small town business ideas

Best 60 Profitable Business Ideas for Small Towns in 2023

Do you live in a small town, a village, or in a rural area and want to start a business? Here in this article, we have compiled the most profitable and unique small-town business ideas for small cities, villages, and rural areas.

Small towns or Tier 2 and Tier 3 cities are coming out to be emerging markets all across the globe. Small towns are potentially the biggest market for consumer goods and as well as eCommerce companies. Find below the selected list of businesses you can start with a low investment for people staying in small towns.

60 Small-Town Business Ideas

#1. Acrylic Buttons Manufacturing 

The demand for acrylic buttons is increasing due to an increase in the consumption of garments used for domestic use and for exports. The consumption of both these sectors has registered significant growth in the past and it will continue to show good growth in future years.

#2. Agarbatti Making

Any individual can start an Agarbatti-making business on a small scale. Agarbatti is considered a household good having great market potential. The burning of Agarbatti or incense in religious and social functions has been practiced traditionally for a long time. People nowadays also use it for a better aromatic experience at home.

#3. Air Bubble Packaging Wrapper

Air bubble packaging wrapper is an essential item in the packaging field as a convenient and economical cushioning material. The demand generation of electronic goods and other fragile items in recent years has left a wide gap to fulfill the packaging need using air bubble film which has generated a good potential for the project for new entrepreneurs.

#4. Aluminum Door Window Manufacturing

The aluminum door window manufacturing business is one of the profitable small business manufacturing opportunities in the light engineering industry sector. You can start this business with small startup capital.

#5. Aluminum Foil

Aluminum foil is used in different industries in different forms. It is used in pharmaceutical tablets, bulk & unitized packing of tea and coffee, prepared meals, bakery products, frozen meat, fish, milk bottle caps, wine, lube oil, greases, powdered milk, confectionery, biscuits, photographic film, gift wraps, household wraps, butter, margarine, and cigarettes.

If you have space, it can be a profitable manufacturing business in small towns.

#6. ATM Space Renting

The demand for ATM space is high. The banks usually rent the space for a certain amount of years and the contract is renewed every two or three years. If you are looking forward to a fixed monthly income, ATM space renting is a good retail business proposition for you.

#7. Bakery

The bakery is one of the most profitable small-town business ideas. One can initiate this business by having owned or rented space. Selecting the right product and proper marketing strategy are the major deciding factor in getting success in the bakery business. According to the demand and financial aspects you will need to choose the specific products for your bakery business.

#8. Banana Wafer Making

Banana wafers are under-ripe bananas that are cut into slices dipped in syrup solution, dried under the sun or in the oven, fried, and eaten as snack food or dessert. Additionally, you can sell the item both in the local and export markets. You can initiate this business on a small-scale basis.

#9. Bedsheet With Pillow Cover

This is a very good consumer product and one of the best business ideas for small towns. You can start the business with a small capital investment. Knowledge of the textile industry is important. Small, medium and large-scale operation is possible.

#10. Bio-diesel Production

Bio-diesel production units can be established in small towns and villages where the main raw material Jatropha oil is easily available. There is a continuous search for renewable sources of fuels due to the rate of depletion of fossils.

The term biofuel is used to define fuels that are obtainable from plants or animals. Being a renewable source, it is gaining attention all over the world today.

#11. Bridal Store

A bridal store focused on specialty wedding attire with allied wedding supplies products is a profitable retail venture in the clothing and fashion industry. Even in a poor economy, brides-to-be and their wedding parties spend a lot of money on bridal attire and wedding accessories because weddings are memorable once-in-a-lifetime events.

#12. Candle Making

Aromatic decorative candles have a big market. It is used as a gift item also. Candle-making business can be initiated on a small scale. Women especially can try this business.

#13. Canned Rasgulla Making

Any individual can start a canned Rasgulla-making business with moderate capital investment. Additionally, revenue-wise the business is lucrative and highly profitable. However, you must ensure a regular supply of fresh milk to your factory.

#14.  Cashew Processing

In cashew processing, the manufacturing activity includes cell cooking, cutting, cashew kernel drying, peeling, grading, and packing. Additionally, you can initiate cashew nut processing as an export-oriented plant too.

#15. Coconut Based Business

Coconut production plays an important role in the coastal economy. If you stay in a place where coconut is grown in plenty, think of starting a coconut-related business.

