For the second year, Minnesota ranks first of the 25 largest states in the Kauffman Index for Main Street Entrepreneurship. We have the highest rate of business owners (7.75%), established small business density (687.2 small businesses per 1,000 firms) and business survival rate (50.75% that made it to at least five years in business).
However, while we’re going great as a state for established businesses, Minnesota is not doing so well when it comes to new entrepreneurs. The Kauffman Index also measures Startup Activity and Growth Entrepreneurship. Of the 25 largest states, we rank 21 in terms of new Startup Activity and 15 for Growth Entrepreneurship (rate of startup growth).
We do need to keep supporting existing entrepreneurs – they are job creators and economic drivers. However, we also need to develop a healthy pipeline of new entrepreneurs. Given the high risks of starting a new business, Southern Minnesota Initiative Foundation (SMIF) is focused on working with our regional partners to create a thriving entrepreneurial ecosystem.
To catalyze entrepreneurs still on the fence about taking the first big step, we partner with Minnesota Cup – the nation’s largest statewide business startup competition – and Ignite Cup in Red Wing, a feeder business competition for the Minnesota Cup. This year, we’re offering three $5,000 grants to the businesses from SMIF’s 20-county region that have the most success at Minnesota Cup.
Every fall, we host the Entrepreneurial Bridge conference in Austin, Minn. This is a chance for high-growth, high-potential business leaders in our region to learn from each and from industry experts. Part of the Entrepreneurial Bridge is a Student Business Plan Competition. This year, students have a chance to win $10,000 in prizes, plus practice making businesses pitches in front of the Foundation’s Leadership Circle.
SMIF is also wrapping up a two-year pilot program to help our region’s minority business owners: The Prosperity Initiative. According to a 2017 University of Minnesota report, “Immigrants and Minnesota’s Workforce,” it’s predicted that by 2035, 25% of Minnesota’s population will be people of color. To help these highly entrepreneurial yet often under-resourced populations, SMIF used funds from Minnesota DEED to match 25 minority businesses with business coaches and to host several business conferences and trainings.
When SMIF surveyed minority business owners, 91% indicated they would benefit from additional resources to help their business grow. Because SMIF is a foundation, people often don’t know that it has the ability to make loans. However, SMIF has a range of loan programs to help small businesses that may not qualify for bank financing or that need additional funds to “bridge the gap.” The Foundation makes $1.2-$1.5 million in loans annually and has made nearly 600 loans in the past 30 years.
Just this month, SMIF announced our newest entrepreneurial initiative: REV – Rural Entrepreneurial Venture. REV utilizes the Center for Rural Entrepreneurship’s proven Energizing Entrepreneurial (e2) Communities framework to help rural communities identify and support entrepreneurs already invested in their town. REV will build on the Foundation’s history of asset-based community development, focusing on helping communities develop long-term strategies and tools to bolster and sustain entrepreneurial activity.
SMIF knows that our Greater Minnesota communities have a lot of offer entrepreneurs: a range of technical assistance and community bank partners, lower cost of living and a culture of collaboration and support. We need to make sure that people are aware of all the resources available to them.
At SMIF’s board meeting this month, we heard from one of our Prosperity Initiative clients, Angel Uribe, the owner of Stages of Change Center in Mankato. “I’m now part of a business community. That inclusion has been transformative not only to my business and my bottom line, but to me as a business owner. You’ve allowed me to take my passions and dreams and turn them into something really amazing,” Angel told SMIF’s Board.
When aspiring entrepreneurs are aware of resources and know they have support, they are more willing to take the next step. April 30 is the start of National Small Business Week; if you’re an aspiring entrepreneur or offer business services, we encourage you to get out and connect. Whether at SMIF’s Small Business Saturday sessions on May 6 and May 13 or other small business events happening next week, we look forward to seeing you!
As always, I welcome your comments and questions. You can reach me at firstname.lastname@example.org or (507) 455-3215.