Starting a small business can be an exciting opportunity to achieve personal success while bringing needed services to a particular community. Despite the many advantages, there can also be a few unique challenges, especially in a high-crime area.
An area may be considered high-crime for several reasons. It might have higher-than-average crime rates or many abandoned or poorly maintained buildings. The neighborhood may also have economic challenges, high noise levels, and a lack of community spaces and educational opportunities.
Despite these negatives, a small business can thrive in such a neighborhood with the proper preparation and planning. Here are a few strategies to support success in a high-crime area.
1. Consider the Offering
Some businesses fail in economically challenged neighborhoods because they offer a product or service the residents don’t need, don’t want or can’t afford. Companies in these areas should focus on providing essentials at an affordable price. Successful businesses may include grocery stores, discount retailers and dollar stores.
Entrepreneurs might start a company that offers essential services, such as car washes, beauty salons or barber shops. Other successful small businesses in high-crime areas may include fast-food restaurants and small convenience stores.
Businesses can also succeed in lower-income neighborhoods if they don’t rely on customers visiting the location. A warehouse or distribution center requires moving products out of the area rather than attracting customers to a physical storefront.
2. Narrow Down the Location
Location matters when small businesses reside in an area like this. Purchasers should consider factors like:
- Nearby parking: A location that offers convenient parking provides easier access for customers. People who can’t find a place for their cars may drive by to find a different business.
- Other local businesses: Before setting up a shop, businesspeople should consider what other places operate there. Companies tend to succeed when surrounded by various businesses.
- Square footage: Even a building in a prime location may fail to meet operational needs. Factors like square footage help determine whether a building is the right fit for a particular use.
According to research, 44% of consumers have switched brands recently due to convenience. A central location with everything customers need can improve success.
3. Focus on Marketing
Marketing promotes companies so residents and others want to visit. Owners should start by advertising to people in the local area with fliers and posters. Residents likely form a significant portion of the customer base. Those who build relationships with community members can encourage them to visit their small businesses.
Beyond advertising to the local community, owners can expand their success by advertising and selling online. In 2024, 20.1% of retail purchases are expected to occur over the internet. Using multiple promotion methods allows small-business owners to supplement their companies in a neighborhood with low sales opportunities.
4. Do Market Research
If previous companies in a neighborhood failed, what was the reason? Market research can answer this question and provide a valuable basis for decisions that small businesses face in a high-crime area.
Here are a few of the most common reasons small businesses fail:
- They face financing hurdles due to improper pricing or a lack of knowledge of their revenue.
- They lack proper management to oversee employees and care for daily operations.
- They fail to plan for marketing, competitors and opportunities within their market.
- They underestimate the cost of marketing and its importance in bringing in customers.
A knowledge of local businesses and why they closed allows company owners to avoid the same pitfalls.
Those who start small businesses in an area should look at other successful companies, especially those in the same industry. Considerations include what makes them succeed and the unique strategies to make a particular business stand out.
5. Provide Quality Products and Services
Small businesses operating in an economically challenged neighborhood may need to do more to convince customers to visit and purchase products or services. Their focus should include product quality while keeping prices low to attract and retain local shoppers.
Small businesses should also focus on offering quality service. Consumers appreciate companies that demonstrate genuine care and concern for them. A personalized approach can improve customer service. Owners should prioritize fast service and tweak their strategies by considering feedback and reviews.
6. Implement Proper Security
Robbery and vandalism can cause significant expenses for a small company. These costs include replacing products and repairing the building. Vandalism may even raise insurance rates, leading to higher costs.
Crime can make it more expensive to operate a business in the neighborhood. Implementing proper security allows owners to combat criminal activity. The following measures can protect a property:
- Security cameras
- Guards
- Surveillance
- Alarms and fencing
- Lighting
- Vehicle barriers
Small-business owners should also prepare their employees for security threats so they can identify and respond to unsafe conditions.
7. Be Flexible
Businesses in impoverished areas face unique challenges that companies in other places don’t. Owners need flexibility to adapt to changing circumstances.
Flexibility may include innovating on products or services. The strategies that work in other locations may not suit the atmosphere in a run-down neighborhood. About 74% of high-growth small businesses say innovation is their top priority.
Part of business flexibility involves responding to feedback. Customers form the foundation of successful operations, and company owners should accommodate their requests for a greater variety of products, different operating hours or better customer service. Listening to clientele can bring greater long-term loyalty.
8. Train Employees
Employees work at the business daily, playing an essential role in its success. Employee training should include specific strategies for success in high-crime areas.
These strategies may include best security practices and effective ways to serve a particular customer base. Well-trained employees can make a difference in a business’s success.
9. Collaborate With Other Local Businesses
Businesses that band together often have a greater chance of success, especially in neighborhoods with higher crime or socioeconomic challenges.
Those starting a business in an area with high crime rates should establish relationships with others in the area. Helpful things to ask for include success tips, security advice and other expertise tailored to the neighborhood’s unique environment.
Supporting local events or organizations can also improve a business’s success. In poor or dangerous neighborhoods, people will appreciate companies that support initiatives and events that enhance the community.
Building Resilient Businesses in High-Crime Areas
Small businesses can succeed in high-crime areas despite the challenges. Thriving in these environments often results from proper planning, including acknowledging and responding to the area’s unique challenges.
Businesses may need to set up additional security or institute a different employee training program, among other strategies. These efforts can help them succeed and establish themselves as necessary members of the community.