Inexperience in rural business practice
Insufficient business experience in small communities
In many small communities in the developed nations, the increasing complexity of modern economic life has outpaced the structures and procedures established for managing a business with the small-town environment. Current costs and complexities of doing business limit the extent to which the personalized approach to management can be actualized. The restricting of personal service, in turn, discourages the frequent patronage of many customers, thereby reinforcing a sense of failure on the part of many small businessmen.
The skills of doing precise cost-projections, analysing the potential profit over against the cost of doing business, advertising to wider trade areas, and developing new product and customer markets are not utilized. The basic skill of calculating the number of manufactured items required to cover the cost of the machine producing the item, for example, is virtually unknown to small-town residents. Businessmen do not understand or seek out skills or funds required for surviving the first year of operation, which results in a high number of initial failures. Both the lack of business skills and the unawareness that certain skills are needed result in a failure mentality and a reluctance of businessmen to try to establish a business.