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The challenges of running a business in the countryside

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Starting a business in the country can seem the ultimate dream. But while there are benefits, there are also issues with the services that many living in towns take for granted. David Adams heads out into the Great British countryside

Running a small business from a rural location can offer huge pleasures but also major problems not found in urban areas. The latter include difficulties with recruitment, transport, telecommunications and access to services such as banking. 

Yet there are huge benefits for local communities and the national economy if small businesses can prosper in rural areas, argues FSB Policy Director Martin McTague. “We want a thriving rural economy,” he says.



In 2017 rural businesses in England will benefit from a change for which FSB and its members had campaigned, when rural business rate relief is increased to 100 per cent (see below). FSB is also calling for the establishment of a universal service obligation (USO), to ensure every home and small business in the UK can access an affordable broadband connection of 10Mb per second (Mbps) or above by 2020. 

Today almost half a million (480,000) small businesses cannot access superfast broadband, with 192,000 having download speeds below 10Mbps, according to Ofcom. Among those desperate for a better service is Andy Beresford, Managing Director of Home Leisure Direct. 

The company sells games equipment such as pool tables, table tennis tables and arcade machines from a showroom on an industrial estate in Elberton, a village near Bristol. 

In 2015, he told First Voice he was waiting to find out if BT would extend its fibre network to the village, until which point the company was limited to a connection speed of 0.8Mbps. More than 18 months on, he is still waiting. 

“Elberton has supposedly been approved for the next stage of investment in the broadband infrastructure, but I have no idea if this is definitely happening, or when the work with be completed if it does,” he says.

Mobile broadband services, boosted by exterior antennae, offer only an expensive partial solution. Mr Beresford has resorted to ordering a leased line at a quoted cost of more than £400 per month. But, to his horror, OpenReach says this will require additional engineering works at a cost of £10,000. The business remains in broadband limbo for the time being.

FSB has also highlighted problems with inadequate transport infrastructure, putting forward recommendations for policymakers including more integrated regional transport plans, ringfencing of transport funding in local government budgets, and prioritising improvements to local road networks. 

Bank crisis

Rural areas are also severely affected by the closure of bank branches. The UK has lost about half its bank branches during the past 25 years, and it is thought that about half of those that remain could close during the next 10 years. Problems caused by a growth in the number of ‘bankless towns’ are particularly significant for cash-based businesses.

The closure of two out of three local bank branches is just one of several practical problems that make life a bit more difficult for Emma Woods, owner of Duncombe Sawmill, near the pretty market town of Helmsley on the edge of the North Yorkshire Moors. 

Since buying the sawmill to save it from bankruptcy in 2003, Woods has turned it into a profitable business, employing eight people and serving customers across the UK and beyond. Products include fencing, gates, timber buildings, play equipment and garden furniture. There is a roughly even split between trade and retail business. An online presence – the sawmill has access to superfast broadband – serves customers throughout the UK and overseas. Most of the wood used at the sawmill is sourced within a 20-mile radius.



The challenge of delivering goods to non-local customers is met in part by the presence next door of a haulier business. “But we have to travel a long way to deliver anything, even within our region, so it’s expensive because of the mileage,” she says. “We’re a good hour from the nearest motorway.” 

Ms Woods also expects the cost of timber to rise, as other companies that import timber switch to using British stock. But she says running a business in a strong community, in a beautiful part of the world, has enriched her life. For example, her short daily commute is a huge improvement on journeys to work endured when she lived in London. 

Rural realities

Rural economies in much more remote areas are even more dependent upon small businesses. Cocoa Mountain, a small manufacturer set up by James Findlay and Paul Maden in 2006 near Durness on Scotland’s northern coast – about six hours’ drive from Glasgow or Edinburgh – makes chocolate products and runs a café in the town. The business employs between six and 15 people at different times of the year and has a growing army of devotees, including many online customers. 

It also gained increased exposure when appearing on BBC television’s Dragons’ Den in 2015. The dragons loved the products, but were unwilling to invest in the company for various reasons, including its location. Even so, extra staff had to be recruited to manage a three-month-long boom in demand following the broadcast.

Recruitment is a problem in a sparsely populated area. Many staff are recruited from overseas, usually from Europe. It can be difficult to accommodate them, because so many local properties are rented out as holiday homes. Access to services is also an issue: a mobile branch of RBS, which visits Durness once a week, is the only local banking option.

But neither owner will be moving any time soon. “The business has grown, we’re profitable, we’re expanding our product range and intending to sell globally,” says Mr Findlay. “We want to develop further on this site. 



“And it’s just such a beautiful place. It’s inspiring to look out of the window and have wonderful landscapes and golden beaches on your doorstep.”  


Case sudy: A bug’s life

In 2016 Dr Sarah Beynon, an entomologist who occasionally appears on television programmes talking about insects, launched the Bug Farm, an educational visitor attraction and research centre based on a small farm near St Davids, on the south-western tip of Pembrokeshire and Wales. 

The centre includes a bug zoo and museum, arts-and-crafts workshops and the Grub Kitchen, which claims to be the UK’s first edible insect restaurant – there are non-insect dishes on the menu too – and is run by her partner, Andy Holcroft. 

Dr Beynon says she doesn’t like to complain about running a business in a rural area because it’s the only place she ever has run one, and she’s used to inconveniences such as having to drive for half an hour to reach a bank. 

But there are problems when Dr Beynon and her colleagues need to travel to meetings elsewhere in the UK, which often happens. “The train links and road links aren’t brilliant,” she says. “It means I have to pick and choose which meetings to go to.”

Nor is working life in St Davids as relaxed as some suppose, she says. “People say ‘It must be lovely, with the slow pace of life’ but that’s not the case,” she says. “Yes, we can go down to the beach easily, but for successful rural businesses life is just as hectic as it would be in a city.”



Progress on rural rate relief

This year many small business owners in rural England will benefit as a result of a change in Government policy, following a member-led FSB campaign. Previously, rural businesses had only been able to claim 50 per cent of rural rate relief from the Government, with a postcode lottery determining whether or not further relief was available from local authorities.

In the 2016 Autumn Statement the Chancellor Philip Hammond announced that rural business rate relief in England would increase to 100 per cent for businesses in rural areas in England with a population under 3,000: where the business is the only village shop or Post Office with a rateable value of up to £8,500; or the only pub or petrol station with a rateable value of up to £12,500. 

Elsewhere, Scotland has the most generous rural rates relief system. The Small Business Bonus Scheme offers 100 per cent relief on business rates for properties with a rateable value up to £10,000; 50 per cent for rateable values between £10,001 and £12,000; and 25 per cent between £12,001 and £18,000. In 2017-18, 100 per cent relief will be available for rateable values up to £15,000; and 50 per cent between £15,001 and £18,000. 

In Wales, a less generous Small Business Rates Relief scheme offers 100 per cent relief only for rateable values up to £6,000, with tapered reliefs running down from 100 per cent to zero for properties with rateable values between £6,001 and £12,000. The Welsh Government is considering alternatives to the present system. Wales is also going through a revaluation process which will increase business rates for some businesses. 



In Northern Ireland, the future of small business rates relief is uncertain. “Prior to the Northern Ireland Assembly being dissolved, the then Finance Minister published proposals to abolish the Small Business Rate Relief scheme and replace it with a scheme focused on retail and hospitality,” says Wilfred Mitchell OBE, FSB Northern Ireland Policy Chair.

“Removing the universal relief would damage thousands of small businesses in other sectors by increasing their outgoings at a time when they can ill afford it. FSB has lobbied for protections across all sectors.”