REGIONAL - When Mike Gronski and his family looked to open their own candy store after living in California for 20 years, one town stuck out.

“The year before moving to California I discovered Ely and the Boundary Waters,” said Gronski, who opened Ely’s Old Fashioned Candy last year. “Every year for the next ten years I would fly back from Los Angeles. It’s always been a place I enjoyed. When I didn’t find another place I thought I could call home, I thought of Ely.”

The former Tennis Channel broadcaster always enjoyed small town candy stores and wanted to open his own. Gronski said he tried in California, but it never took off, since most places already had a candy store to call their own.

With a business plan already developed and his town of choice selected, Gronski needed contacts to help make his dream come true. He went to the Chamber of Commerce and began networking with area associations and banks to accomplish what he set out to do.

According to the Small Business Administration, over 600,000 new businesses open in the United States each year and the SBA has a small army of affiliated consultants and lenders working across the country in a wide variety of economic development programs and lending institutions to help dreamers like Gronski open up shop.

“A lot of business owners don’t always understand all of the resources available to them,” said Betsy Olivanti with University of Minnesota- Duluth’s Center for Economic Development. “We come up with plans to get them in touch with what is available.”

Last year Olivanti worked with 100 clients, six of whom have now opened businesses, creating jobs for 100 employees. Bank loans and various grants provided the new business owners an infusion of $4.4 million in working capital.

There is no one-size -fits-all solution when it comes to starting a business in northeastern Minnesota, but there are some easy guidelines to follow.

The first step is to contact the city or local chamber of commerce where you’d like to do business.

“We know how good it is to get started off on the right foot,” Ely Chamber Executive Director Eva Sebesta said. The Ely Chamber offers programming to business owners, both new and seasoned, on marketing, social media and human resources to keep businesses up on the newest ways to keep in touch with their customers and the area workforce.

“When you’re a new business, you want to talk to somebody,” said Don Negley, a business owner and board member with the Entrepreneur Fund. “You need help to see how it all fits together.”

Negley and his wife, Leanne, own Rural Living Environments, an organization in Babbitt and Ely providing services to people who are developmentally-disabled as well as a crisis home for people in a variety of challenging situations. When they started the business about 15 years ago, the Entrepreneur Fund provided loan funding and business coaching. When they expanded their operation to open the crisis home, they turned to the Entrepreneur Fund once again.

While networking with organizations like the Entrepreneur Fund and the local chamber of commerce is important, a trip to city hall is also in order, says Cheri Carter, the clerk and treasurer in Orr. She says you’ll want to be sure that local zoning is consistent with your plans.

Additionally, Carter said, a new business owner needs to make sure there are no special taxes or fees, such as a lodging tax or conditional use permit fee, that would be required from the city or county.

Once those hurdles are cleared, it’s time to look at financing and business planning.

For Gronski, that took the form of a small business loan from a local bank, and for Negley, it was time for a visit to the Entrepreneur Fund.

The Entrepreneur Fund provides small business loans, usually in the form of gap loans where extra money is needed to make up the difference between a mortgage and what an owner already has on hand.

“We network with partners such as city halls, realtors, banks and credit unions,” said Steve Peterson, the Entrepreneur Fund’s business loan officer. “People need a plan. How’s it owned? Who is involved? What are you doing different? Does the idea make sense?”

According to Peterson, 80 percent of businesses who get help succeed, which is a much higher success rate than is typical of small businesses. Aside from aiding in financing and business planning, the Entrepreneur Fund also helps new business owners make contacts in the commercial world.

While the initial steps appear straightforward, there are many bumps on the road that can occur.

Olivanti said new business owners, particularly in small towns with an older commercial building stock, aren’t aware of the work needed to bring an older building up to code.

“There are a lot of barriers for businesses that want to be on Main Street when it comes to overcoming building challenges,” she said. “New roofs, renovations, etc… It’s more than just new paint and a couple of walls.”

At the Ely candy store, this was a problem when the interior of the building needed painting and the exterior needed a new awning.

Most area cities offer low-interest commercial rehabilitation and storefront loans and some grants are also available from organizations such as the IRRRB, especially if the business plans to retrofit heating and lighting to improve energy efficiency.

Trying to find the right hours and location can also be a challenge.

Gronski said he needed to figure out just how many people would pass by his shop, a statistic not available in Ely.

“That was the one issue, ‘how many people are going to walk by my store front?’” he said. “I had to figure it out on my own.”

Ultimately Gronski would use permitting information from the Boundary Waters to see how many people came for that attraction. He also used sales tax data from tourism and lodging to estimate how much money businesses were making.

And once the doors are open, finding people to staff the business can be a major hurdle.

“There is a challenge in finding affordable housing and childcare for employees,” Negley said. “It can really inhibit a business’s ability to grow.”

While those challenges are generally beyond an owner’s ability to control, Negley said more support is needed from local governments to diminish their effect on businesses.

While Gronski said he wasn’t in need of out-of-town help, being a busy tourist town meant even the local high school students were in high demand, with many businesses competing to hire them for the busy season.

Many benefits

Once the hurdles are overcome and the doors are open, the benefits of a new business are wide-ranging.

“There is an added tax base,” Carter said. “It allows more services to be offered by the city and it can keep utility service fees lower for everyone. The more people we get into town, the more all of our businesses benefit.”

Opening a business in the north country also has added benefits for owners and their employees.

“You have small town living without the hassle of a large city,” Carter said.

“We live in this really beautiful area,” Sebesta said. “It’s just minutes from getting off of work to being able to go canoeing, snowshoeing or hiking. Other places can’t offer that. The quality of life is really what draws people up here. For both new businesses and new employees, that is what they are looking for.”

More information on starting a business can be found through UMD at https://ced.d.umn.edu/ or the Entrepreneur Fund at https://www.entrepreneurfund.org/. The Ely Chamber of Commerce can be reached at www.ely.org. Information on Orr can be found at www.cityoforr.com. In Cook, the chamber can be found at www.cookminnesota.com and the Lake Vermilion Chamber can be found at www.lakevermilionchamber.com.