It’s a good sign when small businesses move into a neighborhood. The best and most profitable small businesses create jobs and keep money in the local economy, as well as support charities, community organizations and events. Of course, they also provide their service or product to the community.
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But not all small businesses are created equal. See which mom-and-pop shops play a major role in making neighborhoods vibrant, healthy, wealthy and unique in case you’re looking to start a new business in your town.
Last updated: June 14, 2021
Independent Coffee Shop
Community branding, tourism and downtown development firm Roger Brooks International developed a community-planning guide that outlines what the firm calls “ingredients of an outstanding downtown.” When a town has several businesses that sell food and drinks in a radius of a few blocks, it helps create what the report calls a “critical mass” or “clustering” effect — a hallmark of a healthy neighborhood.
Vibrant nightlife is another key. And coffee shops can double as venues for entertainment like music, comedy, poetry and open mics. Finally, indie coffee shops break the Starbucks mold and lend flavor and culture to their ZIP codes.
There are over 75,000 pizza joints in the United States, according to Statista. And it’s hard to imagine a truly great neighborhood without a truly great pizza shop. Few small businesses are more American than the neighborhood pizza place.
If you open a great one, you’ll likely get a very warm reception despite having to compete with the likes of Domino’s and Pizza Hut. After all, there’s enough business to go around. The average American eats 46 slices of pizza per year and the country as a whole gobbles up 350 slices every second.
Wine and Spirits Shop
The Brooks report names wine and spirit stores among the “destination retail shops” that every strong neighborhood should have, provided the town permits the sale of packaged goods. They help create critical mass in downtown shopping, retail and business districts and add flavor to the neighborhood. They also give nearby restaurants and sidewalk cafes that don’t have liquor licenses the chance to offer BYOB service.
Corporate giants like Borders and Barnes and Noble dealt the first blow to the local bookstores that had long been a hallmark of healthy neighborhoods everywhere. Then came Amazon and the crushing tide of online retail. According to Writer’s Digest, however, neighborhoods need local bookstores now more than ever.
Bookstores are a hub for creativity and a safe place for inquisitive kids. They often hold events that generate critical mass like book signings, author readings, book clubs and contests for budding authors. Writer’s Digest also points out that for every $100 you spend in a local bookstore, $73 goes back into the local economy compared to $43 for national chains.
Bistros, sandwich shops and other small-scale eateries do their towns a favor when they offer sidewalk seating. Sidewalk cafes add to the beneficial clustering effect — and they contribute to the neighborhood in other ways.
They create a buffer between road traffic and parking and they generate crowds waiting for outside tables. And those crowds are likely to kill time window shopping or perusing adjacent businesses. Sidewalk cafes also create a pleasantly crowded and lively atmosphere that keeps visitors coming back.
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Barbering is America’s fastest-growing profession, according to Forbes. That’s because the men-specific grooming industry is experiencing a massive boom. Barbershops decreased by 23% between 1992-2012 as the traditional red, white and blue pole gave way to salon culture. But barbershops are back.
In 2013, the number of barbershops grew at least 10%, and they’re expected to help make male grooming a $26 billion industry by 2020, Forbes reported. Barbershops are more than just a place to get a trim and a shave, they’re community hubs of conversation, networking and, of course, barbershop gossip — all of which are staples of vibrant neighborhoods.
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Ice Cream Shop
Families are an important part of the customer base for independent ice cream vendors, according to the International Dairy Foods Association. And most ice cream manufacturers are family-owned businesses.
By opening a business that’s based on things like waffle cones, rocky road, maraschino cherries and whipped cream, you lend a family-friendly feel to your neighborhood and give locals and visitors alike a reprieve from the corporate chains that have trampled the nostalgia of the old-fashioned ice cream parlor.
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A brewery that doubles as an eatery and bar is just the type of small business that meets the standards of a key trait of healthy neighborhoods — an anchor tenant. According to the Brooks report, anchor tenants are the small business ideas that make a town or neighborhood a destination.
Anchor tenants are the ones that make the “best-of” section in the town’s marketing brochures. Cities offer anchor tenants the choicest leases and factor them into their advertising budgets.
Pet Grooming and Supplies Shop
Must-have businesses don’t always cater to human clientele. Major pet store chains often sell everything locals need to feed, bathe and otherwise care for their pets. They also, however, sell puppies, kittens, birds and other animals, many of which come from mills and other shady and cruel sources, which is a turnoff to many animal lovers.
If given the opportunity, many pet owners would likely opt instead for a local, small business that sells unique food, treats and other supplies. Those shops could also offer services like walking, grooming and boarding without asking their customers to contribute to the animal trade.
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The local bakery has been a staple of American neighborhoods since the beginning of America. And the fresh loaves and sweet desserts that they dish up are more popular than ever. Retail bakery sales are projected to grow by 5.5% year-over-year through 2020 — and virtually all of it will go into small-business cash registers and local economies, according to OrderNova, a bakery order platform.
About 65% of all bakeries have fewer than 10 employees — 44% have between one and four. The bakery section of your local supermarket might not have its finger on the pulse of what the community wants in its breads and pastries, but your local baker does.
You can get just about any plant you can imagine — not to mention pots, mulch, soil and everything else you need — at your local Home Depot. You can’t, however, get the personal service, advice and sourcing information that can only come from a neighborhood nursery.
Local nurseries do more than sell plants and pots. They serve as four-season hot spots for anyone with a green thumb who wants to know where their plants, fertilizers, compost and mulch come from. And they keep their cash in the community. Local nurseries are also major supporters of neighborhood endeavors like community gardens and beautification projects.
