Businesses Watching Huge Market Potential in Tier II, Tier III Cities

Tier II and Tier III towns have been found to deliver a successful growth across all business sectors. These cities account for 24 % of Indian households and these people have a disposable income of approx Rs 1.7 lakh crores. So the need of the hour is for franchisors to target these potential customers more effectively.

Tier II cities like Ahmadabad, Kanpur, Chandigarh, Patna, Dehradun, Pondicherry, Pune etc have a population of around 1 million, whereas minor cities with population less than 1 million like Madurai, Baroda, Nashik are termed as Tier III cities. These small towns have the potential to become the next hotspot given the greater diffusion of economic activity from metro cities.

Setting up a business in a small city has increased chances to get successful as competition is limited and advertising costs are probably lower than in major cities. Oftentimes, word of mouth is the fastest way to advertise there. In smaller cities, there are a variety of proven businesses to become a part of:

1. Serve Existing Businesses-

  • Own A Franchise

Many small cities lack a source of business know-how. One can target already running businesses. which are in demand in small towns. For example, opening a franchise is the possibility as franchisors offer an already accepted brand. The must-have, of raising local awareness for the new business is eliminated as everyone knows the company’s products and service. And, depending upon the company, and franchise opportunity in a small town in India may be greeted with great expectation. However, it must be noted that a franchise should not be a fail safe business opportunity.


Small Towns, High Profits


Businesspersons considering this option must do proper research as they would do when starting any other business. Just because a product is best-selling in one location does not mean it will be in another.

  • Distributors/ Dealers/ Sales Agents can be an option

Most businesses find it difficult to target every corner of the world. And this is why they appoint distributors. To make your business popular in small towns, one can start distributorship of products which are as discussed, in high demand. And also you have the option to become a sales representative and introduce more products to the not-so-big areas.

2. Start The Missing Business

Unlike a metropolis, tier 2 & 3 often lacks a particular service or industry. When considering business start ups, a savvy entrepreneur should evaluate the environment to determine a need. Demographics also play a part, a small city may lack certain establishments, like a day care center as there is a large senior citizen population who would be needed that. An entrepreneur must research these considerations before opening a business, speaking to the community members who know the deep business insights.

3. Become A Local Goods Retailer

You can start retailing merchandise in these small cities because many small businesses finds it difficult to sell enough merchandise on wholesale pricing. Retailing local sourced merchandise seems an attractive shopping experience for tourists vocational in these rural areas.

There are so many profitable business opportunities which you can take to start business in rural areas and yet make it interesting and big. All you need is a good business strategy and a determined mindset.

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