If you are considering launching a minority-owned business, it is helpful to understand which cities and states are the top considerations for like-minded entrepreneurs.
As seen in the recent post, Exploring Challenges and Opportunities for Minority Business Owners in 2019, there are real possibilities for minority business owners to thrive today. Here is a closer look at the top cities and top states for minority entrepreneurs in 2019.
High Concentration in Small Number of States
There has been significant growth in minority-owned businesses in recent years. The U.S. Small Business Administration reported in 2018 that 29 percent of businesses are minority-owned and that the rate of growth is increasing.
An analysis shows that 10 states are home to 70 percent of all minority-owned businesses, with the top four representing 54 percent. Together, the 10 states saw a 91 percent increase in the number of such businesses between 2002 and 2012. They are (with percent increase):
U.S. Census data on “employer firms” (those with at least one paid employee who is not the owner) reveal similar growth – a one-year increase of 4.9 percent in minority-owned businesses to 996,000 in 2015. This data shows the top 10 states to be (with percentage owned among all businesses in the state):
Top Cities for Minority Entrepreneurs
Entrepreneur magazine ranked its top cities for minority entrepreneurs. For the highest-ranked cities, the magazine cited high marks on several key factors, including:
These cities address some of the most critical barriers that many minority-owned businesses face – discrimination, difficulty accessing capital, and a lack of networks – making them far more attractive to entrepreneurs.
The top 10 cities are:
A look at the most recently available government statistics reveals that these are the top 10 cities in terms of most minority-owned businesses:
Why are these cities attractive? A recent post by Small Business Trends cites four key factors:
These factors matter to minority entrepreneurs thinking about where to place a business.
Types of Jobs Offered
There are some regional factors that play into which are the most popular industries. For example, New York, Philadelphia, and Miami have a large number of minority-owned businesses in tourism. The three Texas cities have a large number of businesses in construction, technology, and engineering.
Overall, the sectors with the most minority-owned businesses are:
Knowing where the best states and cities are is a critical part of the decision-making process for entrepreneurs. Moreover, having access to the right small business funding is crucial.
Benetrends is a pioneering company that has helped thousands of small businesses leverage existing 401(k) funds to fuel their new business. To learn more about Benetrends’ small business funding strategy, read Benetrends funding success stories.
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