Minnesota small businesses have a giant impact on the state’s economy -- they employed 1.2 million people, or 47.9% of the private workforce, in 2014, while providing economic diversity and strengthening community vitality.
But only a fraction of state and local economic development investment dollars are currently spent on supporting and strengthening small businesses. All too many small business leaders face giant barriers in getting their businesses started. Access to credit is a prohibitive barrier for many emerging and growing businesses and hits hardest in our communities that most need the positive economic impact of small businesses. In fact, in 2015 the median income for small business owners with incorporated businesses was $48,241, and for business owners with unincorporated firms, $25,811.A little help in credit can go a long way in helping to get small businesses established, growing, and providing all the great localized impact that we know they have in our communities.
Question #5: Given the economic engine inherent in small business growth for Minnesota, how would you make small business investments a priority for state government, and how would you increase financial assistance for this critical sector of our economy as part of a comprehensive economic development strategy?
To start I would work on health care, broadband, and workforce development. Those issues are not direct financial assistance, but they are important to small business' success. I believe in single payer health care, which would take a serious challenge off of small business owners' plates and balance sheets. Broadband would allow small business owners and potential owners to operate more effectively and access new customer bases. And if we were working harder to develop the programs needed to train students and those transitioning to new fields we'd deliver more efficient employees to small businesses so they could get the job done on day one.
Access to credit is an issue I hear about from many small business owners and prospective owners. I know we'll discuss that in the next section but I would say here that it is a critical part of how we help small business owners create strong communities.
Lastly I'll say that as I travel the state and meet with small business owners, it's their work I see driving the success of our communities and neighborhoods. For every big project bringing in jobs there is a coffee shop, a grocery store, an artist, and a bookstore holding onto them. When we think about our economic development programs and agenda it needs to be geared towards how we help small businesses get off the ground and get through challenging times. I'd like to work together on an agenda that recognizes this challenge and uses the real-life experiences of small business owners to inform how programs can be created or adapted to be more responsive to their needs.
When considering tax policy and economic development policy, Minnesota’s small businesses need to be at the forefront and not an afterthought. All too often large corporations and other powerful interests use their resources to crowd out other interests and push their initiatives, typically to the detriment of Main Street. As governor, I will restore full funding to programs that provide funding to small businesses and that have been cut during recent legislative sessions, like the Minnesota Investment Fund and the Minnesota Job Creation Fund. In addition to funding programs that provide funding to small businesses, a Walz-Flanagan Administration would also seek to lower some of the costs that face small businesses, such as employee healthcare and local property taxes. Tim Pawlenty decimated Local Government Assistance (LGA) funding which has harmed small businesses in Greater Minnesota. By expanding they MinnesotaCare buy-in and restoring LGA funding we know that we can help Minnesota’s small businesses and it workers by lowering the some of the cost of doing business.
The biggest obstacle to small business is an overbearing regulatory system. As governor, I will open Minnesota up for business again by rolling back unnecessary and over-burdensome regulation.
Question #6: What policy solutions could the state consider to create access to more credit and more targeted technical assistance for small business owners, particularly businesses owned by women and people of color?
The state has done some work to support organizations like Women Venture, that help with access to credit and technical assistance. We need to do more, expand the support, and make it consistent and ongoing. Partners like them ensure that financial assistance gets to targeted places our broader programs don't always reach. And they allow for depth and area-specific expertise to develop. In addition, I'd like to push for support for programs at DEED and the OSS that allow staff to be more responsive to needs of small business owners and potential owners. It would be worth a conversation about where organizations like Women Venture or the state's broader programs are getting deep enough, and where additional work needs to be done.
In 2016, Minnesota created the Emerging Entrepreneur Loan Program, which has invested over $1.5 million in loans to businesses owned by minorities, women, veterans, and the disabled, leveraging an additional $9 million for the businesses who were awarded a loan. As governor I would seek to increase funding for this program. I would do likewise for the Indian Business Loan Program. In addition to increasing funding for these DEED programs, I would require each of my commissioners to look for ways their agency can begin addressing racial and gender disparities in contracting and granting programs that relate to small businesses. For example, the Minnesota Department of Agriculture provides Value-Added grants to businesses that utilize and add value to Minnesota agricultural products so I would ask the Commissioner of Agriculture to work with communities of color, indigenous people, and women to examine ways this program can be expanded or altered to provide more funds to historically underserved populations.
Government can help to facilitate better cooperation between our two-year colleges and tech schools and small businesses needing assistance. Additionally, we need to foster an environment friendly to community banks again.
Question #7: There is currently very limited communication between government and small business owners. What ideas do you have for effective outreach to small business owners about the existing and potential new programs available to them under your administration?
Small business owners are by their nature entrepreneurial and short on time. To be of use will mean more assertive outreach and responsiveness.
One of the things I've committed to is working to open at least eight regional offices as part of my administration. These offices would be joined by satellite and traveling locations around Minnesota. The point of the offices is to make the administration accessible and accountable and connected to Minnesotans, and increase the communication and relationship between people and the services they need, questions they have, concerns they want to share, and positions they want to advocate for. My hope is that these offices, and the programs and outreach and engagement efforts they would engage in, would help us close that communication gap by giving people a more local person to talk to, and ensure that staff had a better understanding of the communities they are working in.
That idea is one example of a broader set of thinking I think is important. We have to ensure that Minnesotans see themselves in their government, and that's about being accessible, responsive, and present. The offices can help, but they are just a start and need to be part of our bigger effort to engage and share information with small business owners. In the organizing world we create guides and kits to facilitate local engagement, and in the time we live in efforts like that along with webinars, videos, text support programs, and social media are how we engage with each other. Government needs to have that same attitude and work to involve business owners in fulfilling their needs.
I would require each of the state agencies to develop a strategic outreach and engagement plan at the outset of my term as governor, outlining specific steps for how they would increase communications with all Minnesotans, including communities of color and tribal nations, and others who have not had a seat at the policymaking table. As this relates to the Department of Employment and Economic Development (DEED), I would ask for a specific plan for how they will continuously engage small business owners to proactively address the issues they are facing, especially as the agency is developing its legislative agenda. However, I would also ask DEED to create a Business First Stop program that is targeted towards small businesses. Business First Stop brings all of the state’s resources together to help businesses navigate financing, permitting, and workforce development, and it is time that this program has a dedicated small business effort.
I will always have an open door as governor and will spend time traveling the state and meeting with small business owners and local Chambers of Commerce to both share my ideas with and learn from entrepreneurs.