2015 Kaufmann Reports Paint Mixed Message for Minnesota Small Businesses

Date: January 06, 2016

One type of small business is down while other facets are soaring.

Let’s start with the bad news first: Minnesota ranked as one of the worst states in the country for new startup activity, according to a 2015 Kaufmann Foundation report.

The report measures the rate of new entrepreneurs in the economy, the opportunity share of new entrepreneurs (calculated as the percentage of new entrepreneurs driven by opportunity vs. necessity) and startup density.

Minnesota finished three spots lower than it did in 2014, particularly because of a low rate of new entrepreneurs. In a given month, Minnesota averaged 170 new entrepreneurs for every 100,000 adults, one of the worst in the country. Montana, meanwhile, the best in the country, averaged 540 new entrepreneurs for every 100,000 adults.  

The Good

However, Minnesota finished atop the Kaufmann Foundation’s “Main Street Entrepreneurship” index for the top 25 biggest states in the country.

In particular, Minnesota had one of the highest rates of small business ownership in the country as 7.17 percent of adult Minnesotans owned a business as their main job in 2015. On the low end for the biggest states in the country, Alabama registered 4.04 percent of their adult population as owning a business.

Where Minnesota really thrived, though, was in established small business density. For that metric, Kaufmann measures the number of established small businesses per 100,000 people.

Out of every 100,000 adults in Minnesota, 1,229.5 owned established small businesses, the highest amount for the biggest 25 states in the country. In contrast, Arizona, the state with the lowest rate, had 721.7 established business per every 100,000.

These ups and downs might not be a surprise to the state’s small business owners who saw their fair share of good and bad in 2015.

Related Content: Small Business News | Economy | Minnesota

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