By Renay Dossman
In a July 11 article (“What does the closure of beloved restaurants and music stores mean for small businesses in Minnesota?”), the Department of Employment and Economic Development (DEED) points to “robust” growth, citing that 50% of businesses opened since 2019 were still operating five years later.
But is a 50% five-year survival rate truly good enough for the entrepreneurs who bring life, identity and economic resilience to our communities? We believe that Minnesotans deserve better, and that survival is too low a bar.
These closures are not isolated; they reflect deep issues. Especially for disadvantaged entrepreneurs in low-income neighborhoods, lack of access to traditional banking, government policy shifts, rising rents and lease issues stack the odds against long-term sustainability.
The reality facing small businesses today
Entrepreneurship is on the rise across the country, especially among Black women, who are launching businesses at higher rates than any other group. But opening a business is just the start. Sustaining it in today’s climate is increasingly difficult. And the pressure is only growing.
The good news: Big ideas with big impact
Despite these headwinds, there are bold, effective solutions already underway. When we pair capital with assistance to improve financials, management, marketing and other business practices, small businesses don’t just survive — they grow, hire and lead transformation in their neighborhoods. Two initiatives are audaciously leading the way.
The GroundBreak Coalition, convened by the McKnight Foundation, is working to realign financial systems to create greater access to homeownership, business ownership and development. The state-funded PROMISE Act Grants and Loan Program is investing more than $100 million to support small businesses most affected by economic and social disruption.
These investments are helping businesses hire staff, expand operations and reach new customers, creating a foundation for long-term success. NDC and our community partners are honored to play roles in ensuring these resources reach small businesses in the Twin Cities.
At NDC, even without the additional resources, external studies show that our model has helped entrepreneurs achieve an average 10- year business lifespan and average annual income increases of $20,000-plus for entrepreneurs.
We know this works. And with support from ambitious initiatives like GroundBreak and PROMISE, the potential for impact is even greater.
What’s needed now: A vision for the future
Minnesota is home to a robust ecosystem of entrepreneur support organizations, including 21 Community Development Financial Institutions (CDFIs), that combine capital with hands-on guidance in financing, marketing and business operations.
These organizations are embedded in their communities and trusted by the entrepreneurs they serve.
Yet support for these efforts declined in the most recent legislative session, just when small businesses needed them most.
The path forward requires investing in adaptation: helping small businesses adapt new technologies; protect their data; explore mergers, co-op ownership and growth opportunities, and build workplace cultures that attract and retain great employees.
The state and other supporters must approach small-business development not as charity, but as stratey — and as a foundation for inclusive economic growth.
Success is possible if we match the audacity of our entrepreneurs with equally bold support.
