While businesses in less populated areas of Scotland face many of the same macro-economic factors as those in metropolitan areas, there are particular challenges to growing a business in a rural community.
However, many of these challenges also present opportunity to entrepreneurs. Attracting talent in the first instance can be difficult due to a sparse population - yet the chance to promote a business in areas with a high quality of life creates employee loyalty.
Here are five key points to consider when scaling a company in these circumstances:
1. Put people first - having the right team in place should be a priority
SMEs within the private sector are the primary employer in Scotland's rural areas. Figures to March 2018 showed that SMEs accounted for four in every five private sector jobs in remote rural areas, compared to less than one in two for the rest of Scotland. When you couple those facts with the Highlands and Islands having the highest employment rate in Scotland - and the region's network of 14 colleges and research institutions providing for over 7,500 students locally - the opportunity to find a reliable workforce and the right skills is out there.
2. Technology comes second, after the team
A 2017 study from Stanford Business School noted that the abilities of founders and the management team in any company looking for investment is the main attraction for investors. This was ahead of the technology or product they were commercialising.
Management teams will significantly boost their chances of obtaining investment by emphasising their personal capabilities, passion and expertise.
3. Tap into Scotland's ecosystem
Scotland has an excellent ecosystem that encourages entrepreneurship, underpinned by economic development principles of innovation and skilled employment - and backed by the Scottish Government via Highlands and Islands Enterprise (HIE) and Scottish Enterprise.
The Scottish Government Rural Payments and Inspections Directorate offers assistance to the agricultural sector. Support includes business development schemes, grants and subsidy payments. HIE can support businesses in designated 'fragile areas' in the Highlands and Islands - including small businesses that might not be eligible for assistance elsewhere.
The Scottish Government website has a full list of grants, subsidies and services available to businesses.
4. Be positive. Turn challenges into opportunities
Recent analysis from the Federation of Small Businesses for Scotland (FSB) noted that, in urban areas, the number of registered businesses increased by 16% between 2010 and 2017. This compares with growth of just 8% in rural areas.
Conversely, the rate of population increase in Scotland's rural areas has grown significantly faster than in Scotland's cities. Some parties believe that supporting local firms and rural start-ups should be a key priority for the Scottish Government and the wider public sector, to retain local businesses and skills at the heart of local communities.
5. Be agile and adaptable
Just because you started out with a particular product idea, concept or vision doesn't mean that's what you'll end up with as a final, commercial product. An agile mindset means being prepared to change your mind and pivot if things aren't working out. Some of the most successful entrepreneurs in the world started out with an entirely different concept to what their businesses eventually became - having found a space in the market with customer demand.
This article first appeared in the P&J Leader. By Derek Stroud, corporate partner at Brodies LLP.
Contributor
Partner