#16. Costume Jewelry

This is a multi-million dollar industry now. It attracts women of all ages. The major reasons for its popularity are the low price with the highly attractive look. You can start costume jewelry selling from home.

You can sell from your own online store. With the innovation of technology, it is easy now. One of the best business ideas for small towns for housewives and women.

#17. Designer Lace Making

With knowledge about lace knitting, any individual can initiate this business from a home location with small startup capital. Nowadays you will find different lace-making machines.

The commercial lace-making unit is possible by establishing these machines. Designer lace has a very good market demand and is an essential item in designer clothing materials.

#18. Detergent Powder Manufacturing

Detergent and washing powder are surfactants. And washing powder is an important ingredient for cleaning and washing purpose. Generally, there two different types of manufacturing technologies are available. One is spray dried and another is mixing the raw materials.

#19. Egg Tray

Egg trays are made from scrap paper pulp. The manufacturing process is simple. However, you need at least an area of 400 Sq Ft to run a small-scale egg tray manufacturing unit. This profitable small-town business can be started with low investment.

#20. Exercise Book Making

The exercise book manufacturing process is simple and any individual can initiate this business in a small town or a village with comparatively low startup capital.

The demand for exercise books as office and school stationery items is increasing. According to the demand, several different types of machinery are also available.

#21. Flex Printing

Nowadays, flex is an essential item for outdoor advertising. If you are passionate about starting a small business in the printing industry, you can consider this business. You can start a flex and banner printing business in small towns with little investment.

#22. Ginger Garlic Paste Making

Ginger and Garlic Paste is mainly used as a condiment in various food preparation and also serves as a carminative and gastric stimulant in many medicinal preparations.

As instant mixes and spices are becoming more popular, the demand for ginger garlic paste is also increasing. The Production process is simple. The product has an immense market opportunity for export also. This small-town business can be easily started in rural areas too.

#23. Grape Wine Production

Of course, grape wine production is a highly capital-intensive business. However, the business is lucrative too. Any individual can start this business with substantial capital investment. You must have a proper business plan or project report in hand prior to starting this business.

#24. Hair Band Making

Hairband making business is a lucrative and profitable manufacturing idea and is among the most popular small-town business ideas. It can be initiated on a medium-scale or small-scale basis.

A Hairband is considered a hair accessory and is used by girls and boys. With the up-gradation and change in fashion trends, different types of fashionable colorful hairbands are now very popular.

#25. Ice Cream Store Business

The ice cream store business with allied products is potentially a profitable retail venture. Selecting the right location with the right product mix is crucial in this business. This is one of the best retail business ideas for small towns.

#26. Iodized Salt Production

Iodized salt is a white crystalline powder salt fortified by Iodine. People can easily avoid iodine deficiency disorder by consuming a sufficient amount of salt fortified with Iodine. Iodized Salt consumption is directly related to population growth.

#27. Jam Jelly Making

Any individual can initiate a jam jelly-making business from home. As your business grows, there are scopes to add similar product lines and shift your project to a convenient premise. jam jelly-making business requires normal machinery and utensils. These are consumable food items and have very good market demand.

#28. Jute Bag Making

Jute is a biodegradable eco-friendly item. Designer jute bad has very good market demand and export potential also. By having simple machinery, you can initiate a jute bag-making unit at your home location also. For an eco-friendly character, the demand for jute yarn, jute fabrics, and other jute items is increasing very fast.

#29. Kids Garment Manufacturing

The infant garment or kid’s garment industry is growing very fast across the globe. You can consider initiating an infant garment manufacturing business of your own. In addition, this business also has very good export potential. In that case, you can also consider starting an export-oriented infant garment manufacturing company.

#30. Leather Belt Making

The leather waist belt is an item of dress used by young to old everyone. It has a functional value besides being a fashion item. The demand for leather belts is increasing in domestic as well as export markets. It is popular among school-going children and youths wearing western dress. It is also popular among other age groups of men.

#31. Lemonade Making

Lemonade is actually a lemon-flavored very popular soft drink. The principal raw materials required are sugar, citric acid, flavor & essence, food color, and sodium benzoate. However, lemonade-making is a capital and management-intensive business. One of the best summer season business ideas for small towns.

