Saturday Feb 04, 2023

Pandemic opens window of opportunity, and Minnesota business ownership now at 10-year high – Star Tribune

npressfetimg-1092.png

Spurred by a mix of pandemic disruption and personal ambition, business ownership in Minnesota is at a 10-year high.

New business formations are rising across the nation. In 2021, for instance, business formations in the U.S. topped 400,000 each month for the year, the first time that has occurred in at least 20 years. Online data on U.S. business formations compiled by the Census Bureau date only to 2004.

“One explanation is the pandemic has really prompted a lot of people to think carefully about what they really want to do in their working lives,” said Dan Forbes, an associate professor of strategic management and entrepreneurship at the University of Minnesota’s Carlson School of Management.

Whatever the reason, thousands more Minnesotans took a leap to create their own business over the last two years. Business formations nearly doubled between 2020 and 2022 compared to 2017 and 2019, census data show.

How employers handled work-from-home or on-site operations during COVID-19 could have played a role, as well as requirements for workers who had to double as caregivers as the pandemic shut down schools and day-care centers, Forbes said.

Other factors include advancements in digital technologies that allow people to work remotely, workers shedding the cost of commuting or people wanting to adjust their cost of living by moving to more affordable areas.

In some cases, people found entrepreneurial work could offer greater pay, Forbes said.

“It helped people realize starting a business in their living room was something that was feasible in a way that under normal times wouldn’t even cross their minds,” he said.

Jessica Rowland, a house painter, saw the number of people remodeling their homes and figured she could hire some help and take advantage of the surge.

Marcus Hulmer decided it was time to launch his own architectural and design company, while keeping his full-time job for steady income.

Before the pandemic, Brian Slater and Phil Clark had decided to take their passion for fishing and start an apparel company. The pandemic, though, had them reimagine the plan for where and how that company would play out.

Pat Lambert, district director and treasurer for Minnesota SCORE, has noticed the wave of new business owners. They have been seeking help through the business education and mentoring nonprofit’s four offices across the state and its more than 350 mentor volunteers.

Most of those new businesses are focused on health care, especially in-home care for assisted living, and life coaching, Lambert said.

Retail and e-commerce-focused companies are also rising, he said, as entrepreneurs find a simpler entry to market with more digital payment systems and online shopping platforms becoming easier to navigate for both business operators and consumers, he said.

The remaining bulk of new clients include people launching cafes and food trucks as workers return to traditional office settings, Lambert said. The majority of entrepreneurs seeking help are women, comprising 60% of clients, he said.

Whether the pandemic made it easier to start businesses or just provided time to pursue a dream, the rise in new businesses is promising for the state’s economy, Lambert said.

But he also offers a caution: Half of new businesses fail at …….

Source: https://www.startribune.com/pandemic-led-to-rise-in-minnesota-entrepreneurship/600156144/

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to Top