Small Business Strategies: Big idea can work in a small town

— -- What happens when you have a big idea but a small market?

Many small-business owners and would-be entrepreneurs face this problem. Their business can't grow because they don't have enough customers in their geographic area.

The challenge is tough, but not insurmountable.

Last week, I went to one such market, Beckley, W.Va., to meet with women small-business owners there.

Beckley could be the poster child for a city with a small customer base. It's a rural community in Appalachia with fewer than 20,000 residents scattered widely through rolling hills.

Not only is it small, but people in Beckley don't have a lot of extra money.

The median household income is $31,480, compared to a U.S. median of $51,914. A quarter of the residents live below the federal poverty level, according to the Census Bureau.

While Beckley is perhaps smaller and poorer than most American communities, the problem of having too few customers near you can happen most anywhere outside a major urban area. Even if you live in a good-sized city, not enough people there might need your particular product or service.

Or perhaps not enough customers are willing and able to pay the price.

Years ago, I visited a small, family-run poultry farm outside Sioux Falls, S.D. In addition to chickens, the farmer organically raised geese and ducks. Now, in upscale restaurants in New York or Los Angeles, organic duck would be in demand and bring a hefty price, but not in Sioux Falls.

The farmer had a great product but the wrong market.

So what's an entrepreneur to do?

1. Widen your view. Why are you serving only your local area? Is your product or service something that truly can't be delivered from afar?

Certainly, some services have to be done in person: If you're a hairdresser, you can't cut hair over the Internet.

But most products, and even many services, can be sold and delivered from a distance. Perhaps you need to add a second location. Even a hairdresser might be able to make an arrangement with a salon in a nearby city to see customers there once a week as a way of expanding a market.

2. Get a specialty or niche. It sounds counter-intuitive, but often the way to go big is by focusing small.

By targeting a specific industry or demographic group for your product or service, you can serve a larger geographic area.

In Jackson, Miss., I ran across an accounting firm specializing in optometrist practices. It served optometrists from coast to coast. Most accountants wouldn't think about serving clients 3,000 miles away, but how often do you really see your local clients? Another reason to find a niche: You can often command higher prices

3. Get online. If you widen the geographic location of your customer base, much of the work you'll do or the sales you'll make will come over the Internet.

Of course, I know you're already online, but you'll need to become a bit more of a power user. You might need e-commerce capabilities, customer-service functions, or good collaboration and document-sharing tools. These aren't difficult and shouldn't scare you.

4. Get the infrastructure. You may need other operational changes to serve a wider geographic area.

Remember that South Dakota poultry farmer? Even if she wanted to sell to New York restaurants, she didn't know how to get the permits to ship across state lines or arrange for the shipping.