Here & Now

Wisconsin's Spike in New Small Businesses

Zac Schultz:

Wisconsin small businesses are doing well, according to a new report from the UW System’s Institute of Business and Entrepreneurship. The study shows nearly 11,000 new establishments were opened in the last year. One of the areas seeing rapid growth is the La Crosse region. We are joined now by Anne Hlavacka, the Wisconsin director of the Small Business Development Center at UW-La Crosse. Thanks for your time today.

Anne Hlavacka:

You’re welcome.

Zac Schultz:

So what kind of growth are you seeing in western Wisconsin?

Anne Hlavacka:

So, I think we are seeing kind of what we are seeing around, generally. There are certainly individuals that I think with the pandemic it caused them to kind of think about what they want to be doing. We certainly have heard the terminology of the so-called “Great Resignation” where I think some individuals in that circumstance are trying to determine is now the right time to be my own boss and start a business? There also are opportunities that we are seeing come up because of just the natural transitions that would have occurred but maybe people reflecting and making the decision that now is the time to maybe sell their business or otherwise transition their business. So, it’s really a combination of different factors I think that are coming into play.

Zac Schultz:

And most of these are small businesses, two to nine employees. Are these bakeries, auto shops? What kind of things are we seeing here? Everything?

Anne Hlavacka:

I do think it’s a little bit of everything. I think, like, small business drives also innovation. So, I think you have people who have found different ways to do something and maybe it’s a new product, a new service. Those type of things are also coming into play. And I think that ends up being helpful.

Zac Schultz:

We saw a lot of money injected into the economy through the Democrats’ COVID response packages, both in individual payments to people and through Governor Evers’ ability to hand out money. How much of that is giving people that initiative to start-up something new?

Anne Hlavacka:

Well, I will say one of the recent steps that we’re taking in the state of Wisconsin was a grant program that provided $10,000 for those that moved into vacant commercial spaces. I think that has kind of regenerated interest even in some of our more rural areas to be able to get individuals into spaces. So, those type of programs, I think, have been helpful to be a catalyst for taking the step to going into business. And startups, I think, have benefited from that. A little bit more than some of the other financial relief that has been out there.

Zac Schultz:

We’re also, on the other hand, seeing an increase in inflation and interest rates are going up. Can that put the brakes on some of this growth?

Anne Hlavacka:

Well, I think the issue of inflation and some of the challenges, interest rates, those do impact how fast companies can grow. What level of debt they might be able to take on to speed growth. I do think those will be factors that are going to come into play. But I also think the pandemic has taught a number of businesses and people to think a little bit differently. So, I think they are evaluating their operational steps a little bit closer to determine where really should they put their emphasis. It’s impacting things like what hours a business may be open. How do they create that synergy with other businesses so as to maximize the benefit for all? And yet, at the same time, be able to control their costs.

Zac Schultz:

Do we know if these are more young people taking that first chance in life or later people a little older trying a new career, trying to strike out on their own?

Anne Hlavacka:

I’d have to say it’s a little bit of everything. We see individuals. I would say some that are — they may be retiring a little bit earlier from their traditional jobs but they are not necessarily looking to just going into retirement. They are looking at what opportunities exist for them. I would say in the middle area, there’s a lot of people that feel like they have the technical know-how and really have been thinking in the back of their minds I’d like to do this. I’d like to be the owner. And so I do think there is that element that is out there. I think those individuals will be positioned potentially for some of the transitional areas, for businesses that the current owners want to sell. And they are in a position to potentially buy those businesses. But I always think youth. I mean that is where a lot of our new ideas come from. So, I’d have to say, we see it all. We serve a seven-county region in western Wisconsin and we are seeing it throughout the region and we’re seeing it in a variety of age groups.

Zac Schultz:

In these last few seconds we have, we are talking about location in western Wisconsin. It’s certainly a beautiful place to live. Are people choosing to find a place and start a business as opposed to the old model of moving to where the jobs are?

Anne Hlavacka:

Well, I think it’s, again, a mix because those businesses that get started in a region also then create that next job. I think that then, sort of in itself, kind of fuels that next round where some day those individuals might choose to continue working but some might choose to start a business. Or buy a business. Or buy the business they joined as an employee. So, I would say the one other area here in western Wisconsin we see a lot of activity is, there is a lot of interest in trying to engage the employee as part of kind of an ownership model. We have more interest in employee-owned or cooperative-type businesses because they really do want the people that participate in gaining the business opportunity to actually benefit from it as well. We oftentimes see people wanting to see how to do that.

Zac Schultz:

All right. We will have to leave it there. Anne from La Crosse, thank you for your time today.

Anne Hlavacka:

You bet. Have great day.