A high turnover rate, among other issues, is keeping Minnesota businesses on their toes.
New, Not-So-Flattering Report on Minnesota’s Small Businesses
The unemployment rate might be improving for
Minnesotans, but considerable turnover and a decline in startups continues to
wreak havoc on small business in the state.
A new report by the U.S. Small Business
Administration’s Office of Advocacy gave Minnesota positive scores for a low
unemployment rate (3.7 percent) and continued economic growth—but that’s not
the whole picture.
The state’s economy grew at a rate of 2.9
percent in the third quarter of 2015—faster than the overall national average,
the report found. But that rate is down from 3.5 percent in 2014 and down
further from 2013’s 4.0 percent.
The report also noted that there are more than
half a million small businesses in the state, making up almost 98 percent of
businesses while also employing over 1.2 million workers.
But the rate of startups in the state has
declined from 2.7 percent in 2006 to 2.5 in 2015. And while the exit rate of
businesses shows slight improvement, it still remains considerable: 4,878
establishments started up in Minnesota in 2014, but over half that number
exited the state. Minnesota’s unfavorable taxes play a large part in businesses
leaving the state, as an earlier NFIB article points out.
An imbalance in business owner demographics is
noticeable in the state as well. Only 7.0 percent of women in the state are
self-employed, as opposed to 12.3 percent of males, and only 5.4 percent of
minorities are self-employed.
