What No One Tells You About Growing a Business in a Small Town

Running a business in a small town comes with its own set of unique challenges—and incredible opportunities. From the “fishbowl effect” where everyone knows your every move, to the limited customer base and resources, small town business life is real and raw. But it also comes with hidden advantages most city businesses would envy: deeper relationships, less competition, and word-of-mouth that spreads like wildfire.

In this episode, I’m pulling back the curtain on what it really takes to grow in a small town. You’ll learn practical marketing strategies tailored for smaller communities, how to leverage local connections, and when it makes sense to expand beyond your own backyard. If you’ve ever felt like your town is too small for your dreams, this conversation will show you the powerful advantages right at your fingertips.

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Transcript

Welcome to the new School of Marketing podcast. I'm Bianca McKenzie and this is the place where we break down marketing strategies that actually work without the overwhelm. Before we dive in, I want to acknowledge the traditional owners of the land I live and work on, the Palawa people of Lutruwita.

I pay my respects to their elders, past and present and I acknowledge the deep connection they have to this land, culture and community.

Now let's dive in and make marketing work for you.

So if you've ever felt like all the business advice out there is written for people in Sydney or Melbourne, or if you've wondered whether you need to move to a big city to grow a successful business, or if you're tired of marketing strategies that assume you have access to millions of potential customers, then this episode is for you.

Today we're talking about the realities of growing a business in a small town.

I'm going to talk about the unique challenges, the surprising advantages and the marketing strategies that actually work when your entire potential local market could fit in a football stadium.

Because here's what no one talks about.

Small town business has its own rules and once you understand them, you might just discover you have advantages that big city businesses would kill for.

Lets start with what it's actually like to run a business in a small town. Because if you're not from one, you might not realise just how different it is.

First up, everyone knows everyone.

And that sounds lovely until you realise it means your reputation travels faster than a bushfire.

One unhappy customer doesn't just leave a bad review.

They tell their sister who mentions it at the school, pickup who brings it up at the local cafe, and within a week, half the town has heard about it. Your potential local customer buyer base is tiny.

If you're in a town of 5,000 people, your actual target market might be like 200 people on a good day.

You can't just keep finding new customers forever, you'll run out.

And also, resources are limited.

You probably don't have access to the same suppliers, the same services or talent pool as businesses in major cities that you know fancy marketing agency everyone raves about.

Well, they might not be taking clients in regional areas, but here's what people don't actually tell you. These limitations, or so called limitations, can actually become your biggest advantage if, if you know how to work with them.

And here's what the hidden advantages of small town business are, and a little bit of a backstory.

I grew up in a small town, 2,500 people in my little town.

I moved to a big city and I became kind of invisible. It was nice for a while.

Moved to a big city in Australia and then we moved to a small town or a lot smaller.

So everyone kind of knows everyone.

So I want to tell you about these advantages.

The first one is that genuine relationships matter more than followers.

In a small town, your Instagram follower account means nothing, at least not if you're a jerk at the local hardware store, at the supermarket. But if you are really genuine and you're helpful and you're trustworthy, people will go out of their way to support you, even if your competitor is cheaper or more convenient.

I know a mechanic in a town of 3,000 people who has people driving from an hour away because he's built such a solid reputation for honesty.

He's never run a Facebook ad in his life, but he's booked out for months because everyone knows he won't rip you off.

So really, relationships matter more than your followers.

Advantage number two is less competition is actually more opportunity.

Yes, your market is smaller, but so is your competition.

In a big city, there might be like 50 people doing what you do. In a small town, you might be the only one or one of, you know, two or three.

And that means that you can often charge premium prices because people value convenience and they value local service.

They'd rather pay a bit more to support someone local than deal with a faceless company from the city.

Advantage number three is word of mouth is supercharged.

In big cities, word of mouth travels slowly through lack of loose networks. In small towns, it travels at light speed through tight networks.

One happy customer can generate like five new customers just within a month, just through some casual conversations. It's honestly, it's on steroids.

Advantage number four, you actually get to know your customers.

Not just, you know, demographics and data points, you get to know them as people.

You know that you know Sarah from the post office is renovating her kitchen and that Mike from the pub is thinking about starting a side business. And Jenny from the school is looking for someone to help with their mum's garden.

And this level of personal knowledge really allows you to provide incredibly personalised service and like really spot opportunities that big Businesses would never see. So like, you get to know people. It's amazing, right?

So how do you actually market in a small town?

Forget most of what you've learned from online marketing courses.

