Problems With Starting Your Own Small Businesses in Minnesota
If starting a Minnesota business is your dream, you need to be careful it doesn't turn into a nightmare. New business owners face plenty of challenges, from paying the taxes to paying the bills. The problems aren't insurmountable, however, and Minnesota offers compensating advantages that can help your business succeed.
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Taxes
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Out of all 50 states, the Tax Foundation ranks Minnesota as No. 43, seven from the bottom, for the business tax burden it imposes. The foundation states online that it bases this on the state's corporate taxes, income taxes, sales tax, unemployment insurance tax, and real estate taxes. Among the neighboring states, Wisconsin ranks 40th and South Dakota is best in the country. The Tax Foundation states that Minnesota's taxes on individuals as well as businesses have been well above average for three decades.
Weather
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Minnesota is cold. The temperature will drop below freezing each winter, the Winter Hazard Awareness Info website states, and snow and blizzards are common. Snow and ice on the roads can interfere with deliveries; ice on power lines and transformers can result in power outages; the cost of heating your office or factory will be more expensive than further south. If you're looking to attract employees from outside the state, the thought of long, cold winters may discourage them from signing up. During the spring and summer, heavy thunderstorms are common. These can occasionally produce damaging winds, lightning or hail.
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Finances
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Raising money is important for any small business. According to "Kiplinger" magazine, you should overestimate the amount of money you'll need in the first year, and work to raise at least that much before you open your doors. You should also have a personal savings cushion so that you don't have to depend on your business for a salary the first few months. If you're having trouble raising money, a number of state organizations, such as the Northwest Minnesota Foundation, offer grants and loans to small businesses.
Advantages
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Opening a business in Minnesota also offers you some advantages. The Minneapolis Regional Chamber of Commerce states that 19 of the Fortune 500 companies -- the 500 biggest American companies, ranked by revenue -- are based in Minneapolis and St. Paul. The Twin Cities and the state also have an educated work force where the number of workers with high school diplomas and college degrees is well above the national average.
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