Small Business Ideas for Rural Areas: Opportunities You Didn’t Know You Already Had

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When most people think of rural areas they think of the back of beyond. They think of small, isolated communities devoid of commercial activities. But there are hundreds of commercial opportunities in rural areas. All you need is a good village business idea.

If you are living in a rural area then the possibilities are really exciting. With less competition around you can have a business that is much more competitive. However, the market opportunities are often different.

Differences In Opportunities

Rural areas often face unique problems. They also have unique opportunities to solve these problems.

When we think of starting a business, we often think of business ideas that require impeccable technological infrastructure, which is not as easily accessible in rural areas.

With that said, there are business opportunities arising from the unique characteristics of rural areas that would not even be viable in a modern city! That is what we are going to look at in this article.

An Overview of the Indian Rural Market

Before we get into the details, let’s take a look at the village market in India.

Market size

India is a huge country with 1.3 billion people and growing and an economy that has been on fire for many years now.

You would expect that only a small number of these 1.3 billion people live in rural areas. However, that is untrue.

According to a report in 2020, more than 65% of the population in India live in villages!

Initiatives Taken by the Indian Government to Promote Village Businesses

The Indian government is a big supporter of village businesses. That comes as no surprise since village-level entrepreneurs have been responsible for many innovations that have made it to the mainstream industry.

Creating opportunities for entrepreneurship in rural areas has been one of the top priorities of the Indian Government. Here are a few MSME schemes launched by the Government of India:

  • Scheme of Fund for Regeneration of Traditional Industries (SFURTI)
  • A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE)
  • Credit Linked Capital Subsidy Scheme (CLCSS)
  • Prime Minister’s Employment Generation Programme (PMEGP)
  • Credit Guarantee Scheme for Micro and Small Enterprises (CGTMSE)

Government Bodies Aiding Small Businesses in India

When you are setting up a small business, you need as much assistance from the government as possible to help you with compliance, paperwork, and more.

The five statutory government bodies that are here to help bring your rural business idea to fruition are:

  • Khadi and Village Industries Commission (KVIC)
  • Coir Board
  • National Sports Club of India (NSCI)
  • National Institute for Micro, Small and Medium Enterprises (NI-MSME)
  • Mahatma Gandhi Institute for Rural Industrialization (MGIRI)

Top 6 Small Business Ideas for Rural Areas

Here are ten well-thought village business ideas for you to consider if you are planning to pursue entrepreneurship in your village.

1. Retail Businesses

Retail businesses can be very profitable in rural areas. This is especially true if you have a village that has a lot of tourists passing through it or a village that serves as a village hub for the surrounding villages.

A village general store, kiosk, or stand can be very successful because people always need food and supplies. Another reason why opening up a ‘kirana’ store is a good idea is because the stores in rural areas are very distant from each other. As a result, you would have less competition locally.

2. Organic Farming Business

Organic farming has become very popular all over the world. As the dependency on processed food is increasing, so are health problems. Some studies show a direct correlation between obesity and processed and ultra-processed foods.

Therefore, more people, particularly in the urban areas, are willing to shift to a diet primarily consisting of produce free from antibiotics, pesticides, etc. Hence, selling organic produce is a great village business idea that will give you some healthy returns.

You can also diversify into value-added products like organic jams, chutneys, pickles, etc.

3. Manufacturing Unit

If you have some access to raw materials, then starting a small village manufacturing unit can be very profitable. That is because, in urban areas, getting your hands on raw materials like wood, minerals or metals is impractical.

Furthermore, manufacturing units require larger land areas and also tend to produce noise and other byproducts that are not permissible in densely populated areas.

So, if you have the capital to start a manufacturing unit, especially one that is sustainable and does not adversely impact the environment, you could be well ahead of many competitors!

4. Poultry Farming Business

Poultry farming can be a village business idea that is profitable if done right.

As you might already know, people in urban areas or developing towns often cannot rear healthy poultry as it requires conditions and resources that are mostly available in villages.

The primary reason why the market would welcome this village business idea is the excellent taste of fresh eggs and chickens, not to mention their health benefits.

5. Dairy Business

This village business idea also has the potential to be really profitable. The market for good quality dairy products is very large and unfulfilled across India.

Bovine dairies are extremely popular in rural areas where the cattle population is quite high. This village business idea would not only give you profits but also help you tackle some of the village-level problems by keeping the village economy going.

You can also expand into value-added products like butter, cheese, etc.

6. Poultry Feed Business

This is one of those village business ideas you might not have thought of before. As more and more urban poultry farms are coming up, village farmers and entrepreneurs can capitalize on the huge demand for quality poultry feed in urban areas.

The village bird feed business would also create village jobs, provide village farmers with extra income and solve a lot of problems by keeping your village economy going.

What Are Some Major Challenges of Rural Entrepreneurship?

Starting a village business has its own set of challenges. They are manifold.

Some village entrepreneurs make the mistake of not planning out their village businesses properly before starting them, leading to losses and frustration. This is one major challenge that you need to overcome if you want your village business to be successful.

Other common problems include lack of access to finance, lack of village-specific market information, poor village infrastructure (especially roads), and the dearth of village partners like suppliers or buyers.

But with enough grit, determination and smart work, any village commoner can overcome these challenges. Next, let’s look at a few examples where the everyday Joes from rural villages were able to build thriving businesses.

Some Examples of Rural Entrepreneurship

Pearl Farming

If you think village businesses can help you make only meager profits, just enough for you and your family to survive, then think again!

This 65-year-old farmer named K J Mathachan from Kasargod, a village in Kerala, decided to stray from his profession as a professor and farm pearls in his backyard. That’ right – pearls!

And his profit margin? A whopping 200%!

He farms pearls and exports them to countries in the Gulf.

You too can start something like this. If not gulf, there are brands and businesses, like Pure Pearls, even in Indian cities that would buy pearls from you.

Exotic Fruit Farming

A village business idea does not necessarily have to always stray away from farming. Jestin Joseph from Vizag, Andhra Pradesh is a testament to this!

Jestin, a sports teacher and trainer, chose to pursue farming Dragonfruit back in 2017. While he incurred losses amounting to lakhs in the first year, he stayed put to solve his business challenges.

Later, Jestin went on to expand his business to other exotic fruits like Strawberries and Blackberries.

Today, Justin earns several lakhs year on year from his farming business and aims to expand it further and train the local tribals for social development.


Starting a village business is the most obvious way you can improve your village economy. It provides village jobs, keeps village income flowing (and not leaving the village), and can even help you tackle village problems.

With the budget allocation for MSMEs doubling in FY22 from the previous financial year, you can take solace in the fact that even the government has your back!

So, do you have a village business idea in mind?

This post is also available in: English Hindi Tamil


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