I know, bit cool, right? But here's what works in reality.

First one is become the go to expert In a small town.

You can actually become the person for whatever you do. Not just, you know, a good plumber, but the plumber that everyone calls.

And here's how to do this.

Become genuinely excellent at what you do and then make sure that everyone knows about your expertise.

Like write a monthly column in a local newspaper, the local paper, offer to speak at community groups, sponsor the local footy team,

show up at community events and actually talk to people.

Like, your goal is not to be everywhere online, it's to be everywhere locally. You're like that person. Like, oh, that's so and so. Who does this?

Because people will notice.

The second one is master the local networking circuit.

Every small town has a networking circuit, whether it's, you know, the local business association, the rotary club, the chamber of commerce, the school parents club, sports clubs. And they aren't just social groups, they're actually where business gets done. It's quite interesting, but here's the key. Don't just show up to sell, show up to contribute, volunteer for committees, help out with events and be genuinely useful to your community.

And your business will actually follow naturally because you know, you're seen, you're like, you're everywhere. You're like that helpful person and people will talk. You know, that's so and so from blah blah, blah.

I know a graphic designer who volunteered to do all the promotional materials for a local group and she's never advertised their business, but she's fully booked because everyone in town has seen her work and they know she's reliable.

People talk, it's incredible.

Number three is to create multiple revenue streams.

Remember how I said that your local market is tiny and that means that you can't rely on just one service or product.

You need to think creatively about how to serve the same customers in different ways.

Or you might just have to do something slightly different.

So for example, the local baker.

They might also cater events or run cake decorating classes or sell branded merchandise.

The accountant might offer bookkeeping, business coaching and maybe tax courses for locals.

A fitness trainer might run group classes, personal training, and maybe like some corporate wellness programs for some other employers in town. Bigger employers in town.

Think about what other problems your customers have that you could solve. Because just offering one thing Might not kind of keep you in business if you're small. Like, if your town is really, really small.

We live near a regional city, so it's not that bad.

Number four is partner with other local businesses.

So in big cities, other businesses are usually competitors. In a small town, the their potential partners because you're all trying to serve the same small community.

And cross referrals work brilliantly.

You know, like the hairdresser can recommend a beautician, who can recommend a massage therapist who recommends a personal trainer. Like it's, you know, that kind of network. Everyone wins because customers get great service and businesses get qualified referrals.

You can also partner on events or joint promotions or package deals.

Slightly off topic, like, my local butcher is in the same building as the local baker. Like the bakery and the butcher are in the same building.

It's just super useful.

So having, you know, joint promotions or joint package deals.

For example, a wedding photographer can team up with the florist and a caterer to like, offer a complete, like, wedding package.

So get really good at partnering and working with other businesses.

Number five, leverage local media.

Local newspapers, radio stations, community Facebook pages. They're always looking for content and they actually have engaged audiences. In small towns or small regions or, you know, slightly bigger regions, people read the local paper.

I know, crazy, right? I read the local paper. And they also listen to radio because it's relevant to their daily lives.

So pitch story ideas that aren't just about your business.

You know, for example, local business owner teaches financial literacy at high school. I mean, that's really cool, right? It's much more interesting than local accountant opens a new office.

So you can definitely pitch different ideas. Build relationships with local media people. In, like, in your area in a small town, the newspaper editor probably lives like three streets over from you. So definitely build relationships.

Now, just because you're in a small town doesn't mean that you should ignore online marketing entirely.

But your approach needs to be different.

Firstly, local SEO is everything.

Focus heavily on Google, my business and local search terms. When someone searches, you know, plumber near me or best coffee in Broken Hill, you want to show up, collect genuine local reviews, and respond to all of them. You really need to look at that because in a small community, how you handle online reviews really reflects how you handle complaints in general.

So whether it's a good review or a bad review, respond to all of them.

The next one is use social media to show local personality.

Your social media should feel local.

Share photos from community events.

Celebrate local achievements.

Highlight other local Businesses show that you are genuinely part of the community and not just extracting money from it.

Facebook is actually often more effective than Instagram in small towns because the demographic tends to be older and more engaged on Facebook.

Plus, communities tend to gather on Facebook. Like that's where why there are Facebook groups and the like.

The next one is consider expanding beyond your town online.

And here's where small business can get really smart.

Use your local credibility to build an online business that serves a much bigger market.

The small town baker can start shipping signature products nationwide.

A personal trainer can create online courses.

A business consultant can offer virtual services to other small towns.