It’s common for city tourism board websites in America to list “shopping” as one of their main tourist draws. Giant chunks of the internet are dedicated to “best-of” lists chronicling the top local boutique shops and shopping districts. There are more than 74,000 boutiques in the United States, according to IBISWorld research.
By opening a small, limited-range retail specialty shop, you’ll add a special gem to your neighborhood’s shopping district. You could even offer local designers the opportunity to showcase their wares.
Game or Activity Business
Businesses like pool halls, bowling alleys and arcades are not nearly as popular as they once were. But their throwback feel has given them a new life among hip, retro-obsessed young people. They’re also incredibly versatile, providing a place to bring your family, bring your date or hang out with your buddies.
They check off both the nightlife box and the critical mass box. And they give teenagers a place to gather for good, clean fun, instead of wandering the neighborhood looking for something to do.
Restaurants generate critical-mass clustering, and the good ones can even qualify as anchor tenants. More importantly, however, they attract people to the neighborhood as a place to stop before or after their main reason for heading out that night. Most consumer spending takes place after 6 p.m. — that applies to both visitors and locals, according to the Brooks report.
Businesses that stay open at night are crucial tourist draws. Visitors are more likely to book a hotel and stay over if there’s something to do at night. And conference organizers plan their destination based in large part on what there is to do when the conference is over.
Venues that showcase public performances like music, comedy or theater lend vitality to local communities, drawing visitors from the region and beyond. They serve all three purposes prioritized by the Brooks report: They stay open at night, they contribute to the clustering effect and they’re excellent candidates for anchor-tenant status.
The Brooks report counts antique shops among galleries and collectibles stores as the most important “destination retail shops.” Antique shops are rarely open late at night and they’re unlikely candidates for anchor tenant status. But they add character and charm to downtown districts and command surprisingly heavy foot traffic. The report makes clear that thrift shops and secondhand stores don’t fit the bill.
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Small towns, rural communities and inner-city neighborhoods are most likely to exist in so-called food deserts, where major grocery stores are inaccessibly distant. Residents in these communities are forced to either travel farther and spend more money or settle for the limited and often unhealthy food choices available in town.
Officials in food deserts are eager to draw small grocers who offer affordable, healthy food like fresh produce, meat and fish — and for good reason. Neighborhoods outside the umbrella of major supermarket chains are hungry for small, independent grocers of their own — literally.
Artisan Handmade Shop
Like antique stores, small shops that specialize in handmade goods introduce a unique flavor into the neighborhoods they call home. They give tourists and other out-of-towners the feeling they’ve found something that they can’t get anywhere else. They’re also a boon for female entrepreneurs and tend to bring a youthful vigor — 87% of handmade shops are owned by women and the average owner is 39, compared to 50 for the average small-business owner.
Having a competent mechanic is crucial, and going to a small garage is a great way to get to know your mechanic, according to Edmunds. Neighborhood mechanics trade on their skill, reputation and customer service far more than big national chains like Midas or Jiffy Lube and dealership service divisions. You can know your mechanic’s name and trust your car with a small business — often family-owned — if you live in a neighborhood with an old-school corner garage.
Laundromats have long been a staple of communities across America, but a revolution is happening within the industry. The dingy, crowded and poorly lit laundromats of old are being phased out in favor of hip, happening hot spots that are as much a place to hang out as they are a place to wash your clothes. By opening a modern, attractive coin-operated laundry center with amenities like snack bars and lounges, you’ll provide the age-old service of making dirty clothes clean while adding a unique and thriving business to your town.
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A healthy neighborhood means its residents are healthy, too. And people who live near a gym or other health facility are much less likely to be obese, according to Medical News Today. Like food deserts, neighborhoods that don’t have exercise facilities are more likely to be inhabited by people at a greater risk for health problems. If you’re looking for a small business idea that can be both lucrative and beneficial to the community, consider opening a health club.
A Plumbing Company
Plumbing industry representatives used World Plumbing Day 2019 to announce the dire need for more trained, skilled, committed professionals working in the field. America is experiencing a shortage of good plumbers. That doesn’t bode well for the countless people who get stuck with substandard work because good plumbers are hard to find. Neighborhoods need skilled plumbers, not just to fix residential leaks or replace boilers, but because they play a critical role in building and maintaining the infrastructure that brings clean water to communities.
It’s a sad fact for rock-and-roll aficionados, but a fact nonetheless — the guitar industry is suffering a steep decline. This fact was recently highlighted when the music store giant Guitar Center announced it was more than $1 billion in debt. That’s bad news for corporate giants, but not for local music shops, which still play a crucial role in vibrant communities. Neighborhood music shops do more than sell instruments. They give lessons and advice, and they become hangouts and meetings of the mind for musicians eager to network.
Screen Printing Shop
Graphic and screen printing shops are losing revenue even as the number of businesses and employees grows. They, like so many other businesses, are facing stiff competition from online merchants who can print just about any image on just about anything.
But the local screen shop develops deep roots in the community. That’s because community events, festivals, concerts, organizations and fairs all need merch. The local screen printer makes the T-shirts you see at local 5K runs, charity fundraisers, corporate events, fraternity parties and just about anything else that needs a logo or slogan.
Art is a multibillion-dollar global industry. But big-city institutions with priceless works of art are not the beating heart of the art community — that’s the realm of the local art gallery. Art galleries, of course, exhibit works of art. But they also teach art classes, bring in tourist dollars and offer local talent the chance to showcase their work in a formal setting.
Few areas that are down on their luck and in decline can boast an art gallery. Opening an art gallery can elevate a neighborhood to a destination for culture and style.