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Project Background

Rural community economic welfare is inextricably bound to the prosperity and survival of the businesses that provide the goods, services, jobs, and tax revenue that residents need and want to maintain a good quality of life. The goal of this project is to help rural businesses become more innovative, productive, and profitable through network affiliation.

Networking is a tool that can help rural businesses be more successful through information sharing, innovation diffusion, risk sharing, and access to complimentary resources. The advantages of networking accrue to large and small businesses alike, but given the limited resources of small businesses relative to large ones, networking may be more important to small business survival.

Researchers from Iowa State University, University of Nebraska, Ohio State University, and the Minnesota Rural Policy Center are involved in this four year study of business associations. The project is funded through a grant from the United States Department of Agriculture. The purpose of this study is to learn what successful associations do that keeps members motivated and actively involved over the years. This information will be beneficial for business and association leaders and policy makers who are committed to helping small businesses survive. In addition, since the success of small businesses is a critical factor in the economic vitality of communities, especially small towns, learning how to sustain business associations will provide an important tool for policy makers and community leaders.

We are interested in networks organized by community and industry due to their more likely applicability to a wide range of rural economies. Our definition of a rural community is an incorporated municipality with 10,000 or fewer in population in a non-metropolitan county. Community business networks are groups such as the local Chamber of Commerce, the downtown development group, or the "Rural Action" groups found in Iowa (networks of local business people and farmers organized for mutual economic gain). Examples of industry networks are the Specialty StoresNetwork (a group of owners of rural Midwestern womens clothing stores), Practical Farmers of Iowa, the Minnesota Newspaper Association, and the Nebraska BankersAssociation. We limit our investigation to industry networks whose membership is likely to consist of a substantial number of rural businesses. We define business network as a group of businesses joined in a voluntary formal organization (i.e. the network contains officers, by-laws, dues, regular meetings) of indefinite duration having as one primary goal the enhancement of business success.

Blueprint for Starting New Business Newtworks:
A Strategy for Rural Community Economic Vitality

Module I: Why Network?
Module II: Encouraging Resource and Risk Sharing
Module III: Communication
Module IV: Recruitment of Members
Module V: Leadership
Module VI: Transforming an Informal Group into a Formal Network

Appendix 1A
Appendix 2A
Appendix 2B
Appendix 3A
Appendix 4A
Appendix 5A
Appendix 5B
Appendix 5C
Appendix 6A
Appendix 6B
Appendix 6C