by Terry L. Besser
Assistant professor and extension sociolgist
Iowa State University Extension to Communities
In 1994, Iowa State University's Department of Sociology surveyed 1,008 business owners and managers in 30 small Iowa towns with a population of 500 to 10,000 people. Based on the findings of that study, a job description for a small town business owner or manager might look like this.
Job Description:
Own or manage your own business.
Enjoy the challenge of being your own boss. Feel a sense of pride.
Make money.
Contribute to your community.
Make work more compatible with family.
Growth Potential
Fifty-three percent of Iowa small town business operators plan to expand in the near future. Six out of 10 participated in training at least once within the last three years. Seventy-seven percent of business operators report that their business is a success according to their own criterion.
The Top 10 Kinds of Businesses
The average town in Iowa with a population of 500 to 10,000 people has 123 businesses. The 10 most common kinds are, in order of frequency: miscellaneous retail, auto-related, finance (such as insurance businesses, banks, tax preparation businesses), medical firms (for profit hospitals, clinics, dentists, physicians, nursing homes and so on), and contractors. Restaurants, beauty and barber shops and agriculture-related businesses are tied for the next spot, followed by wholesalers and then grocery/convenience stores. Manufacturers did not make the top 10, but were very close.
Requirements
Must be willing to work hard. Work hours are flexible, but many. Business owners and managers average 52 hours per week. A few never go home, clocking in more than 100 hours per week. About one out of six work less than 40 hours per week. Family members may be willing to work in the business, which is not required but often desirable. Forty percent of business operators employ at least one family member in their business. In 70 percent of small town businesses, family members contribute an average of 25 hours per month of unpaid work.
Although these are not requirements per se, the typical owner has the following background.
* 72 percent are men
* 49 years old
* Some post high school education
* 20 years of related experience
Challenges
1. Government regulation
2. Quality of labor force
3. Federal/state taxes
4. Demand for product
5. Availability of labor
6. Labor costs
7. Cost of raw material
Sixty percent of the operators indicated that government regulation was a moderate or severe threat to their business success. The other areas were viewed as a moderate or severe threat by less than half of the respondents, with 48 percent reporting that the quality of the labor force was a threat to 36 percent who believe that the cost of raw materials is threatening. Other potential problem areas are suppliers, competitors, cost of capital, trouble collecting debts, local taxes, access to capital, cost of rent and crime. These were seen as threatening by fewer than one out of three operators.
If you are interested in the challenge, flexibility and future growth potential of business ownership in a small town, and are prepared to invest you and your family's time, energy and financial resources, see your community development association, chamber of commerce or bank official. For more information on the ISU study mentioned above, contact Terry Besser at (515) 294-6508.
Contacts:
Terry L. Besser, ISU
Extension Sociology, (515) 294-6508
Del Marks, ISU Extension
Communication Systems, (515) 294-9807
