Why Does It Matter?
Bad information leads to bad policy. We need to have consistent
definitions and consistent methodology to make informed policy .
It is not helpful when we have conflicting reports; one labeling
Minnesota a failure in creating new businesses, and one saying we are
breaking records for creating new businesses.
Conflicting Schools of Thought
1) Anyone engaging in business activities -- whether full-time or
part-time, at the industrial park or the garage, in addition
to another job or not -- should be counted as a business.
2) The census bureau's non-employer statistics over other sources --
the census only counts people who reported self-employment
(Schedule C) income of more than $1,000, possibly weeding out
some side-workers who pay self-employment income tax but do
not operate independent businesses.
Adopt the Broader Definition of Business
“The problem with ambiguous definitions of what counts as a
small business is that they may make it more difficult for
policymakers to really understand and address the unique
problems that businesses of different sizes are confronted
-- Tracy Clark, associate director, W. P. Carey School's Spirit of Enterprise Center,
Arizona State University
Who Helps New Businesses Now
• SBA – SCORE Volunteer Mentor Program.
• SBA – DEED – Small Business Development Centers
• Education Institutions Offering Entrepreneurship Programs Such
as Dakota County Technical College.
• Workforce Training Centers.
Most VCs like to invest in ventures after the potential has been proven and the
risk reduced. In the first quarter of 2012,
only 3 percent of VC funding went to start-ups.
Typically Averages $243 Million Invested in 37 Deals Per Year.
$24 Million State Job Creation Fund?
To qualify, a business must:
• Invest at least $500,000 in real property improvements.
• Create 10 new full time permanent positions within two years.
• Have other location options outside of Minnesota.
• Cause no undue harm to Minnesota business competitors.
A New Model to Support Emerging Businesses
• Emulate the Legal Profession’s Pro Bono Initiative
• Harness Business Professionals Already Committed to Service
• Acknowledge that Sole Proprietors, Freelancers, Consultants, etc.,
Are Actually Businesses.
• Drop the “It’s not a real business” attitude.
Start Collecting Data
When a business registers ask:
• SIC Code?
• Plans to Hire?
• Full-Time or Part-Time Venture?
• Full income or supplemental?
• Interested in Mentorship?
• Need Assistance of Business Professional?
What Can Chambers Do?
• Identify Members that Are Willing to Mentor.
• Welcome Startups to All Events.
• Offer 1 Year Membership at No Cost.
• Offer Networking Training.
• Help Members Develop Pricing For Startups.
• Make Chambers The Place Where Entrepreneurs / New Businesses Can Turn
to for Help.
• Help Lobby the Legislature to Appropriately Fund Current Programs that
Need Help In Reaching Their Client Base.
New Business Survival Rates
• Year One – 85%
• Year Two – 70%
• Year Three – 62%
• Year Four – 55%
• Year Five – 50%
• Year 10 – 30%