As part of its yearlong project "The State of Small Business," Business News Daily will report on the small business environment in every state in America. In this edition, we asked a few of Nebraska's 168,000 business owners to tell us about the challenges and opportunities of doing business in their state. Here's what they had to say.
Running a small business in Nebraska has many advantages. Small business owners reap the benefits of the state's low cost of living, reputable universities, thriving professional community and friendly locals. However, a lack of demographic diversity can deter small business owners from relocating to the state. Fortunately for entrepreneurs, Omaha's young professional community is committed to fostering inclusive, diverse partnerships.
Business owners really enjoy doing business in the Cornhusker State, where small businesses employ the majority of the state's overall workforce. In fact, small businesses were the source of 391,150 jobs in 2012 — 96.6 percent of all employers in the Cornhusker State, according to data compiled by the U.S. Small Business Administration. [See Business News Daily's complete coverage of The State of Small Business in the U.S.]
State colleges and universities, including the University of Nebraska-Omaha (UNO) and the University of Nebraska-Lincoln (UNL), recognize the importance of teaching young entrepreneurs, even before they start a small business of their own.
"UNO and UNL are stepping up to the plate in terms of taking on entrepreneurship and recognizing their students are budding entrepreneurs," said Julia Parker, executive director of the Omaha Small Business Network.
The University of Nebraska-Lincoln's Center for Entrepreneurship facilitates a business incubator program, she added. The program is based off the campus's Co-Working and Startup Studio. Additionally, Omaha-based Creighton University is ranked in the top 2 percent of all business schools and accounting schools by AACSB International.
"Straight Shot is a local [Omaha] accelerator that works with tech startups," Parker said. Particularly, this accelerator helps tech businesses succeed through sustainability, revenue generation and more.
Low cost of living
Compared to other parts of the country, Nebraska has a low cost of living. According to real estate data compiled by Trulia, a two-bedroom apartment costs $900 or less, on average, in Omaha, the state's most populous city. In Lincoln and less populated areas, the price is even lower.
"The low cost of living leaves enough money for me to travel and do face-to-face work with major media contacts," said Megan Hunt, owner of clothing store Hello Holiday in Omaha's Dundee district.
"I make a bigger impact in my community here locally with events like Fashion Week, BarCamp Omaha, Big Omaha, the robust nonprofit community we have, and all of the other amazing small businesses here who have a great vision for the future of our city," she added.
Coined by its tourism department, Nebraska's tagline is "Visit Nebraska. Visit Nice." Compared to coastal cities especially, the Midwest is known for its friendliness.
"I love being able to interact with our customers on a weekly basis and get[ting] to know their stories and their usual coffee bean order," said Sam Karnes, owner of The Coffee Roaster in Lincoln. "Some of our customers have been getting their coffee here since the late '90s, when I could hardly see over the counter!"
Friendly customers help foster a community around a business. For entrepreneurs, it makes it easier to network.
Young professional communities
The Silicon Prairie encompasses large tech communities in the Midwest, including Nebraska. These communities attract young professionals, especially those who seek a lower cost of living than they'd find in larger cities.
The Greater Omaha Young Professionals network is a great place to start, Parker said. As a board member for four years, she has met tons of emerging professionals in the community. The network is particularly useful for helping new residents to the state emerge into a new marketplace.
"Finding other like-minded professionals is the way to go," she said.
Lack of diversity
Nebraska is not known for being progressive or diverse. However, there are leaders in the small business community fighting for more inclusive business partnerships.
"Sometimes, minority transplants seem to struggle in Omaha," Parker said. "It's something you need to stick with and find your niche, but I think we're still making progress on that front."
In addition to her involvement with the local young professional community, Hunt is active in local politics.
"Many young professionals and creatives are here because they recognize the potential in our increasing diversity — both in culture and industry — and see Nebraska as the best setting for their own story," she added.
The Midwest is known for its friendly banter. Likewise, word of mouth travels much faster, especially when you own a small business.
"My dad hardly advertised, and our business has survived on good old word of mouth and having a great product," said Karnes, who took over the family business from her father two years ago.
Ever since then, however, marketing has been a challenge. They've recently hired a marketing consultant to develop strategies fit for their area. Compared to word of mouth, especially among older Nebraskans, social media isn't the most popular method of marketing.
"Since word of mouth has been our best advertising over the years, a simple client referral program makes a lot of sense, especially going into the holiday season," Karnes added.
Resources for small businesses in Nebraska
If you're a small business owner in Nebraska looking for some resources to help you move forward, here are a few organizations you might want to investigate.
Omaha Small Business Network
The Omaha Small Business Network was established in 1982 as a resource for business owners in the largest city in the state. To help small business owners grow, they foster collaborative relationships with Omaha's premier lenders and focus on community development.
SCORE offers volunteer business professionals and expert "mentors" to help give counsel and guidance to entrepreneurs looking to start or expand their business. Their services are entirely free and volunteer-driven. Here are some of the chapters in Nebraska.
Nebraska Business Development Centers
There are eight small business development centers throughout the state. Each is dedicated to supporting the development and retention of small businesses, from helping entrepreneurs craft business plans and navigate the state's tax code.