, President of New Business Minnesota Publishing
Business startups contribute to
A Civic CaucusFocus on CompetitivenessInterview February 7, 2014
Boulay, Dave Broden (vice chair), Pat Davies, Paul Gilje
(coordinator), Randy Johnson, Sallie Kemper, Dan Loritz (chair), Paul
Ostrow, Dana Schroeder, Clarence Shallbetter. By phone: Janis Clay.
One of the biggest reasons new
businesses fail is that they don't have the right advice at the right
time, according to Patrick Boulay, publisher and president of New
Business Minnesota Publishing. In the Twin Cities area alone, there
are about 2,000 new businesses formed every month and Boulay says
those 24,000 new startups invest more than $200 million annually, just
trying to get up and running. He sends the Twin Cities startups a
series of four consecutive issues of New Business Minnesota,
his monthly resource guide. Boulay's clients are the people who pay to
be featured on the cover of the newspaper and in an informational
column inside. His clients are bankers, lawyers, CPAs and others
interested in serving new startup small businesses.
According to Boulay, in 2013 there were
58,000 new startup businesses statewide. These new businesses create
jobs and deserve support. He says government agencies can help startup
small businesses, but lack funding to promote and provide their
programs to a wide audience. He says that collecting more information
about the startups would make the state more receptive to new
businesses. He notes that many new startups are self-employed
independent contractors, since businesses are using more contract
employees. He asserts that the biggest challenge facing small, startup
businesses is the dismissiveness they encounter in the marketplace.
Patrick Boulay is president
and publisher of New Business Minnesota Publishing, which he founded
in 2007. New Business Minnesota is a monthly resource guide
that includes information about starting a business and is delivered
to all new businesses in the Twin Cities area for the four months
immediately after they register with the state of Minnesota. In
addition to publishing New Business Minnesota, Boulay conducts
monthly networking events that bring together startup businesses and
business resources that can help them succeed. Each spring, he puts on
the Small Business Resource Expo.
Previously, Boulay spent 21 years with
Finance and Commerce, where he launched the newspaper's first news
department and helped create Minnesota Lawyer and the St.
Paul Legal Ledger Capitol Report. Prior to that, he was editor of
the Minnesota Real Estate Journal for two years, the
Shakopee Valley News for three years, Southwest Suburban
Publishing for three years and a reporter for the San Antonio Light
for two years.
Boulay attended St. John's University and
the University of Minnesota, where he earned a B.A. degree, majoring
in music theory and composition.
Issues to address:
Prior to the discussion with
the Civic Caucus, Boulay was asked to be prepared to address the
following issues: why we should care about new startups; the role of
business incentives; what difference clusters of similar businesses
make to startups; how big a factor Minnesota's workforce is to
entrepreneurs starting new businesses here; whether physical access is
important to any of the new businesses; how the rapid change in
technology is driving change in startups; where new startups are
found; whether there are success stories to tell; and who the
advertisers and sponsors for his business are.
One of the biggest reasons new businesses fail is that they don't have
the right advice at the right time.
Patrick Boulay said one reason he started
his business is that he'd seen a need for information among new small
businesses. His model is to contact new businesses right after they
launch and introduce them to the things they need to know.
Boulay said some people say the biggest
reason new businesses fail is because they don't have enough capital.
"I would argue that the main reason is that they didn't get the right
advice at the right time," he said. "They probably wouldn't have
borrowed money in the first place and gotten in over their heads, if
they'd had a CPA telling them, 'You should probably just buy a used
truck and get by on the cheap for now. Don't sign a long-term lease.
Have an office at your house.' Someone needs to tell people, 'Rein it
in a little bit.' Someone has to challenge them."
Boulay came up with the idea of New
Business Minnesota, a newspaper aimed at new businesses.
"There's no way to talk to these new businesses electronically," he
said. "The state does not sell e-mails or phone numbers." The state
can supply mailing addresses of new businesses, so Boulay mails his
newspaper directly to the new businesses.
There are about 2,000 new businesses formed
every month in the Twin Cities area. Each registers as a business
entity with the Minnesota Secretary of State's office. Using that
list, Boulay sends a series of four consecutive monthly issues of
New Business Minnesota to every new business in the Twin Cities
area. "A lot of startups don't have a resource," he said. "They don't
know what they don't know."
Boulay said he drops the new businesses from
his mailing list after four months. "I change my readers, not my
content," he said. When he drops the businesses, he invites them to
join his networking group, which has 3,500 members, and puts on themed
workshops with presenters featured in a recent issue on that theme.
"It's really, really important that people connect," he said.
The photos of people on the front page of
the newspaper and an inside featured write-up about those people do
change, however. The people featured in those photos and write-ups are
new-business resources like attorneys, CPAs and other advisors. They
are paid sponsors of the newspaper and are interested in engaging new
businesses. The marketing package they buy includes their photo on the
cover, a column on the inside, an opportunity to present at a workshop
and other marketing benefits. Boulay said those people and others who
advertise in his newspaper are actually his clients, while his
audience is Minnesota people starting Minnesota businesses.
"My clients are those who value new
businesses," he said. The clients pay him and he said he helps them
present their information in an "informational column" in the
newspaper. He said he looks for people who need help with marketing
and helps market them to new businesses. "I do a lot of ghostwriting
for my clients," he said.
