Wisconsin had the second-best 10-year small business survival rate over the past decade.

Wisconsin had the second-best 10-year small business survival rate in the nation over the past decade. Only Iowa ranked better.

That’s according to a recent analysis by Alabama-based South Bank Financial Institution, which looked at data from the U.S. Bureau of Labor Statistics to compare state-by-state business survival rates from March 2012 to 2022.

In the year Of Wisconsin’s 8,199 private-sector businesses that opened in the 12 months ending in March 2012, 43 percent — or 3,523 — were still operating a decade later, according to data from the Bureau of Labor Statistics. And those surviving businesses grew by an average of 4.5 employees to 10.7 employees each.

The state’s 10-year small business survival rates have remained stable over time. For example, 42.2 percent of businesses that opened in the 12-month period ending in March 1994 were still open in 2004, but only 19.7 percent were still open in 2022, according to the Bureau of Labor Statistics.

According to Southern Bank, the survival rate of a small business decreases the longer a small business is in operation. After the first year, 80 percent of small businesses nationwide remain in business. This drops to about 50 percent in the fifth year of business.

Missy Hughes, CEO of the Wisconsin Economic Development Corporation, said the slow pace of recovery is largely due to financial constraints.

Many businesses have a “nest egg” in the first year, which helps them get funding to grow and operate their company, she said.

“In two, three (and) four years, you really need your business to be self-sustaining and successful because you’ve used that nest egg,” Hughes said.

Hughes said one of the reasons Wisconsin ranks near the top when it comes to 10-year small business survival is the support structure surrounding the state’s small business community.

“Wisconsin has a very active support system for our small businesses,” she said. “Whether it’s our small business centers or our local chambers of commerce, we have an action plan to help our small businesses survive.”

Community service is the key to Oshkosh business longevity

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One Wisconsin business that knows a thing or two about longevity is Planet Perk, a coffee shop in City Center, Oshkosh. Ken Osmond, who opened in the current location in 2000, bought the business in 2008.

Osmond said competing with national chains like Starbucks and Dunkin’ Donuts has been one of the biggest obstacles in his 15 years of ownership. He said that has become a big challenge since the epidemic.

“Year-on-year since Covid, we’re seeing 50 percent more franchise and chain startups every year,” he said. “With that increased competition, you have to find a way to differentiate yourself in a way that those corporate entities can’t.”

Osmond said Planet Perk does this through community service efforts. In the first days of the outbreak, Planet Perk provided an estimated 70 tons of free food to needy families, he said.

“We decided a long time ago to be a conduit for doing good for the community. That’s our business profile,” Osmond said.

That sense of service is at the new expansion center that the business plans for July called “Planet Purk Club”. The club is adjacent to the downtown Oshkosh area of ​​business and will have five private offices, two conference rooms and a cat lounge. The cat salon cares for nine to 15 adoptable cats from a local humane society.

Osmond and his staff will be trained by the Humane Society to properly care for the animals. No food is allowed in the cat salon, and the coffee shop’s daily routine will not change, he said.

“I learned that the Oshkosh Area Humane Society is running out of space for cats,” Osmond said. “I thought, most co-op spaces are lifeless and impersonal. Why not add something to create a calming environment for the cats and at the same time help the humane community in the Oshkosh area?”

That’s just one example of how small businesses can help enrich Wisconsin communities, but Hughes said there are countless others. In fact, studies show that two-thirds of every dollar spent by small businesses stays in local communities.

“When we look at our downtowns, we see vibrant places where people gather, whether it’s in a coffee shop or going downtown to buy gifts for a birthday party,” Hughes said. “Being able to do that in your community is part of the reason we all live in Wisconsin.”