Wisconsin’s 10-year survival rate for small businesses was the second highest in the nation in the past decade. Only Iowa got a better ranking.
according to it Recent Analysis by Southern Bank CompanyAlabama-based financial institutions compared business survival rates by state from March 2012 to the same month in 2022, referring to data from the U.S. Bureau of Labor Statistics.
Of the 8,199 Wisconsin private companies that opened in the 12 months to March 2012, 43 percent (3,523) were still in business ten years later. Bureau of Labor Statistics data shows:. And the number of employees in the surviving companies each went from an average of 4.5 to he 10.7.
Ten-year survival rates for small businesses in the state have remained fairly stable over the long term. For example, according to the Bureau of Labor Statistics, 42.2% of businesses that opened in the 12 months ending March 1994 were still open in 2004, but only 19.7% were open by 2022. stayed.
Small business survival rates tend to decline the longer they’ve been in business, according to Southern Bank Company. After his first year, about 80 percent of small businesses across the country remain open. It drops to about 50% by the fifth year of operation.
Missy Hughes, CEO of the Wisconsin Economic Development Corporation, said the decline in survival over time is largely due to financial limitations.
He said many companies have a “homecoming” in their first year, which helps generate the money to get the company up and running.
“By the second, third and fourth year, you’ve run out of eggs in the nest, and you really need your business to be self-sustaining and successful,” Hughes said.
Hughes said one of the reasons Wisconsin may be near the top for 10-year small business survival rates is because of the state’s small business community-centric support structure.
“Wisconsin has a very active support system for small businesses,” she said. “Whether we are a small business development center or a local chamber of commerce, we take a hands-on approach to helping small businesses survive.”
Community service is key to business longevity in Oshkosh
One Wisconsin business that knows a lot about longevity is Planet Park at City Center, a coffeehouse in Oshkosh. It opened at its current location in 2000. Ken Osmond acquired this business in his 2008.
Osmond said competition from national chains such as Starbucks and Dunkin’ Donuts was one of the biggest obstacles in his 15 years as owner. Since the pandemic, that has become an even bigger challenge, he says.
“Franchisor and chain startups have increased by about 50% each year since COVID-19,” he said. “As competition intensifies, companies must find ways to differentiate themselves in ways others cannot.”
Osmond said Planet Perk does it through its community service efforts. early in the pandemiche said, Planet Park delivered an estimated 70 tons of free meals to poor families.
“We decided a long time ago to be a conduit for the community to do good, and that’s kind of our business profile,” Osmond said.
The spirit of service is at the heart of the new expansion of the business It is planned for July under the title “The Planet Purrrk Club”. The club is adjacent to downtown Oshkosh and features five private offices, two meeting rooms and a cat lounge. The cat lounge houses 9-15 cats adopted from the local humane society.
Osmond and his staff will be trained in proper animal care by the Humane Society. No food is allowed in the cat lounge, and the coffee shop’s daily routine will remain the same, he said.
“We learned that the Oshkosh Community Humane Society is running out of room for cats,” Osmond said. “I thought, ‘Most coworking spaces are lifeless and impersonal. Why not add a cat to create a calming environment and at the same time support the humanitarian association in the Oshkosh area?'”
This is just one example of how small businesses can enrich Wisconsin communities, but there are countless others, Hughes said. In fact, research has shown that roughly: Two-thirds of SME spending stays in local communities.
“When you look downtown, there really are vibrant places where people gather, whether it’s coffee shops or going downtown to buy gifts for a birthday party,” Hughes said. “Being able to do that in your community is part of why we all live in Wisconsin.”