The vibrant corridor of Lake Street in Minneapolis has undergone a remarkable transformation over the past decade. Where once stood vacant storefronts and abandoned properties, now thrives a bustling ecosystem of small businesses—many owned and operated by Somali women entrepreneurs who have injected new life into Minnesota’s economy.
Fatima Hassan adjusts the colorful fabrics in her shop window as morning light streams in. “When I arrived in Minnesota 15 years ago, I never imagined owning my own business,” she says, smoothing a hand over intricately patterned textiles. Her store, Daryeel Fabrics, has become a cornerstone of the Cedar-Riverside community, employing four women and serving hundreds of customers monthly.
Hassan represents a powerful economic force reshaping Minnesota’s business landscape. According to recent data from the Minnesota Department of Employment and Economic Development, Somali-owned businesses have increased 57% since 2020, with women accounting for nearly 63% of these new ventures. This entrepreneurial surge has generated an estimated $87 million in economic activity statewide during 2024 alone.
The Federal Reserve Bank of Minneapolis reports that immigrant entrepreneurs in Minnesota now create jobs at a rate 30% higher than the general population, with Somali women-owned businesses showing particularly strong resilience through economic downturns. Their businesses tend to maintain employees longer and demonstrate impressive survival rates compared to national averages.
“What we’re witnessing is not just individual success stories but a structural transformation of neighborhood economies,” explains Dr. Vanessa Williams, economic development researcher at the University of Minnesota. “These entrepreneurs are creating culturally-specific products and services while simultaneously building wealth within communities that have historically faced significant barriers to capital.”
Access to capital remains a persistent challenge. Traditional lending institutions often hesitate to extend credit to entrepreneurs with limited credit histories or unconventional business models. This financing gap has prompted innovative solutions from within the community.
The Somali American Women’s Business Association (SAWBA), founded in 2022, has developed a microfinance program that has distributed more than $2.3 million in low-interest loans to women entrepreneurs. The organization pairs capital with comprehensive mentorship, helping entrepreneurs navigate regulatory requirements and develop sustainable growth strategies.
Amina Farah, who operates a thriving catering business specializing in Somali cuisine, credits SAWBA with helping her expand from home-based cooking to a commercial kitchen with seven employees. “They understood my vision when traditional banks couldn’t see past my limited English and lack of formal business education,” Farah explains while preparing sambusas for a corporate event.
The economic impact extends well beyond the Somali community. A recent analysis by the Minneapolis Federal Reserve found that neighborhoods with concentrations of immigrant-owned businesses experienced property value increases averaging 14% higher than similar areas without such entrepreneurial activity. These businesses often revitalize previously underutilized commercial spaces, creating vital community hubs.
Minnesota state officials have taken notice. The legislature recently approved a $12 million initiative to support immigrant entrepreneurship through targeted technical assistance and expanded access to capital. Lieutenant Governor Peggy Flanagan called the program “an investment in Minnesota’s economic future” during the bill signing ceremony in March.
Yet challenges persist beyond financing. Regulatory complexity creates particular barriers for entrepreneurs navigating unfamiliar systems in their second language. Halima Mohamed, owner of Barwaqo Beauty Supply, describes spending countless hours deciphering tax forms and permit applications. “Sometimes I stayed up all night trying to understand one document,” she recalls.
The City of Minneapolis has responded by launching a multilingual business navigator program that provides one-on-one assistance with regulations, permitting, and business planning. The program has assisted more than 300 Somali entrepreneurs since January, helping streamline complex processes that previously deterred business formation.
Cultural adaptation represents another balancing act for these entrepreneurs. Many describe the challenge of preserving traditional practices while adapting to American consumer expectations. Farhiya Ali, whose contemporary Somali fusion restaurant has earned critical acclaim, notes that “success requires honoring our heritage while embracing innovation.”
Economic development experts point to these businesses as powerful engines for integration. Bruce Anderson, chief economist at Minnesota’s Chamber of Commerce, observes that “entrepreneurship creates natural bridges between communities through economic relationships. These businesses become cultural ambassadors while generating tangible economic benefits.”
The multigenerational impact may prove most significant. Many Somali women entrepreneurs explicitly describe their businesses as investments in their children’s futures. “I want my daughters to see what’s possible,” explains Sahra Ahmed, who transformed her home-based henna art practice into a thriving beauty salon. “When they help in the shop, they’re learning skills no classroom could teach.”
As Minnesota projects continued population growth through immigration in coming years, the economic contributions of Somali women entrepreneurs will likely expand further. Current trends suggest these businesses could generate over $150 million in economic activity by 2026 if growth trajectories continue.
For communities like Cedar-Riverside and the Lake Street corridor, this entrepreneurial energy has transformed not just individual lives but entire neighborhoods. Where economic analysts once saw decline, these determined women are building thriving enclaves of commerce and community—proving that Minnesota’s economic future is increasingly diverse, resilient, and female-led.
