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Starting a business in the region

February 25, 2012
By Jim Tate , Marshall Independent

Is it true that it's more difficult to start a business in Minnesota than in surrounding states?

That question gnawed at former 3M executive Alex Cirillo for years. He expressed his opinion to numerous legislators he knew. Those legislators, too, wondered whether the state made it tough on start-up businesses. Soon, the state Legislature authorized money for a study looking into that theory.

How does Southwest Minnesota State University fit into all of this? The student-run Southwest Marketing Advisory Center, housed on campus, was awarded the bid for the study. Approximately 1,825 hours worth of work resulted in a study delivered to, and accepted by, the Legislative Coordinating Commission recently.

Three universities submitted Request for Proposal bids - SMSU, the University of Minnesota Carlson School of Management and the Minnesota State University, Mankato. SMSU's bid was $45,000.

"It was the biggest study the Center has done so far," said Taylor Voss, one of five students assigned to the study.

SMAC is a student-run marketing business. It was established to give SMSU students hands-on marketing experience while filling a business void in the region.

Samantha Eicke, the managing director of SMAC, oversaw the project and kept it moving along. Mike Rich, marketing professor, is the executive director of SMAC.

"We decided to run a dual study," said Rich.

The first part of the study was to survey businesses that had started up since 1985 in the states of Minnesota, North Dakota, South Dakota, Iowa and Wisconsin.

The SMAC purchased the mailing list from a marketing group, said Eicke. The survey was also available online. Their return rate was 4.7 percent, or 841 surveys.

"Three percent is normal, so we were happy with that," said Eicke.

The second part of the study was assigning a state to the five students and having them do their own research about how difficult it is to get information from each state regarding questions a typical start-up businessperson might ask.

"We set up guidelines on (rating) the difficulty in getting information," said Rich.

Data from the printed surveys and the student research was then compiled, and states were ranked, from easiest to start a business, to most difficult.

The printed surveys that were returned showed that South Dakota was the easiest start-up state, followed by North Dakota and Iowa, with Wisconsin and Minnesota tied for the most difficult.

The student research showed that South Dakota was the easiest start-up state, followed by North Dakota, Iowa and Minnesota, with Wisconsin being the hardest.

Voss was assigned South Dakota, and said her research wasn't difficult at all, compared to some of the other states.

"I called three of four different numbers and I'd get Donna every single time. She remembered me, she answered my questions," said Voss, laughing.

The two said that, generally speaking, the less population in a state, the easier it is to start a business.

"It's harder to know what you need with a more populous state," said Voss, a senior marketing major from Avon.

Voss started just as the project got going, in March 2011.

"It was my first job (at the Center) and I didn't know what to expect," she said. "It was good experience for me. I made analysis based on respondents and compared that to what we found out. Analyzing primary data was interesting."

The two had several conference calls to the Legislative Coordinating Commission as well as the Senate committee that authorized the study. They were both appreciative of the fact they could verbalize answers to the questions, rather than simply doing business by e-mail.

Eicke is a marketing and finance double major from Bennington, Neb. As managing director, it's her job to "manage the people, make sure everyone is productive and staying on task," she said. She hopes to find a job in the Omaha area after graduating and feels her real-life marketing experience with SMAC gives her a leg up on other students.

The study and subsequent report all finished now, they can both look with satisfaction at their roles, and know that their efforts may someday help make starting a business in Minnesota easier.



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