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Douglas County ranked 5th best in state for small businesses

"Small businesses are the foundation of our community," Nicole Fernholz, executive director for Alexandria Area Economic Development Commission.

EP Douglas County

DOUGLAS COUNTY β€” A 2022 study by SmartAsset found that Douglas County ranked fifth best county in Minnesota for small business owners and 990th on the National level.

The study used five factors to determine the results:

  • Proportion of people in a county with small business income β€” 11.68%
  • Small business returns β€” 24.55%
  • Reported business income tax β€” $9,324
  • Five year change of small business tax returns index β€” 46.10
  • Five year change of small business income index β€” 7.52

"These five factors were then indexed and equally weighted to yield our Small Business Index," says the study. "Places with the highest Small Business Index are the places which ranked the highest in the study."
Douglas County has an index of 49.71. The highest β€” Cook County β€” had 53.70. Pope County came in second at 50.45

The study says income taxes play a major role to determine the financial success of the business because the owners pay income tax on profits rather than the business itself paying the tax. Tax burdens were determined by using the national median household income and then applying relevant deductions and exemptions before calculating local, state and federal income taxes.

Nicole Fernholz, executive director for Alexandria Area Economic Development Commission, says, according to the Small Business Association (SBA), a small business is a company with less than 500 employees.

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"Most of our companies in Douglas County meet that standard, so we tend to consider all of them small businesses. However, over half of our companies have less than five employees," Fernholz said in an email and added that there are over 2,000 verified businesses in Douglas County. "99% of our businesses have less than 99 employees. 83% of our companies have fewer than 20 employees."

FernholzNicole17.jpg
Nicole Fernholz

Fernholz says there has been a recent uptick in new business applicants. In 2021, there were 317. Prior to that, the average was less than 250 a year.

"Small businesses are the foundation of our community. It’s not only the jobs that are created and the goods/services they provide, but it’s also the impact they have on other community events," She said. "Small businesses are the sponsors of local schools, charities, youth sports teams."

She attributes the community's growth to the local businesses.

When asked why she thought Douglas County was ranked in the top five best counties for small businesses in Minnesota, Fernholz said that the county has a diversity of industries with manufacturing, retail, healthcare, tourism and education as the top job drivers. However, retail trade is the dominant business type in the county followed by construction, professional services, leisure and hospitality.

"The services our local companies provide only solidify that we are a regional center; people come here for their healthcare, and while here, they do some shopping and eating. They may plan a vacation and spend the week. Many of the businesses benefit other businesses and it leads to a favorable climate for small businesses," she said.

Fernholz said those considering starting their own business in the area should visit livingalexarea.org to learn about its free business coaching and support services.

Thalen Zimmerman of Alexandria joined the Echo Press team as a full-time reporter in Aug. 2021, after graduating from Bemidji State University with a bachelor of science degree in mass communication in May of 2021.
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