NASHVILLE, TN – A new report from JPMorgan Chase highlights a persistent economic gap between rural and urban small businesses in America. The analysis, covering the pre-pandemic years from 2011 to 2020, found that rural microbusinesses—firms with fewer than five employees—were significantly less likely than urban counterparts to reach $1 million in annual revenue during their first five years of operation.
Only 6% of rural firms hit that benchmark, compared to 8.6% of urban firms. That gap held true across all U.S. regions and within nearly every industry. The report suggests that structural challenges in rural communities—such as lower population densities, reduced market demand, aging demographics, limited labor pools, and slower broadband access—are key barriers to small business growth.
Even when operating in the same industry and region, rural businesses showed slower revenue growth and lower revenue ceilings than urban businesses. And while rural communities make up 70% of U.S. landmass and are home to 14% of the population, they still face systemic challenges in attracting investment, skilled workers, and younger residents.
The study emphasized the importance of local policy in addressing these divides. Investments in broadband, workforce training, housing, and infrastructure could help strengthen rural small business ecosystems. The report also noted the urgent need for succession planning in rural areas, where a higher share of business owners are over 65 and bank consolidation has limited access to financing.
While rural entrepreneurship remains a cornerstone of many local economies, the findings suggest that without targeted policy support, rural businesses will continue to lag in achieving meaningful growth milestones.