#32. Milling Business

Generally, milling business opportunities involve wide manufacturing operations. According to the product and raw material, you can initiate different types of milling businesses as small and medium-scale industries.

#33. Nail Polish Manufacturing

Nowadays, nail polish is a very common beauty and cosmetic item. The cost involving starting a nail polish unit is also not much. However, the market is competitive and many reputed brands operate in the market. Almost every age group of women uses this item regularly.

#34. Nut Bolt Making

Basically, the nuts and bolts-making business come under light engineering product manufacturing. Nuts and bolts are a type of industrial fasteners used in various products, machines, structures, etc. Nuts and bolts consist of a major link in the family of industrial fasteners and are used by every industry.

#35. Online Perfume Store

To start your own online perfume store business you will definitely need to have an eCommerce site. The demand for perfume in the online market is on the increase.

#36. Online Toy Library

Toys are the most popular item for kids. Children enjoy playing with toys. In addition, they learn several things in their childhood days with the help of different activities and educational toys.

However, a single piece of the toy is not sufficient to engage a child for a long period of time. In fact, children want to have a new toy almost every alternate day.

#37. Online T-shirt Store

The t-shirt is well-known casual wear worldwide. It is popular among men, women, and kids also. Yes, there are a lot of t-shirt brands on the market. People always look for a beautiful design, a cherishable brand, and a quality product. That’s enough.

In starting an online t-shirt business, you will definitely need to have an eCommerce site where your clients will buy your t-shirts. with Shopify, you can start your own online t-shirt business by creating a fully functioning eCommerce store with very little capital.

#38. Packaged Drinking Water Production

Increasing awareness of health and the scarcity of getting pure drinking water has made an immense market demand for packaged drinking water. Nowadays people prefer to have packaged drinking water not only outside but also in the house.

In initiating a packaged drinking water business in a small town, it is important to check the PH balance of water where you want to establish the unit.

#39. Papad Making

Any individual can initiate a papad-making business on a small scale. Papad making is one of the most profitable food processing businesses considering the low startup capital investment. Papad is a thin wafer-like product served as fried or roasted.

#40. Paper bag Making

A paper bag or paper sack is a preformed container made of paper. It usually comes with an opening at one end. It can be one layer of paper or multiple layers of paper and other flexible materials.

Paper bags are essential items for packaging and/or carrying items. It’s just the same as packaging design, paper bags are intended to show all the glory of the product inside them. So, your design needs to stand out. This is one of the best business ideas for small towns.

#41. Paper Cup Making

You can start this business with a small investment. The demand for this product is increasing day by day. The Paper cup-making business is one of the most lucrative small-scale manufacturing opportunities for small towns. You can produce the paper cup from recycled paper.

#42. Pet Bottles Production

Pet jar or pet bottle production is one of the most lucrative and profitable manufacturing opportunities in the plastic and polymer industry. A pet bottle production unit with a simple process of injection molding and blow molding is a profitable venture for entrepreneurs.

#43. Shrimp Farming

If you are staying in villages or rural areas, shrimp farming is a profitable business idea. However, you need to go through some training on how to farm shrimp before you start this business.

#44. Plastic Toothpick Production

Another small business idea with low investment and high profit. This is a consumer item. The product has good market potential. You can start production at home too. The manufacturing process is simple. The machine cost is also very less. The raw material is easily available.

#45. Start a Preschool in A Small Town

Preschools generally provide early education and care for children aged between three and six years. However, there are some who may be licensed to take children from two years of age.

#46. PVC Pipe Manufacturing 

The demand for PVC pipes and fittings is related to the consumption of PVC pipes. Due to the growing trends in the utilization of PVC pipes for a variety of applications, the demand for fittings is likely to grow substantially.

#47. Rain Coat Manufacturing 

A wide variety of fabrics suitable for rain gear is currently on the market. The production process is simple. It generally includes designing, cutting, and sewing.

#48. Dropshipping Business

E-commerce has virtually wiped out the region-specific advantages of starting a business. Anyone from a small town can start an online business from anywhere irrespective of his/her location. Dropshipping is one business that can be started from a small town at ease.

#49. Start a Restaurant

The food and beverage industry is one of the fastest-growing industries all around the globe. Additionally, the restaurant business is one of the most profitable and lucrative retail opportunities. One of the best food service business ideas for small towns.

