4 Facts Every Budding Entrepreneur in Minneapolis Should Ask
According to the Small Business Administration (SBA), Minnesota’s small businesses employed over 1 million people in 2015. It may sound positive, but the reality may be a bit darker.
SBA also revealed that, usually, 50% of new businesses don’t survive the first year. This news isn’t to discourage you but to help you prep for the birth pains.
Before you choose an office space in Minneapolis, read these FAQs:
1. What Are the Business Taxes in Minnesota?
Business owners should be ready for an onslaught of taxes to pay. One of these is the sales tax, which is around 6.875%.
It can increase once you include local sales taxes. That’s why entrepreneurs may end up paying as much as 8% of such levy when they are in Minneapolis.
The state, though, uses a term called “nexus” to determine whether you should pay it or not. If you have an office space, Minneapolis, you are more likely to settle such an obligation.
The state also levies a corporate income tax or corporation franchise tax for C-type corporations. These refer to businesses that have separate fees for companies and personal use.
Then there is the minimum fee that partnerships, as well as S- and C-type corporations, have to pay. This amount depends on property value, sales, and wages. If you want to spend less on taxes in the state, it does pay to choose your office space wisely.
2. Is It Easy to Open and Run a Business in the State?
According to data from the Center of the American Experiment, the state is somewhere in between.
When compared with other cities in the United States, Mexico, and Canada, the Land of 10,000 Lakes placed 40th. The report analyzed over 110 metros.
It scored higher than Wisconsin and performed similarly as Iowa. It performed well in three categories:
- Getting electricity
- Resolving insolvency
- Employing workers
Forbes, meanwhile, ranked the state as the fifteenth best place for business. It fared better in quality of life, where it placed third.
Labor supply is also good, which is excellent when you’re ready to scale up. The state also ranked higher than New York, Iowa, California, Illinois, and Michigan.
3. How is the Workforce in Minnesota?
The State Department of Health revealed that over 2.5 million people 16 years old and above already worked in 2014. The percentage of males and females in the workforce is close to 52% and 48%, respectively.
Around 93% of the workers, meanwhile, were from 18 to 64 years old. Less than 5% were 65 years old and above. The government also mentioned that in 2015, the millennial comprised almost 36% of the workforce and 25% of the population.
Meanwhile, about a quarter of the senior citizens are still working in the state, although only 6% of them are at least 75 years old.
4. Is Minnesota’s Economy Growing?
Here’s another reason to open a business and look for office space in Minneapolis: the state’s economy is growing. It increased by 1.9% from 2016 to 2017. It might be lower than the national average. Still, the state never faltered to achieve growth even during the Great Recession.
A significant reason is the diversity of its industries. Some of the flourishing sectors are:
- Agriculture, fishing, and forestry
To succeed in business, you need more than guts and passion. It will help if you learn to take calculated risks and decide based on available information. These FAQs will give you the head-start to do these steps.