Twin Cities small businesses growing faster than peers, but harder hit by labor shortage

Small businesses across Minneapolis and St. Paul grew more than in other cities, despite being significantly challenged by a dearth of skilled workers, according to a survey released this week by U.S. Bank.

The study, of 1,600 small businesses and 1,000 employees in the Twin Cities, Phoenix, Los Angeles and Charlotte, N.C. , found 91% of local small businesses surveyed here reported growth, compared with 73% of firms in the other cities.

“We saw both a much higher level of optimism compared to the rest of the country,” said Shruti Patel, U.S. Bank’s chief product officer for business banking. “Almost 93% of the businesses surveyed in Twin Cities viewed their businesses as successful and have experienced growth over the past year.”

Bryce Quinn, co-owner of the popular St. Paul based Cafe Latte and Bread & Chocolate stores, said business has been good.

“Our year is up over last year, which was a good year for us,” he said. “Prices have held pretty steady, so we are hopefully in a good spot for the rest of this year.”

While good news, most of the small companies U.S. Bank surveyed in the Twin Cities also reported significant stressors that made it harder to grow and operate profitably.

About 55% said limited worker skills and big training needs were among their top issues, compared with 34% of small firms nationwide.

“Those two stressors were more acute in the Minneapolis Twin Cities study than the rest of the country,” Patel said.