#50. Rubber Floor Mat Making

Rubber floor mats are popular as industrial rubber mats, anti-static mats, anti-vibration mats, anti-fatigue mats, rubber mats for use at home, entrance mats, interior mats, car floor mats, and so on. The manufacturing process is not complex.

#51. Solar Business

The solar business has high potential in the future. Hence, both technology routes for the conversion of solar radiation into heat and electricity, namely, solar thermal and solar photovoltaics, can effectively be harnessed providing huge scalability for solar energy worldwide. This is one of the best business ideas for small towns.

#52. Spectacle Frames

The spectacle frame manufacturing business demands simple machinery and equipment. The major required raw material is cellulose acetate. The most fashionable business ideas for small towns.

#53. Spice Powder Making

Spice grinding and packaging is one of the most profitable food processing businesses. Additionally, you can start the business on a small and medium scale. Spice is an essential item in cooking and food processing. Additionally, it comes as a tastemaker.

Apart from individual spice powders like chilly, cumin, and turmeric; special quality mixed spice powder processing is more profitable. Some of the most popular items are meat masala, curry powder, chat masala, etc.

#54. Tissue Paper Making

Household paper products recently have seen a huge demand. tissue paper, facial tissues, and paper towels can be produced by simple machinery. You can initiate the project by concentrating on one or two allied products.

As your business grows, you can make an addition. Household paper product making is one of the most profitable and trending paper business ideas for small towns nowadays.

#55. Tomato Processing

Tomato is a widely available item and processed tomato products are also very popular. The most popular products are tomato sauce, puree, juice, ketchup, etc. In initiating tomato processing, you can also produce tomato pulp for other small-scale industries. Additionally, the business demands simple machinery and equipment. One of the great business ideas for small towns.

#56. Tracksuit Manufacturing

The tracksuit is a popular item among every age group of people. Additionally, men, women, and kids all use this item as sportswear or as casual wear. The dress is hugely comfortable and functional. The item comes in different colors, sizes, patterns, and designs. Additionally, there are different tracksuits for men and women.

#57. Tire Retreading

Tire retreading is a new technology. After applying this method the old tires become serviceable and usable. The part of the tire that comes in contact with the surface of the road is known as the tread. The tread is an integral part of the tire and is responsible for providing traction. Technology-wise this is one of the most trending business ideas for small towns.

#58. Washing Blue Manufacturing

Washing blue or laundry blue is an essential household item. The manufacturing process is simple. Additionally, any individual can initiate this business with moderate startup capital investment.

#59. Woodworking 

Woodworking business is a very good and profitable small-town business. You will find many technically upgraded machinery for woodworking. However, you must select the right product. Additionally, focusing on the right niche is important in this business.

#60. Yoga Studio

The yoga studio business is an upcoming profitable and lucrative small-town business in the health and wellness industry.

The increasing awareness of consumers from remedial care to a preventive care approach has created an enormous potential for initiating a yoga studio for entrepreneurs. Additionally, this is one of the most lucrative business ideas for small towns.

Frequently Asked Questions on Starting a Business in a Small Town

What businesses do well in small towns?

In the present day, almost all types of businesses make good money in small towns. However, the stand-out categories of business tailor-made for small-town are the following:

  • Small manufacturing business
  • Product distribution business
  • Online business

What is the best business to start in a small village?

Some of the popular and profitable businesses n a small village with low investment are grocery stores, fruit and vegetable shops, farming, and small manufacturing unit.

What is the best business to start in a rural area?

In rural areas, agro-related businesses have a greater chance of success. In addition, there are bright scopes of making money in agriculture equipment selling, fertilizer distribution, small rice mill, and selling seeds to farmers.

Most FMCG companies are now earning a nearly similar proportion of revenues from both urban and rural markets. In the present scenario, small towns are surging ahead as hubs of entrepreneurial activity, giving a good fight to big cities and even metropolises.

While industrial activity declines in big cities, smaller cities and towns are picking up the slack, often displaying a preference for manufacturing at the cost of the services sector.

Relationships and trust are key drivers of awareness and purchase in small cities. It is essential for marketers to actively engage and build relationships.

Success parameters in small businesses hugely depend on location be it in a big city or a small town. The Source of raw materials, available infrastructure, and local markets play an important role. We believe this list of profitable small-town business ideas will definitely help you in making an informed decision in starting your own business venture.