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Small Business Means Big Bucks in Minnesota

Posted on May 12, 2014 at 1:48 PM
Tags: small businesses

Happy Small Business Week, MinnesotaIn case you entrepreneurs have been too busy taking care of business to notice, this is National Small Business Week.

So, in your honor, the rest of us Minnesotans pooled together and got you something nice: It's the recognition and gratitude you so richly deserve. Go ahead, try it on. Feels good, doesn't it? Yeah, looks good on you, too.

Every year since 1963, the president of the United States has issued a proclamation marking National Small Business Week, which recognizes the critical contributions of America’s small-business owners to our collective economic well-being. 

And with good reason.

More than half of Americans either own or work for a small business. And small businesses create about two out of every three new jobs nationally each year. That's a whole lot of jobs. A whole lot of paychecks. A whole lot of money making the world go around.

The State of Small Business

Small businesses have a big impact right here in Minnesota, too. The federal data are still being updated, so we’ll have to make due with numbers that are somewhat stale. Still, we can get a fairly good picture of the economic benefits statewide. 

Most of Minnesota’s small businesses are pretty small from a staffing point of view. About 76.4 percent have no employees. Of those that do hire full or part-time staff, most have fewer than 20 employees.

Let’s start with firms that have no employees. In 2011, there were more than 387,000 such businesses statewide. These sole proprietors had nearly $16.4 billion in total revenues that year, which works out to more than $42,000 per proprietor.  

Now, let’s talk about companies that hire anywhere from one to 99 workers.

In 2011, there were nearly 141,000 business establishments with fewer than 100 employees, or 97 percent of the state total.   

These small businesses represent the majority of employment in Minnesota, accounting for 1.2 million workers or 52 percent of the state total.  

Minnesota businesses with fewer than 100 employees had a total payroll of $47.2 billion, nearly $38,000 per employee. That accounts for nearly 43 percent of total state payroll.

So, if we combine those employer and non-employer numbers, we’re talking $63.6 billion dollars. A tidy sum.

But that’s not the whole picture. Let’s add the state and local taxes these small businesses pay. Add the supplies and services they buy in their communities and statewide. Add the effect of payrolls as employees spend and invest their earnings.

It’s pretty clear the economic impact of small business in Minnesota is anything but small.

Hail, From the Chief

President Barack Obama shares his thoughts on the contributions and importance of small businesses.

[http://youtu.be/2pL5KucK5Cc]

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