Your local success becomes proof of concept for a broader audience.

It is very different to go broader, especially with online courses and like, you know, selling outside of your local area.

But use it as a base and then you can expand.

Now here's some of the challenges that nobody talks about.

Let's be real about the downsides because they are significant.

Firstly, the fishbowl effect.

Everyone watches everything you do.

Your business decisions, your family life, your political opinions. It all becomes public property.

You need really thick skin and you need clear boundaries. Like I have lived it, then I stepped away from it and I am kind of living it again. Not on the same scale as, you know, where I was born. But yeah, everyone watches everything you do.

Secondly, limited talent pool. Finding good employees is quite hard and you might need to train people from scratch or you might need to offer above market wages to attract talent from big areas.

Another one is economic dependence. If the major employer in town shuts down or, you know, drought hits flooding, Covid whatever, your business feels it immediately.

And diversification isn't just smart, it's survival. And we store this during COVID kind of everywhere in a way.

Economic dependence. We've seen it in a lot of places where major employers shut down and the whole town kind of is, it's, you know, not left to die, but kind of.

Another one is growth limitations.

There's a ceiling on how big your local business can get. If you want significant growth, you need to look beyond your town boundaries.

And then another one is personal versus professional boundaries.

It's hard to switch off when your customers are kind of also your neighbours.

You might get business calls during family dinners and, you know, requests for freebies because, you know, we're mates.

So you really need to think about your boundaries in terms of your professional boundaries and your personal boundaries.

All right,

when should you expand beyond your town?

At some point, most successful small town businesses need to deal with this question. Do we stay local or are we going to expand?

And here are some signs that it might be time to look beyond your town boundaries.

Firstly, you're consistently turning away work because you're at capacity and there's no room to grow locally.

Or you're getting inquiries from other towns or regions, which is really good, right?

Maybe your expertise has developed to the point where you could serve a much broader market.

And maybe you're feeling creatively or professionally stifled by the limited local market.

You know, just think about these things. Is it time to look beyond? But remember, expansion doesn't have to mean abandoning your small town base.

Many businesses actually use their local success as a foundation for broader growth, while they also maintain their community roots.

Here's what I've observed from successful small town businesses.

Firstly, they embrace being local.

Instead of trying to look like big city competitors, they use their local knowledge and their relationships as a competitive advantage.

Also, they focus on being remarkable rather than just, you know, competent. In a small market, you can't hide you really just like you're not anonymous. Everyone knows you.

You need to be genuinely good at what you do.

Also, they think like community members first and business owners second.

They contribute to the community's well being and they don't just like, you know, they don't just take from it.

So be a community member first.

I've also seen that they're patient with growth but impatient with quality. They really understand that building a sustainable small town business takes time.

But. But they never compromise on giving excellent service because you know, again, news travels fast. If you do a really not so good job, people will know and they really just, they stay connected to the broader world, but they're rooted like locally.

A lot of them, I see that they keep learning, they stay current with industry trends. Like they bring a lot of fresh ideas to the community, but they are still rooted in community.

So it's amazing.

All right, that was it. The truth about growing a business in a small town. It's different from big city business in almost every way.

But different doesn't mean harder or doesn't mean less profitable. It just means that you need different strategies.

If you're in a small town, stop trying to copy marketing strategies designed for businesses with millions of potential customers.

Instead, lean into the advantages you have, which are genuine relationships, less competition, supercharged word of mouth and the ability to really truly know your customers.

All right, here's your action step for this week. If you're in a small town, audit your current marketing approach.

You can ask yourself, am I trying to be everything to everyone, or am I positioning myself as the expert local?

And this is, you know, really for service based businesses more than product based businesses.

Also, think about am I showing up in my community beyond just trying to sell things?

That's a really important one.

Am I leveraging the relationships and the local knowledge I have? Or am I ignoring these advantages? Because that's another one.

And think about what partnerships with other local businesses could you explore?

Pick one area to focus on this month and commit to it properly. And if you're in a small town and feeling isolated in your business journey, I'd love to connect with you.

Send me a message. Let me know what town you're in and what challenges you're facing.

Sometimes it's just, you know, knowing that other people are making it work in similar circumstances can be really encouraging. So I'm here for you. Thank you so much for tuning in to the new School of Marketing podcast.

Remember, your location doesn't actually limit your potential. It just changes your Strategy. I'm Bianca McKenzie and I'll catch you next week where we'll talk about the most common marketing mistakes I see and how to avoid them.

Until then, keep making marketing work for you wherever you are.