Finding Your Niche in a Small Town You don't have to look far to find a profitable niche in your small town.

Q: I am looking to start a small business, but my main problem is that I have not come up with a good idea. Right now, I am a high school teacher and coach. I live in a town of about 3,000 people, and I have about $2,500 to start with. I want to start in the summer to earn extra income and just see where it takes me. I am planning on keeping my other job as well. Any help would be greatly appreciated.

A: Just like starting in a big city, where there is a lot of competition, starting in a small town presents unique challenges. Though you might not find dozens of companies selling similar products or services, you will encounter customers who might be set in their ways and reluctant to venture out into the unknown.

That shouldn't discourage you from starting a business, however. You just need to be smart about it. Opening up a corner grocery across the street from the corner grocery that's been there for 30 years and is the primary source of groceries for your town of 3,000 is probably not a wise move. Of course, with only $2,500, you probably don't have a corner grocery in mind.

If you're not sure what kind of business to start, the best approach is to find a need in your market and fill it. That goes for any kind of business start-up, but it's particularly true in your case. You might find that a service-oriented business is the safest route, rather than a retail establishment. For example, if there is no company offering pet-sitting services in your town, there's a niche for you.

Sit down and brainstorm. What do you, as a consumer, wish for? What product or service would make life easier or more enjoyable? Look through your local phonebook and newspaper and magazine classified ads to see what kind of businesses are or are not out there. Even if that type of business exists, that shouldn't necessarily preclude you from starting one like it--you would just need to do things better than the competition. It's a fine line though--going back to that corner grocery example, certain types of businesses will have loyal customers, and trying to lure them away would probably be an exercise in frustration.

If you can come up with a list of five to 10 possibilities, then you can start narrowing down your list to the one business that suits you best. Read: It's not enough just to start a business because there's a need for it. You have to enjoy what you're doing, too. After all, you are the one investing your own money--and sweat--into the business.

Now I'm going to sound very cliched, but I have a point: Do what you love, and the success will follow. There's a reason you've heard that expression, or a variation of it, a million times. It's true.

The opinions expressed in this column are those of the author, not of Entrepreneur.com. All answers are intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.