Rural Entrepreneurs on the Rise

PHOTO Five years ago, Katrina Frey wanted to make a little extra money, so she started cooking up homemade gourmet jellies and syrups.

Five years ago, Katrina Frey wanted to make a little extra money, so she started cooking up homemade gourmet jellies and syrups. Then she sold them out of the back of her van at a farmer's market in western Nebraska. She made $5,000 in her first year of business.

Today, after taking her venture online and moving to a building on Main Street in the small town of Stapleton, the mother of three whose husband is a farmer now grosses $50,000 a year.

John Marquis started his entrepreneurial journey four years ago in the basement of his Ogallala, Neb., home, recreating a vintage men's fragrance. Today, six online vendors sell his Ogallala Bay Rum aftershave and cologne to customers in 50 states and 31 countries.

Marquis and Frey are rural entrepreneurs who have created thriving businesses despite the bleak economy and their out-of-the-way locations. They're not the only ones. From 2008 to 2009, the number of self-employed Americans increased by 200,000 to 8.9 million, according to Challenger Gray & Christmas, a Chicago outplacement firm.

In 2009, business startups in the U.S. reached their highest level in 14 years, according to the Ewing Marion Kauffman Foundation, a Kansas City organization that helps entrepreneurs. E.J. Reedy, a manager in research and policy at the Kauffman Foundation, said small businesses are up, and entrepreneurship in rural areas has been spiking too.

"Places like Nebraska, Iowa ... there's a lot of growth in that area," he told ABCNews.com.

For rural entrepreneurs, one of the biggest barriers to success is the sheer distance from buyers and suppliers. But that is no longer an issue because they can reach customers online anywhere in the world.

"The Internet has expanded my borders," Frey said. "It's made it so I can be in a little town of 300 and still operate a business beyond those borders. It's made it so I'm just not limited to those county lines."

But while the Internet has opened the doors for many rural entrepreneurs, it also has created a very competitive marketplace, said Janell Anderson Ehrke, founder and CEO of Grow Nebraska, a non-profit educational organization that helps startup business owners in the state. That's why her group, which is funded by grants from the U.S. Department of Agriculture and others, spends most of its time educating businesses about the fine points of online marketing.

The Rural Business Boom

Grow Nebraska started with 51 charter members in 1998, and that number has grown to 307 in 2009. Ehrke said the goal for the program is to have 400 members by the end of this year, and 700 by 2013. She even thinks that they could end up expanding into other states such as Iowa, South Dakota or Wyoming.

And according to Ehrke, it's all thanks to a boom in rural businesses.

"With the economy, entrepreneurs have to expand their service area to survive," she said. "Basically, these small companies need and want marketing help. We're there for that, and a lot of it is web-based. Whether it's help making websites, help with social media or how to go forward with e-commerce, that's our role, and we're happy to do it."

Only a handful of similar programs like Grow Nebraska exist in the country, Ehrke said. The Nebraska program was modeled after a program in Kentucky, and they look to other similar companies in New Mexico, Ohio and New Hampshire.

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