Study: St. Cloud Is Minnesota’s Best ‘Small-City’ For Starting A Business

In a town the size of St. Cloud, small businesses seem to come and go on a daily basis. While the stories of businesses closing always make headlines, the fact is there are a lot of small businesses in the area who are alive and thriving.

In general, small businesses fail 35% of the time in the first year and 48% fail during the first five years of operation. Those numbers could climb even higher under the 'new normal' economic situation the country finds itself in.

The folks at WalletHub took a look at over 1,300 small-sized United States cities to find out which are the best of the best when it comes to opening, and operating, a small business.

The studies focused on three categories: Business Environment (length of work week, commute time, average small business growth); Access to Resources (financing accessibility, investor access, higher-education assets) and Business Costs (office-space affordability, labor costs, corporate taxes).

“The benefits of starting a business in a small city include lower overhead costs, stronger relationships with customers and the potential to become a big fish in a little pond. But there are drawbacks, too," said WalletHub analyst Chip Lupo. Entrepreneurs who want to build a large professional network aren’t likely to make as many connections in a town with fewer residents. Other restrictions might include limited industry options, a less diverse customer base, and difficulty attracting and keeping top talent.”

Among the 1,300 or so small-sized cities studied, St. Cloud finished 254th overall, just below Gladstone, Missouri and above Pearl, Mississippi. That ranking of 254th, however, is the best of the Minnesota cities surveyed.

St. Cloud's relatively high ranking was buoyed by a top-50 finish in the "Access to Resources" rank, in which it finished 43rd overall. St. Cloud was ranked first in the entire country when it came to accessible financing as well.

Otherwise, St. Cloud finished in the middle of the pack in Business Environment Rank (638th) and Business Golf Rank (534th).

The best small town to start a small business is St. George, Utah, followed by Fort Myers, Florida; Cedar City, Utah; Washington, Utah and Bozeman, Montana.

Other Minnesota towns to make the list included Moorhead (323rd), Fridley (392nd), Minnetonka (419th), Mankato (460th), Winona (502nd), Eagan (586th) and Andover (1196th).