Poll: Rural Nebraskans concerned about future for small businesses
Many rural Nebraskans are concerned about the future of small-town businesses and are willing to endorse various strategies to help them survive, according to the Nebraska Rural Poll.
The 17th annual University of Nebraska-Lincoln poll was sent to 6,350 households in Nebraska's 84 nonmetropolitan counties in March and April. Results are based on 2,323 responses.
Among the topics explored in this year's poll is the future of small businesses in rural Nebraska. A recent survey found that as many as one-fourth of all Nebraska small business owners are likely to exit their business in the next five years and up to one-half over the next decade. Nationally, data pegs that percentage much higher.
The Rural Poll found that about 49 percent of rural Nebraskans believe the number of businesses in their community will be about the same in five years. Thirty-nine percent expect there to be fewer businesses while only 13 percent expect there to be more. The data also show that the smaller the community, the larger the percentage of rural Nebraskans expecting fewer businesses in the future.
Another dynamic at play is the fact that the age group most likely to start new businesses--35 to 54--is in decline in rural Nebraska, said Odee Ingersoll, director of the Nebraska Business Development Center, based at the University of Nebraska at Kearney.
"So it's not just the number of people leaving their businesses, but the number of individuals who are at the age where they might be in a position to start a business is dropping," Ingersoll said. "This is critical."
Forty-one percent of poll respondents said that when a business owner leaves or retires, the likeliest outcome is that business is eliminated. About 31 percent said it's likeliest that the business will be purchased by another owner, while 12 percent say some other business providing the same goods or services will start up and 11 percent say the business will transition to a member of the same family.
The poll found that at least 40 percent of respondents backed the following strategies to pursue when a small business owners is considering leaving the business: work with the owner to transition to a new owner; provide technical assistance or training to people who might want to acquire the business; and use local revolving funds for loans to enable a new owner to acquire the business.
The poll also explored rural Nebraskans' use of wills and estate planning. It found that 46 percent have a will or estate plan, while about 41 percent do not currently have one but expect to have one prepared. Thirteen percent said they don't have one and don't expect to have one.
Randy Cantrell, UNL rural sociologist, said he was surprised that even among those in agriculture, where investments in land and equipment can be quite significant, fewer than half the respondents have a will prepared. Also surprising: 51 percent of those with a high school diploma or less in education have a will prepared, compared to just 45 percent of those with at least a bachelor's degree.
The poll also found that about 40 percent of rural Nebraskans expect their estate to go to family heirs who will keep the estate active and ongoing in their local community, while 24 percent expect it to go to family heirs who will sell the estate and withdraw the assets from the community. Eighteen percent said they don't think they'll have enough estate to leave behind.
The Rural Poll is the largest annual poll of rural Nebraskans' perceptions on quality of life and policy issues. This year's response rate was about 37 percent. The margin of error is plus or minus 2 percent. Complete results are available online at http://ruralpoll.unl.edu.
The university's Center for Applied Rural Innovation conducts the poll in cooperation with the Nebraska Rural Initiative with funding from UNL Extension and the Agricultural Research Division in the Institute of Agriculture and Natural Resources.
Development officials look to help small businesses transition, not close
Development officials say several approaches can help small-town businesses survive their owner retiring, but it's important to start with the understanding that most owners don't seek out such help on their own and many, indeed, don't even want others to know they're contemplating quitting.
Representatives of the Nebraska Business Development Center and Center for Rural Research and Development, both based at the University of Nebraska at Kearney, participated in this year's Nebraska Rural Poll, which explored rural Nebraskans' feelings about what becomes of small-town businesses when their owners retire or leave the business.
Nebraska research shows that as many as one-fourth of all Nebraska small business owners are likely to exit their business in the next five years and up to one-half over the next decade.
Rural development agencies are developing approaches that might help businesses survive their owners retiring.
Business owners tend to be fairly conservative. They're unlikely to explore options for how to leave their business and may just plan on liquidation, said Odee Ingersoll, director of the Nebraska Business Development Center. He said his agency has found that holding public informational meetings isn't very constructive because business owners are not likely to turn out; they may not want others to know they're thinking of quitting the business.
He encourages business owners in this situation to do some planning, the farther ahead the better. Rural development officials might be able to help them find a buyer for their business.
"We prefer to develop a local owner," Ingersoll said. "Keeping the wealth in the community is the key."
His center can help identify businesses that are viable enough to warrant transition help, and it's working to help community leaders understand their role in helping businesses transition to new ownership.
One possibility is to try to attract Nebraska natives back home to buy existing businesses, said Shawn Kaskie, director of the Center for Rural Research and Development. The center is trying to develop a database of job and business opportunities to market to university alums, especially those who have left the state but may be looking for a way to return.