes with no traffic) | 21% | 23% |
| 21-30 miles (around 35 minutes with no traffic) | 15% | 10% |
| More than 30 miles (more than 35 minutes with no traffic) | 26% | 10% |
Business Resources
| When thinking about the resources you need to operate a business, do you agree or disagree with the following statements: (present who agree/strongly agree) | Rural | Urban |
| Resources in my community are available to me within a reasonable physical distance | 47% | 57% |
| The types of resources that are available in my community are relevant to my business needs | 33% | 43% |
| I would prefer to use in-person resources, but do not because relevant resources are not available near enough to me | 34% | 28% |
Top Business Challenges
Rural business owners were significantly LESS LIKELY than urban business owners to report:
Opening a business bank account to be easy or very easy:
Asking others for assistance to be easy or very easy :
Finding a local business incubator or nonprofit that helps business owners to be easy or very easy:
Rural business owners were significantly MORE LIKELY than urban business owners to report:
Finding a local business incubator or nonprofit that helps business owners to be difficult or very difficult:
Differences Between Types of Rural Communities
The places collectively referred to as “rural” encompass remarkably diverse communities. For example, some small towns may rely on tourism while smaller population places might be primarily agricultural. Individuals in different categories of rural places may have different business needs, enter entrepreneurship for different reasons, and may operate different types of businesses.
To explore some of this internal diversity, the next sections compare RURAL places by descending population density:
- Small city or town (under 50,000)
- Rural but not farm or ranch
- Farm or ranch
Veteran entrepreneurs in small city or town communities are:
- Least likely to include a product-based component, reported higher average revenues, and were less likely to have financial losses during 2021.
Veteran entrepreneurs in rural non-farm communities are:
- Slightly more likely to start a business out of necessity rather than opportunity.
- Slightly less likely to start a business because they want a challenge, or to earn extra income they didn’t necessarily need.
Veteran entrepreneurs in farm or ranch communities are:
- Most often considered it realistic their business would double in the next five years and were the most confident that growing their business would not be risky to the business’s survival.
- By far needed the most capital to grow or expand their businesses in 2021 and were the most likely to secure either partial or completely the capital they needed.
Most Common Barrier to Achieving Entrepreneurial Goals
| Small city or town | Rural but not farm or ranch | Farm or ranch |
| Problems finding good employees/contracted personnel (39%) | Lack of access to capital (30%) | Lack of access to capital (54%) |
Business Debt
RURAL: Average $398,930 / (URBAN: Average $534,800)
Applied for credit in the past year?
RURAL: Average $398,930 / (URBAN: Average $534,800)
| Small city or town | Rural but not farm or ranch | Farm or ranch |
| 36% turned down or not given as much credit as applied for. | 49% turned down or not given as much credit as applied for. | 50% turned down or not given as much credit as applied for. |