With all the recent sad news of another trough in the steel prices and taconite production of the Iron Range, we are in what feels like another repeat of Groundhog Day for our region: How will we diversify?
In the backdrop of this discussion are emerging, talented entrepreneurs, who are slowly and steadily growing their small businesses. With the very real challenges that come with market uncertainty in steel prices and taconite demand, it’s important to highlight the quiet positives happening across our region.
Below is a sampling of entrepreneurs, growing rapidly and serving markets outside the region who still maintain a commitment to region. Many of these businesses are owned by young professionals and use technology to access outside markets.
Angora, MN: Anna Anderson, Art Unlimited
This family-owned digital marketing company in Cook, MN has grown from a staff of 3 to 15. They provide marketing solutions for different industry segments across the United States, roofing contractors, and home exterior installers are their largest industry served. They have exhibited explosive growth in both revenues and employment.
Duluth, MN: Kyle and Ann Anderson, Northern Wholesale Millwork
Kyle and Ann started their company in 2009 after losing their jobs on the Iron Range due to the closure of a manufacturing plant. Kyle was a plant manager and had run another small business. Seeing opportunity in the marketplace, they built a steady business on custom-milled wood products for homeowners and contractors. They doubled their space in 2015 and added staff to meet demand. Online sales continue to grow and they’ve secured contracts with a variety of Midwest manufacturers to provide quality millwork and other assembled products.
Grand Rapids, MN: Megan Kellin, be.Media, Hotel Rapids, Lake Time Magazine
Returning home to Grand Rapids in 2015 with her husband and two children, Megan brought a burgeoning business with her – a strategic marketing company, be.Media House. In the meantime, she started Lake Time Magazine…which has since brought on two more titles, Lake Bride and Lake Home Magazine, aswell as a parent company, Lake + Co, coming soon. In addition, she and husband purchased a local, historic hotel, Hotel Rapids, which they are currently restoring.
Second-Stage Companies – The research is clear and compelling
Second-stage companies, small businesses that grow revenues above $1 million and up to $50 million, are major job generators. These businesses represent just 13% of all small businesses nationally, but contributed 35% of the job growth from 1995-2013. This same trend holds true in St. Louis County, where they represent 13.7% of all businesses and are the only business category to show job growth from 2012-2013. Research from the Lowe Foundation, SBA and Kauffman Foundation all support the importance of second-stage companies. These companies are typically focused on growth and serve outside markets. This, by definition, represents new diversity to our economy.
Behind second-stage companies is a specific type of entrepreneur, intent on scaling up their business in a smart and strategic way. The Kauffman Foundation showed the biggest determinant in the roughly 5% of businesses who survived beyond $1 million in sales – was their desire to grow and scale.
The good news? We have many of these entrepreneurs here and they are real economic drivers for our future.
The path to $1 million in sales and beyond is full of challenges, setbacks and small triumphs. It’s a lonely pursuit, often more of a vocation, that doesn’t come with a playbook and will challenge many parts of your life – purpose, finances and relationships to name a few. At its very core, the path to scaling up is experiential and one that’s learned by doing.
Cultivating these entrepreneurs takes a long-term view and a regional strategy of support. It’s not only funding a business or launching a program – it’s regional unity. They have needs different from the traditional economic base that may require a tailored approach. Entrepreneurs need access to strong networks of experienced entrepreneurs, patient capital and most importantly, an environment that builds their development as their business grows. They need recognition and respect for the role they play in our regional future.
Let’s celebrate small businesses that grow beyond $1 million in sales and create a regional strategy to scale the growth of entrepreneurship. The launch of this blog is a way to give a voice to the entrepreneurs of our region and connect them with resources to launch, grow and scale with success.
