Report: Minnesota No. 1 for rate of small businesses, No. 2 for women-owned businesses

When it comes to the rate of small business ownership, Minnesota tops them all.

The Kauffman Foundation's Main Street Entrepreneurship Index, which measures the health of small business across the United States, was released Thursday. It found a rise in small business activity in all but one state over the past year.

Minnesota improved in the two key indictors tracked by Kauffman: the rate of business ownership and the density of established small businesses.

For the first measure, more than 7 percent of adult Minnesotans owned a business for their main job in 2015.

The established small business density metric is a bit more complicated. It's defined as the number of businesses that are at least five years old and employ less than 50 people. Kauffman found that 1,229 out of every 100,000 adults in Minnesota own established small businesses.

When Kauffman weighed both factors, Minnesota's small business health was stronger than any of the other 25 largest U.S. states. The states are broken into two halves -- large and small -- for peer-state comparisons.

The nonprofit also tracked certain demographics in the report. The North Star State ranked second for businesses owned by women and third for businesses owned by Baby Boomers.

The report also drills down to the metropolitan level. Minneapolis-St. Paul moved up from the number ten spot last year to the number nine spot this year.

More than 6.2 percent of adults in the Twin Cities are business owners and 1,118 out of every 100,000 adults in the metro own established small businesses.

Startups still lag

And while Minnesota is good at keeping its established small businesses going, it is falling behind when it comes to new startup activity.