The Land of a Thousand Lakes has a very diverse economy. Its agricultural sector remains a major part of the state’s economy, ranking sixth in the nation in the value of products sold. From sweet corn, sugar beets and peas to farm-bred turkey. 33 of the top 1000 publicly traded companies such as Target, 3M, Land O’ Lakes and the largest privately-owned company in the United States, Carlson Companies, is headquartered in Minnesota.
According to the Bureau of Labor Statistics, Minnesota has the highest five-year business survival rate in America. This means that businesses in the state, specifically small businesses (SMBs), are thriving. The state administration offers incentives like the angel tax credit, research and development tax credit and opportunity zones to assist entrepreneurs and startups expand or relocate to Minnesota.
Below are some statistics on small businesses in the Gopher state:
- There are 526,350 small businesses in Minnesota that account for 99.5% of all businesses in the state.
- From 2015 to 2020, Minnesota had a business survival rate of 55.3%, meaning over half of the businesses open in 2015 were still open in 2020. This rate is higher than the national average of 5.3%.
- Over 1.3 million people are employed by small businesses across Minnesota and they represent 46.9% of all employees in the state.
- As of April 2020, Minnesota had an employment rate of 8.1%, up from 3.2% in 2019. Part of this is due to the crippling lockdowns due to Covid-19 that forced most businesses to halve their workforce or close down indefinitely.
- Minnesota had over 151,886 workers employed by small businesses in the leisure and hospitality sector or nearly 10% of the state workforce.
- There are 7,363 small businesses in the export businesses in Minnesota. They are responsible for 23.8% of the state’s $21.2 billion worth of export revenue.
- State law requires that every Minnesota LLC designates a Minnesota registered agent that will be available during regular business hours at a physical address within the state.
- Self-employed individuals who run incorporated businesses have an average median income of $52,000 which is $24,000 more than those with unincorporated businesses.
- To form a corporation in Minnesota, you need to file your Articles of Incorporation with the Secretary of State’s office. The filing fee is $135.
- Businesses with fewer than 25 employees and are engaged in the research or development of qualifying high-technology can qualify for up to $1 million in angel tax credits.
- Businesses that build new data or network operation centers of at least 25,000 square feet and invest $30 million or refurbish an existing center of at least 25,000 square feet and invest $50 million qualify for sales tax exemptions for 20 years on computers and servers.
- The top five industries with the largest number of small businesses are:
- Professional, scientific, and technical services (76,133).
- Construction (55,304).
- Retail trade (51,798).
- Real estate and rental and leasing (50,511).
- Health care and social assistance (38,876).
- In 2018 Minnesota banks issued 92,284 loans under $100,000 to small businesses. A total of $1.5 billion.
- The top three industries with the largest share of small business employees are:
- Healthcare and social assistance (216,828).
- Accommodation and food services (151,886).
- Retail trade (117,274).
- To form an LLC in Minnesota, you need to file your Articles of Organisation with the Secretary of State. The filing fee is $135 – $155.