Below is a list of some FAQs regarding business startup, compiled by Community and Economic Development Associates’ Joya Stetson.

Business Planning

You should start a business that you will be passionate about. Entrepreneurship can be very rewarding; however, it is also challenging and requires the dedication of significant time and financial resources. Therefore, it’s very important to love what you do so that it will be easier to stick with it through the difficulties you’ll invariably encounter.

Furthermore, you should do some market research as it pertains to the demand, financial feasibility and sustainability of your idea. While passion is important, if a business won’t be profitable, it will be difficult to continue its operation long-term.

The State of MN has produced a robust guide to starting a business. The information is lengthy, but could provide some valuable points of interest for someone looking for answers. Their guide, including an index, can be found here.

While tools exist online in today’s landscape (e.g. RocketLawyer, LegalZoom, etc.), it is up to you to determine your understanding of the topic and what your needs might be. Different structures come with varying levels of personal liability and each tends to have its own set of benefits.

Through the Small Business Development Center, small businesses do have access to a free 30-minute legal consultation that may assist with matters such as this, too.

SBDC, located in Rochester, MN on the RCTC campus in the Heintz Center, provides a number of services to its small business clients. As an organization funded through the Small Business Administration (SBA), their services are provided at no charge.

They can assist with items such as business planning, cash projections, financial/loan packaging, marketing, research, and other business needs. Further, services such as a free 30-minute legal consultation are accessible through the SBDC offices.

Registration is free and easy at:

Staff from Community and Economic Development Associates (CEDA) that work in your community are also available to assist with your business planning needs through the SBDC.

We highly recommend the construction of a business plan. This plan assists you with explaining your idea/product/service to other organizations in addition to providing a great foundation for you as a business owner.

Many entities such as the Caledonia EDA, Houston County EDA, or a traditional lender will require the submission of a business plan to receive financing or assistance.

There are no requirements (for brevity or lengthiness). Ultimately the business plan strives to convey where your business is now, and your plans for how to take it where you see the future heading.

Sections for the narrative portion of a business plan can vary, but generally include the following: History, Products/Services, Market Analysis/Strategies ( including competition, pricing structure, and distribution (if applicable)), Advertising, Sales, Process for Making Product (if applicable), Management (including resume(s)), Future Plans, Financial Projections (including monthly cash flow projections, profit and loss statement and balance sheet), Business Debts/Credits Summary, Statement of Collateral, Personal Financial Statements, Commitment Letters, Appraisals/Lease Agreement/Purchase Agreement, Affiliates (e.g. franchises, subsidiaries, etc.), Articles of Incorporation and Bylaws.

Many resources and templates exist for business planning. One such example available is through SCORE offices. This template can be located here.

While the County is not able to write business plans for companies, our community does have SBDC affiliated assistance on staff to review business plans and assist with questions.

Loan officers will typically require a copy of your business plan, so setting up meetings with your banker once you have completed a draft of your plan and financial projections is a good idea. By this point, you’ll have a better indication of your total project costs, your owner’s contribution of equity and the amount of financing you’ll require.

No, it is not required. While the City does not have preferences as to which lender is used for a project, occasionally, lenders working within a community have a first-hand knowledge of the demand for a product or service and the overall impact that a business will have on the community. This can facilitate the lending process.

Absolutely. Business lending is still a human process. Different banks may be able to offer different packages based on their resources, priorities, relationships, etc.

The short answer to this question is yes. It is very important that a business owner is able to generate and allocate capital necessary to pay his/her expenses. Without this, a business will ultimately be unable to thrive. While a business owner should expect (at least) the first year of business to be lean or difficult, he or she should still plan to make and draw revenue sufficient to cover all expenses.

The first year of operation can be difficult for businesses. A couple of common challenges that you should plan for are:

  1. Shortfalls in your revenue projections. This is why operating capital is so crucial to success. With unexpected underperformance or expenses inevitably arising, it’s important to plan for deficits.
  2. Changes in or loss of management. Whether it is a partnership or staff hired, there may be changes in your human capital resources that have to be dealt with professionally, efficiently and expeditiously. An exit plan for partners may be beneficial.


Checking with local realtors and contacting the Caledonia EDA and Houston County EDA are good first steps. If you have a specific space need and want assistance looking for space, feel free to reach out to the Caledonia EDA or Houston County EDA for assistance.

Extremely difficult. This is challenging because the improvements being completed by the leasee business owner will stay with the property that is not owned by the business. The lack of collateral can be problematic for the bank or other financing agency.

Occasionally, business owners can work out lower rental payments or other methods sufficient to warrant the project’s completion.

Typically, commercial businesses will operate in the business/highway commercial zones, and industrial uses must be located in industrial zones. However, it is best to check with the City of Caledonia to determine which zoning districts permit your proposed business use and whether your business will need a conditional use permit or variance. If your location is currently in another zone than is required for your business type or the zoning regulations have requirements that are not feasible for your business, you may need to request a zoning change or variance.


The City and County offer a number of programs to assist new businesses. Information on gap financing, tax incentives, and free business counseling can be found here

There are also other regional entities with programs to help your business:

  • State of MN.  Depending upon the project, other incentives such as business financing and job creation awards may also be available through the State of Minnesota. A list of State offered programs can be found here.
  • MiEnergy.  MiEnergy Cooperative offers gap financing for businesses looking to start or expand in the community, as well as connection to the United States Departme