The coronavirus pandemic has hit small businesses hard across the country. Many business owners have had to make difficult decisions regarding operations, staff, or even whether or not to shut down permanently. Many Minnesota business owners have felt the pain of the pandemic first hand. However, there’s a glimmer of hope as we transition out of the pandemic.
Minnesota’s small and new business economy was actually on the rise before the pandemic struck. On the Inc. 5000 list for 2020 (which ranks the 5,000 private companies exhibiting the fastest growth in the U.S.), 80 companies from Minnesota were listed — with several in the top 1,000. YourSix, Making Web, Bare Home, and Eide Communications were among the diverse range of businesses from the state that earned inclusion, demonstrating a vibrant, state-wide startup culture in everything from software, to retail, to media services and more.
Minnesota has excelled at making it easy for people to turn their ideas into official companies. The steps to forming a Minnesota LLC, outlined by ZenBusiness details the entire process, and makes clear that all of it can be done online (and really in just a matter of hours). This is not necessarily the difference between a new company getting started or not. But it’s certainly one less hurdle in front of prospective founders, and it has helped to make Minnesota that much more attractive to entrepreneurs.
Minnesota’s evolving diversity also helps to position the state for long-term startup success. Minnesota isn’t particularly diverse (it’s often described as a “white middle-class state”), but it actually ranks somewhere in the middle of the country in various diversity measures — and has various minority populations growing more quickly than the caucasian population.
Growing diversity tends to be good for business — particularly when there’s an expanding effort to support minority-owned companies. The movements for social justice and equality in 2020 have led to various new ventures aimed at supporting innovation and economic prosperity among Minnesota minorities. This should have a lasting impact, and will hopefully result in more new, minority-owned businesses in the aftermath of the pandemic.
There is action from state leadership aimed at sparking business innovation. Recently, Fast Company’s write-up on VC funding counted Minnesota’s own Senator Amy Klobuchar among the public officials seeking to help startup growth outside of Silicon Valley, New York, and Boston. Klobuchar’s New Business Preservation Act is not Minnesota-specific, but it does represent a local leader taking real action to direct startup funding away from the coasts to level the playing field. Initiatives like this one lay the groundwork for prospective founders in a state like Minnesota to secure the VC funding they need following the pandemic.
None of this erases the struggles that small business owners have already experienced. Some of those businesses may not return. But there is still reason for hope regarding Minnesota’s startup climate and small business activity moving forward through — and ultimately past — the pandemic.
This is a contributed post.