Government agencies offer help to startup
small businesses, but lack funding to make their programs widely
available. Boulay said the Small Business Administration (SBA),
Small Business Development Centers and the
Minnesota Department of Employment and Economic Development (DEED)
could serve many more startups and struggling small businesses, if
they had the funding to do so.
Studies show that startups are hiring fewer
people early on than they used to. Boulay said they might start
with two employees, instead of six, because they can buy, for example,
bookkeeping services, rather than hire a bookkeeper.
Collaborative work environments where a
variety of small businesses, many of them one-person businesses, work
in the same space can be helpful to new startups. There may be
people in that same location who can help them with graphic design,
legal services or other needs.
The federal government does not count new
businesses until they have at least one employee. So, if you are a
sole proprietor without an employee, Boulay said, the federal
government does not count you as a business. "You don't exist," he
said. And he noted that the SBA considers any business with fewer than
500 employees a small business.
The 58,000 new startup businesses in
Minnesota in 2013 are creating jobs and deserve support. An
interviewer asked if there is an argument for investing more in new
startup businesses than in trying to get companies like Shutterfly to
move to Minnesota. Boulay said new businesses are creating jobs. "You
can spend a lot of resources trying to bring in someone who will hire
1,000 people," he said. But there were 55,000 new business filings in
Minnesota in 2010, 60,000 in 2012 and 58,000 in 2013, he said.
"We know that about half of the startups
will be around in five years," he said. "What can we do to make that
figure become 53 percent? How hard can it be to get another 1,000
businesses doing better, especially when some of them just need a
little professional guidance?"
More information would help make Minnesota
more receptive to startup businesses. An interviewer asked what
should be done to make Minnesota more receptive to new businesses.
Boulay responded that we need information. There are no local numbers
on the breakdown in new businesses according to whether their owners
are women or African American or Hispanic or veterans. About 50
percent of all the new businesses probably fit in those categories, he
said. "Each one of them is eligible for special training and for
certification to get contracts from the government," he said. "They're
not being told all that."
Boulay said it would be much easier if, when
new businesses register with the Secretary of State, they could
indicate if they are retail businesses, in-home businesses, working
out of an office, planning to hire any employees in the next year,
etc. "Now you start getting an idea of what you're dealing with," he
An interviewer asked what the local
impediments are and to what extent cities, especially larger cities,
can make it easier for new businesses. Boulay said cities will never
have contact with 95 percent of the businesses that start up in their
communities. "They're not getting a permit," he said. "They're working
out of their home or renting space from someone else. Cities are
limited in how much they can do," he said.
Each month, Boulay selects 2,000 new
businesses in the seven-county metro area to start receiving his
resource guide. In December 2013, for example, the mailing list
included 586 filings in Minneapolis, 352 in St. Paul, 81 in
Bloomington, 69 in Eden Prairie and 60 in Edina. New Business
Minnesota's "curriculum" is mailed to 8,000 businesses each month.
For 2,000, it will be their first issue. For the balance, it will be
their second, third or final issue.
New startups in the Twin Cities area invest
more than $200 million each year trying to get started. "The
number of venture capital and angel investor deals are just a tiny,
small sliver of everything," Boulay said. "Every year, 24,000 people
are trying to start new businesses in the Twin Cities area. That $200
million is not ongoing expense; it's their investment. That's a huge
sum of money."
He likened the new businesses to newly
hatched turtles scrambling across a tropical beach, trying to avoid
being picked off by predators, as they struggle to reach the water,
where they will find the resources they need to survive. "If they
can't get off the beach, they won't survive," he said.
Boulay said no one else is reaching so many
new businesses with the kind of information he provides. He has
reached more than 150,000 new businesses since he started his business
in 2007. An interviewer asked about DEED's small business office. "I
don't bump into DEED at all in the networking circles I move in,"
Boulay responded. He said he doesn't think the state is geared to
working with a large number of businesses. "At this point, that's not
their mission," he said.
A lot of new small businesses are
self-employed independent contractors, since businesses are using more
contract employees. He said someone who is laid off at age 55 has
some advantages over young people in starting a new business, such as
possible equity in a house, a healthy 401k and a lifetime of
experiences. "What they don't know is how to market themselves," he
The biggest challenge facing small, startup
businesses is the dismissiveness they encounter in the marketplace.
Boulay said they encounter accounting or law firms that don't want
to work with them because they are new or too small, a government that
barely acknowledges they exist, potential clients who don't want to
give them a chance or banks that have little interest in lending to
"Through New Business Minnesota, I
introduce them to the resources that are committed to working with
them and open to discussing their business plans and meeting with them
face to face," he said. Business start-ups contribute to Minnesota's
competitive economy and should not be overlooked when assessing the
strengths of the state's business community.
The Civic Caucus
is a non-partisan,
tax-exempt educational organization. The Interview Group
includes persons of varying political persuasions,
reflecting years of leadership in politics and
business. Click here
to see a short personal background of each.
S. Adams, David Broden, Audrey Clay, Janis Clay, Pat Davies, Bill
Frenzel, Paul Gilje (coordinator), Randy Johnson, Sallie Kemper, Ted
Kolderie, Dan Loritz (chair),
Tim McDonald, Bruce Mooty, John Mooty, Jim Olson, Paul Ostrow, Wayne
Popham, Dana Schroeder, Clarence Shallbetter, and Fred Zimmerman