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10 Top Business Ideas In A Small Town

Here are the list of 10 popular business ideas that you can start in a small town. If you are a budding entrepreneur looking for new ideas, this list is all you need.

Before starting any business – whether in cities or small towns – it is important to conduct proper market research and have the target audience in mind. Once you have done that, you can easily start a business in a small town with these ideas.

Coaching Institute

In most tier 2 and tier 3 towns in India, the level of education is poor. There are almost no private coaching centres to tutor the students if they want additional help in their studies. Hence, opening a coaching institute in a small town makes perfect sense. Opening a coaching institute does not need much investment. All you need is the dedication to teach more students well.

You have to make sure that the students get the level of education that they get in urban areas. The teachers must be willing to go above and beyond their duties to provide the students with the best coaching. The fees must be affordable. With good marketing, you can gain traction in the market within a short time.

Poultry Farm

Starting a poultry farm requires surprisingly little capital and land. All you have to do is to raise poultry chicken for meat and eggs. Then you can sell them directly to the market or wholesalers.

You must have the know-how to raise healthy chickens. You must also contact the local vet to get advice about proper nutrition and medicines for the chickens. This business is quite lucrative. However, you will get good returns only after a few months. Hence, you must start this business on a contractual basis and then move on to full-time.

Boutique/Clothing store

People in small towns don’t have proper access to customised clothes as such clothes are available only in the bigger cities and at unaffordable prices.

If you want to start a new business in a small town, opening a boutique or clothing store might be a good idea. You can bring the latest fashion to the people at affordable prices. This business idea is sure to be a hit among the younger generation. You will need to get the cloth from suppliers who can deliver clothing on a commission basis.

Farming Equipment Or Farming Products Store

Since most of the villages are primarily involved in agricultural activities, a start-up related to agriculture is a great business idea. There are various organic and inorganic farming products and equipment you can manufacture or distribute in small towns.

You can deal in seeds, fertilisers, pesticides, water sprinklers, etc. If you have a bigger budget, you could even establish a tractor shop. Many farmers have livestock. You could provide food for them. You can hold monthly meetings to show farmers how to use a particular product correctly. This is a good way to market your products and establish your expertise among them. Farmers are usually a tight-knit community, and once you have made a good name for yourself, your business will grow.

Mobile store

Almost everyone has a mobile phone in India. However, the latest phone models are available only in cities, while people in small towns have to come to nearby towns to purchase the latest model phones.

A mobile store in a small town will bring lots of people looking for a good mobile device at affordable prices. You could also hold discussions and teach people how to use a smartphone correctly. As most of the country is now covered under various telecom service providers, a mobile store will flourish well in a small town.

Diagnostic centre

People in smaller towns and villages do not have access to world-class healthcare. They often do not even have basic healthcare facilities such as diagnostic centres. Though there are government dispensaries in most places, they offer only a basic level of care. Even for a simple blood test, they have to travel a long distance to the nearby city or bigger town.

You can consider opening a state-of-the-art diagnostic centre in a small town. You need to have the expertise and equipment required to run tests. A diagnostic centre also needs a fair bit of capital as some diagnostic equipment is costly. However, you will start earning profits almost immediately.

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Agarbatti Making

Agarbatti or incense sticks are widely used across India. Making incense sticks is quite easy. Many ladies across India are engaged in making agarbattis for bigger companies right from their homes.

This business requires very little capital and space. You can also work on less manpower. Making agarbattis is one of the most lucrative businesses in India, where you can earn huge profits.


One of the major issues that people living in small towns face is transportation. Transportation services in India are patchy at best and even worse in rural areas. There are instances of people having to wait in the sun or rain for hours to get a bus. Many private operators do not provide transportation to rural areas as well.

You can set up a transportation service in a small town. You can use this to transport people, goods, farming supplies or products, and even livestock. For this business, all you need to do is to purchase a tempo or truck with all the valid permits and set up a small office. It needs minimum investment and gives high profits.


Many farmers sell their produce to wholesalers and distributors, who usually take a large portion of the profits and give very less money to the farmers. When there is some natural calamity such as drought or floods, the farmers are not able to salvage their produce which causes heavy losses for them.

You can establish yourself as an honest middleman who gives the farmers their due. Once you gain their trust, more farmers will sell their products through you. This is beneficial for both parties. You can start this business with almost no investment.

Livestock farm

If you are interested in livestock and know about animals, you can consider starting a livestock farm in a small town. You can rear goats, pigs, horses, bulls, and cows on your farm. This business is for people with relatively higher capital and are ready to spend on livestock and land.

Like poultry farming, you will reap profits only after a while from this business. Meanwhile, you have to work hard at keeping the animals healthy. You can sell milk from cows and meat from goats and pigs. You can also rent out horses and bulls for farming activities.

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In India, small towns are generally known for their agricultural sector. However, in recent years, tier 2 and tier 3 towns are becoming popular with entrepreneurs looking to start new businesses.

The reason for such popularity is that smaller towns have lesser legal regulations and also require much lesser capital than urban areas. The people living in smaller towns generally are connected in some way to the agricultural sector. Starting a business in a small town allows them to participate in a business that is not dependent on nature. This makes them financially independent even when there is nothing to be done on agricultural land or related businesses.

Businesses in small towns have the scope for great growth as they face lesser competition than the ones in urban areas. As the capital required is lesser, the profits gained by these businesses are also higher. The agricultural sector in India is one of the main sectors contributing to the development of the country. Opening a business in a small town directly or indirectly contributes to the country’s advancement in the global market.

The most important thing you should remember while starting a business in a small town is that you will have to be hands-on in the business you choose. The more involved you are in your business, the more goodwill and trust you will earn. In small towns, goodwill and trust are more useful in building a business than aggressive marketing.

Though starting a business in a small town has lesser hassles, you need to complete all the formalities to avoid future problems. You must also be prepared to spend some time with the locals to know what their requirements are. With proper market research, you can make your business a success in a small town.

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