Best Small Business Ideas for Rural Areas, Villages, Small Towns in India
Aatmanirbhar Bharat, the idea propagated and supported by Government is all about becoming technically and financially self-reliant. It encourages the new-age entrepreneurs to take a risk and become assertive in their approach to break the glass ceiling. The government’s initiative is not exclusive to big-city entrepreneurs but has universal appeal and is also meant for small-town/village-level entrepreneurs.
With more than 70% of the population residing in villages and small towns, the opportunities to start new businesses is more in these areas. As most of the businesses in the rural hinterland is directly or indirectly dependent on agriculture or a related sector, there is a number of opportunities available to explore and flourish with time. Some of the business ideas that can be explored in the small towns are discussed below for entrepreneurs to take a call.
Some of the business ideas for new-age entrepreneurs in small towns/villages are:
With the majority of the population residing in rural India, there is a shortage of well planned retail outlets in these marked areas. The outlets can be of different types that cater to a different section of the population. One such option that is very easy and practical is opening a Kirana store.
The Covid crisis has proved the resilience of the Kirana shop owners and the adaptability to learn and change according to the new scenario. It is a very feasible option and is never out of demand provided the Kirana store is opened at the right place, has good customer service and is well stocked (supply chain). The other shops that can be opened in the rural hinterland are:
- Sweet shops
- Tailor shop
- Electronics shop
- Saloon shop
- Cosmetics shop
- Two-wheeler/four wheeler mechanic
- Fruit shop/juice shop
- TV/Radio/Mobile mechanic
- Electrical/plumber shop
Before opening the above-mentioned shops, it is necessary to have a certain level of expertise. It is necessary to have some skills and knowledge to open the shop. However, one benefit of opening a retail outlet is, it requires less amount of time to start the business and there is ready, made demand for such essentials at every place.
Another idea that can be worth exploring is the establishment of a flour mill. In rural areas there is no paucity of raw material(cereal) for the flour mills, moreover, people don’t purchase the packed flour from the markets as visible in urban areas. It is a very feasible and profitable business if you grind other grains along with wheat like corn, oats, barley, sorghum, and spices like turmeric, chilli, etc.
The flour mill can also supply the products to nearby cities and towns at profits. It is a good business and requires limited money but a good electrical connection to start and run the business.
Small-scale manufacturing units
Rural areas and small-town are ideal locations to start small scale manufacturing units to cater to the demand in the local area as well as supplying products to nearby towns and cities. These manufacturing units can be for various products like:
- Candle/ matchbox
- Paper cup/paper plate
- Packaging products
- Disposable bags, etc.
These products have a large market in urban areas, whereas the raw material is in abundance in rural areas to become a profitable business with quick returns.
Travelling to big cities for buying clothes on special occasions or for daily needs is very common in villages. Starting a clothing store with good brands, fabrics, and variety is a sure shot way to success provided the owner has good contacts from the garment suppliers and the supply chain is intact.
If you can provide the latest fashions, design, and style of clothes, there will be a good demand for the products in the villages and small towns. You can also arrange tailoring services and provide hand made products for the clients at the store.
Poultry farming business is growing at a rapid pace with active support from the government agencies. Moreover, it is not capital intensive and does not require much land. However, a person must have some experience to run the business. There is a huge demand for poultry products in rural and urban areas that help in reducing the return on investment. Initially, you can start with a limited number of birds and also the quality and variety of birds, and with time can increase the business. Along with the local demand, you can advertise and sell the meat/eggs in cities.
As the rural economy is largely based on agriculture, it makes perfect economic sense to start a fertilizer/pesticide business. It is necessary to apply for a license before starting the business. Moreover, you can also keep seed along with fertilizer and pesticides.
Shortage of well-qualified teachers in rural areas is a big problem and can be a good business idea to start a tutoring centre with eligible teachers employed at the centre. It will not only provide employment to qualified local youths but will help people to find a good teaching institute closer to their homes for children. The business doesn’t require much capital and space, and, is a good business opportunity to explore, provided you have the qualification and necessary skills to run a centre. The tutoring service can start with limited manpower but will grow with time.
Due to the abundance of milk in rural areas, running a milk centre is a sound business idea. It can collect milk from individual houses and supply it to dairy farms. The fund requirement to start the centre is less, however, the person must be qualified to run the centre. Collection and supply of milk are possible only by tying up with a dairy farm. To start a local dairy project, one needs funds that can be availed from different financial institutions including banks, and NBFCs like Lendingkart.
Organic fruits and vegetable market is growing rapidly and living near to villages and the small town presents a sound business opportunity to start growing and marketing the produce. However, it is not easy to start the business and requires a farmland or contract with farmers to grow the produce. Moreover, these are perishable goods and requires refrigeration for storage. It is advisable to start the business closer to vendors for less transportation and logistic charges.
Small business loan
A small business loan is a customized loan to meet the financial requirements of a small/medium size enterprise. It is collateral in nature and is offered by all financial institutions to eligible borrowers.
Benefits of small business loan:
Some of the benefits of the small business loan are:
- There is the flexibility to select from different loan schemes. Government scheme such as CGTMSE even doesn’t need collateral or third-party guarantee.
- There is flexibility in the repayment tenure and depending upon the convenience, one can select the EMI option.
- The rate of interest in government-backed schemes is low.
- It is easy to avail of the loans and the loan amount disbursement is quick.
Eligibility criteria of a small business loan
The eligibility criteria to get a small business loan is:
- Age: Minimum – 21 yrs, Maximum – 70 yrs
- Nationality: Indian nationals
- No case of default with any financial institutions
- Bank statements of last 12 months
- Income tax returns for last two years
Documents required to avail a small business loan:
- Dully filled loan application form with KYC documents
- Complete business plan
- Identity proof: PAN card, Aadhar card, Voter ID, Driving license
- Residence proof: Utility bills, PAN card, Ration card
- Business registration documents
- Income tax returns of last two years
- All kinds of license and required permits
Procedure to apply for a small business loan
The procedure to apply for a business loan is very simple and is defined below:
1: Check the eligibility criteria before applying for the small business loan.
2: Fill in the application form and submit it with all the required documents mentioned above.
3: Once the documents are verified after you submit it, the loan is sanctioned and funds transferred to the borrower’s account.
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