What does the closure of beloved restaurants and music stores mean for small business in Minnesota?

“Running a small business is a special kind of challenge, and like any business, while there are good days and bad days, good months and bad months, a bakery is a particular type of physical challenge,” the post read. “We understand that this may shock and sadden many of our fans, but we also know that we have been blessed with an incredibly supportive, caring customer base who will recognize the people behind the treats, and for that, and so much more, we enter these final weeks with immense gratitude.”

The owners of Palmer’s, a Minneapolis dive bar that was hailed as one of the best in America, said a national trend in declining alcohol sales led to the “incredibly difficult but necessary decision” to shutter the 119-year-old business on Sept. 14.

Those declining sales and challenges from losing nearby businesses drained between $10,000 and $30,000 a month from the bar’s coffers, according to the owners, but a neighbor plans to buy the the building for a community space.

The Minnesota Department of Employment and Economic Development (DEED) reports that small businesses, which are defined as companies that employ fewer than 500 people, make up 99.5% of all businesses in the state.

But between March 2023 and March 2024, at least 16,029 businesses opened as 21,448 closed, according to the U.S. Small Business Administration.

Still, Mary Haugen with DEED said small businesses tend to survive in Minnesota, citing state data which shows more than half of the businesses formed in 2019 remained open in 2024. But rising costs can prompt landlords to increase their lease and force businesses to close up shop.