Iowa State University

Terry Besser, Sociology, (515) 294-6508
Brian Meyer, Agriculture Information, (515) 294-0706
Steve Jones, News Service, (515) 294-4778


AMES, Iowa -- Most people who run businesses in Iowa's small towns consider their operations successful and more than half plan to expand, according to an Iowa State University survey.

In the survey of owners or managers of 1,008 businesses in 30 small towns, 77 percent considered their enterprises successful; less than 3 percent said their businesses were unsuccessful; and the rest considered themselves neither successful nor unsuccessful. Fifty-three percent said they planned to expand. Eleven percent said they planned to downsize.

"The survey projects a pretty healthy image of Iowa's small-town businesses," said Terry Besser, an assistant professor of sociology and one of the leaders of the survey. "More often you hear or see how Main Street businesses are struggling."

In many small towns there is a different mix of businesses than in the past, Besser said. "About 15 percent have been open less than five years. More storefronts are filled by antique shops, tearooms and boutiques rather than hardware, clothing or other more traditional businesses. These new owners may have different definitions or expectations for success."

When asked if profit was the most important measure of success, 70 percent of the owners and managers agreed and 30 percent did not. "Factors such as lifestyle and personal satisfaction enter into their consideration of success," Besser said.

For the survey, 30 small towns, with populations from 500 to 10,000, were randomly chosen from a list of 99 from an earlier ISU study of communities. The researchers asked 1,136 business owners and managers to participate in a survey, and 1,008 agreed -- an 89 percent response rate. Phone interviews were conducted in July 1995.

"We hope communities will use the survey results as a diagnostic tool," Besser said. "Maybe it will motivate them to look at what makes small-town businesses successful and the importance of business-community relationships."

The survey asked businesses about threats to their operations. Government regulation was rated as the most serious threat, followed by quality of labor and federal and state taxes. Of the businesses that planned to expand, quality and availability of labor were the biggest threats. Those who said their operations were not successful were more likely than successful businesses to rank access and cost of capital as top threats.

Besser said the survey showed pricing and competition were not overwhelming issues. "We were surprised competitors didn't rank higher as a threat -- it's about in the middle. We also asked about businesses' strategies for success, and offering lower prices ranked last."

What strategies for success do businesses use? "Offering distinctive and quality products and services ranked highest," Besser said. "Owners and managers also ranked community-related strategies, such as improving the community and local cooperation, as important strategies for success.

"Businesses are loyal to their towns. Between 70 and 80 percent said they'd brag about their towns as places to locate a business. Most said they support their community in many ways, from buying supplies locally to donating to school programs."

The survey was part of the ISU College of Agriculture's Rural Development Initiative, a series of research and extension programs addressing community development, economic development and technology issues in rural Iowa.



ISU Extension offices will have survey reports on four population categories. Listed here by population are the 30 communities:

500 - 1,000: Allerton, Clarence, Donnellson, Elma, Farmington, Olin, Pacific Junction, Pomeroy, Ventura.

1,000 - 2,500: Bedford, Calmar, Mapleton, Mediapolis, Pleasantville, Sheffield, Traer, Winfield, Woodward.

2,500 - 5,000: Albia, Eagle Grove, Jefferson, Le Claire, Missouri Valley, Sac City, Sibley, Waukon.

5,000 - 10,000: Cherokee, Denison, Estherville, Webster City.


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