December 2010 Archives

Car Wash in December?

I recieved an email last week from a lady way up on (southside) the Canadian border who had spoken with a couple EDAs who have had MAPs done. Thus she was interested in business related regional information specifically for Car Washes (NAICS 81119208) similar to the MAP data. Educators have access to Reference USA via Macgrath Libary and can give a (not fully accurate) firm list by NAICS ( Choosing 'summary data' for the area, I was able to send her an Excel firm list once she described an area by zips/counties. (Along with the demographic report from the GIS, this can be carved out also from

There have been a couple of individuals in northwest MN now who have contacted their local EDA (who has recieved a Market Area Profile from Extension) and subsequently given me a call for industry specific information to possibly open businesses (such as used car lots, bakeries, wood stoves and now car washes). While there are online clearing houses such as,, or most of the info is national with possibly statewide attention. Trade association newsletters can help, but often are regional in nature (i.e. Heartland Carwash Association out of Iowa). If you have any ideas of trends/data to capture within a rural county a particular NAICS like car washes, please post references to them in the comments on this blog as any bit will help and can be forwarded by email to these interested entrepreneurs!

UMC Entreprenuer Center

I spoke today with one of the instructors and the dept. head who wrote the large Department of Education grant for the new " CRES" center. It allows students to assist in applied technical assistance for businesses a step above SBCD level; now that the businesses are started, how do you make them run? Kevin Cooper is one of the two MBAs who assists the students' placement, and keep an open ear of what EDAs and businesses need help with. (He sees the applied aspect as a win for businesses as well as students).

It is to shape up in detail and will offer helps to those who start businesses, get them off the ground, and often move onto other ventures to launch. Word has gotten to the UMC EDA center of requests, yet Jack Geller has referred such assistance requests from individual businesses just down the hall in the Business Dept. at UMC.

Iron Range Report Available Online!

As some of you know, last summer I worked with Adam Pine and five students from UMD's Department of Urban and Regional Studies on a research report about population migration and quality of life in several communities on Minnesota's Iron Range. I'm pleased to announce that it has been completed and posted on the department's website at:
So far the report has been useful for several organizations on the Range and we've been getting very positive feedback from those that have checked it out. Feel free to have a gander when you have an opportunity.

Economic Census Update

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At a recent Market Area Profile workshop in West Central MN, I was presenting results of a retail gap analysis done with 2002 economic census numbers (adjusted for inflation). Although I defended the results based on this dated information to some degree with the notion that consumption patterns do not change greatly over time, really the participants were right in looking for the most up to date information.

Luckily, 2007 Economic Census results were released this summer and provide a great view into the changing consumption patterns of the american public and the relative importance of american industries. You can access a quick look into the economic census results through their "Industry Snapshots":
View image

How has the per capita spending on used cars changed from 2002 to 2007? Are there more newsstands in 2007 than 2002? The answer is "no." Hopefully this goes beyond simple trivia about different industries, but instead becomes a quick resource we can share with those private businesses looking for some basic benchmarks or community members looking for some basic information on what's viable in their community. We'd rather our businesses and communities not invest in today's equivalent of a buggy whip plant, but those industries and store formats which will remain a viable part of today's economy.

What do you do with old school?


Way up here near the edge of the earth (Canada), there is a small town of several hundred named Kennedy. They have an old K-12 school (built in the 1950's) that like many in rural Minnesota in the 1980's was consolidated. It had been sitting dormant until this year, when the city decided to use it as a "green" business incubator. With some grant help from USDA, they have created plans to put in a wind turbine related business in the old school shop. The city office has moved in to the old school main office (where the secretary would collect your lunch money or written excuse for being late to class.....)

A small operating turbine can be seen as you pull up to the south side of the school as part of the project is to make the building "green" itself. It is now utilizing geothermal heating, and another UM person from the Clean Energy Resource Team walked through to see attempts to make it more energy efficient. Oil usage has been 28,000 gallons per year, which with the current price of $3.21/gal for #1 grade and $2.89/gal for #2 grade, you can figure it would take around $80K a year to currently heat. Pretty expensive for heating alone. Geothermal pumps will pull Kilowatt hours of electricity, yet depending on the system may cut costs by quite a bit. Some defunct schools within 100 miles of Crookston around here have brought in businesses such as assisted living halls, quick-stores, cafes, post offices, city halls, police stations, etc... Economic Develpment can be a recycling of past infrastructure to grow future oriented businesses!

Economic Impact Analysis, The Right Tool for the Job

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New Technology Infrastructure; What is the Economic Impact?
By David A. Nelson
December 1, 2010

So it's been seventy years since the first electrical infrastructure installation in your County. Sixty years since the first telephone install. Thirty years since the cable tv was brought to the doorstep. Have you ever wondered what it would be like to try and install a similar, ubiquitous infrastructure in today's economy? Take a look at the economic impact of installing fiber-optic service to every home, farm, and business entity in Progresstown.
This Economic Impact Analysis focuses on the installation and operation of a technology utility. The utility delivers the "big three" to the front door including telephone, television, and internet. The labor requirement for excavation and construction of the lines are captured. The expenditures for lines, buildings, computers, and vehicle are captured. The daily operations of the IT services over its forty year life expectancy are captured.
On-the-other-hand Economic Impact Analysis is not the appropriate analytical tool for measuring the net impact or change in operations for the business, household, or farm. These collateral benefits are definite and significant yet incalculable in the IMPLAN model. The local business will expand the customer base online. The local farmer will make direct market contacts with the grain exchange on an hourly or minute-to-minute. Good stuff, just not part of the economic impact formula.
When a community is seeking information to make an informed economic development decision; the economic impact of the venture is second only to the feasibility study in terms of managing expectations and prudently caring for public resources.

In a 2010 study conducted by University of Minnesota Extension examining the economic impact of a proposed new Fiber-To-The-Home (FTTH) infrastructure to business and residence in Progresstown County, Minnesota it was found that:

• Output in the local economy is predicted to increase by $4,501,629 annually due to the daily operation of the facility/infrastructure.

• Employment in the study area is predicted to increase by 13 full and part time jobs annually due to the daily operation of the facility.

• Labor income in the local economy is predicted to increase by $600,099 annually due to the daily operation of the facility.

• The Telecommunications industry, the Service & Repair of non-residential industry, and the Food Service and Drinking industry will be the industries most significantly impacted due to the operation of the facility.

• Output in the local economy is expected to increase by $25,760,910 for two consecutive years due to construction of the facility/infrastructure.

• Employment in the study area is expected to increase by 288 full and part time jobs for one-two years due to construction of the facility.

• Labor income in the local economy is expected to increase by $10,633,119 for two years due to construction of the facility.

Dan McElroy Takes New Position


With a new governor coming into office, DEED Commissioner Dan McElroy will be taking a new position as the president of Hospitality Minnesota. Hospitality Minnesota is the management entity of the Minnesota Restaurant Association, the Minnesota Lodging Association, and the Minnesota Resort and Campground Association.

McElroy joined Governor Pawlenty's leadership team in 2003 as commissioner of finance and later served as the governor's chief of staff before becoming the Governor's senior adviser on innovation in 2005. He has been the DEED Commissioner since 2007.

McElroy has been interested in many of the offerings of Extension's Community Economics team. There were several occasions when I would run into him at events and he would ask how certain projects were progressing because his staff filled him in on projects that included his staff and Extension. My hope is that our relationship with him can stay strong since Extension offers tourism development programs.

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