The Worst Small City To Start A Business Right Now In Minnesota

Experts believe that opening a business in a small city can offer several strategic advantages, ranging from financial savings to deeper community integration. 

Financial and operational advantages can include lower overhead costs, reduced labor costs, and government incentives, with many local governments in smaller cities actively recruiting new businesses by offering subsidized rent, tax breaks, grants, and low-interest loans to foster economic growth.

However, not all small cities are created equal when it comes to being great places to start a business. Recently, a study was done to find the best and worst places in America for new businesses, and no small city in Minnesota cracked the Top 300.

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Finding The Best and Worst Small Cities To Start A Business

To determine the best small and worst cities in America in which to start a business, WalletHub compared 1,334 cities across three key dimensions:

1. Business Environment
2. Access to Resources
3. Business Costs.

For its sample, they chose cities with populations of between 25,000 and 100,000 residents. Also, “City” refers to the city proper and excludes the surrounding metro area.

Next, an evaluation was done of each of the three key dimensions using 18 relevant metrics, such as average growth in the number of small businesses, average revenue per business, labor costs, job growth, and more.

Each metric was graded on a 100-point scale, with a score of 100 representing the most favorable conditions for launching a business. They then determined each city’s weighted average across all metrics to calculate its overall score and used the resulting scores to rank-order our sample.

The Worst Small City In Minnesota To Start A Business

While no small Minnesota city was able to crack into the top 300, with St. Cloud faring the best at #313, one city ranked near the bottom of all the 1,334 cities analyzed.

Coming in at #1,274 was Andover, Minnesota, with a total score of 36.83. For comparison, the worst city in this study was Pacifica, California, with a total score of 30.18. The best small city to open a business right now is St. George, Utah, with a total score of 64.62.

Of course, this study only focused on opening a new business and does not reflect the overall quality of the city of Andover, located north of the Twin Cities. It's widely considered a safe, high-quality, and fast-growing suburb, particularly for families.

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Andover boasts top-rated schools (Anoka-Hennepin district), a quiet, semi-rural atmosphere, and a high median income of roughly $125,000.