The Best Places for Black-Owned Businesses
This article originally appeared on NerdWallet.com. It is re-published here with permission.
By Cindy Yang, Nerdwallet.com
With more than 100 employees and eight locations nationwide, Thor Construction is one of the largest black-owned construction companies in the U.S.
The company built a giant volcano outside the Mirage Hotel and Casino in Las Vegas, set up a mozzarella cheese factory for Davisco Foods in Lake Norden, South Dakota, and is working on the Minnesota Vikings’ new stadium in Minneapolis. After the January 2010 Haitian earthquake, the company rebuilt 750 homes in the devastated Caribbean country under a U.S government contract.
But the company had a humble beginning back in 1980.
“It was just me and my pickup truck,” owner Richard Copeland says. “The challenges were trying to find work and pay the bills and trying to stay ahead of the Grim Reaper. It was a day-to-day struggle trying to make payroll.”
Where black-owned businesses succeed
Copeland is one of the nation’s 2.1 million black business owners — a group that brings in over $138 billion in revenue each year, according to the National Black Chamber of Commerce.
To understand where the black community’s most robust entrepreneurial activity can be found, NerdWallet crunched the numbers for 111 U.S. metropolitan areas with populations over 100,000. We used seven metrics to analyze those places as we focused on these questions:
Is the overall economic environment strong? We evaluated the number of businesses per 100 residents, median income for the black population, the cost of living and the unemployment rate in each place.
Are existing black-owned businesses successful here? We looked at the percentage of black-owned businesses, percentage of black-owned businesses with paid employees and average revenue per year for black-owned businesses in each place.
Salt Lake City stands out. The black-owned businesses in Salt Lake City, the only place west of Texas in our top 20, have significantly higher average revenue — five times more — than the average of the 111 places analyzed.
Existing businesses matter. Seven of the top 10 metro areas have a strong presence of black-owned businesses. At least 20% of all businesses in each metro area are owned by black entrepreneurs.
Above average in Buffalo. Among metro areas with over 1,000 black-owned businesses, the Buffalo, New York, metro area has the highest percentage of black-owned businesses with paid employees: almost 12% compared with an average of 6.58%.
Best places for black-owned businesses
1. Columbus, Georgia, metro area
Located on the border of Georgia and Alabama, Columbus is a hub for the aerospace industry, automotive manufacturing, defense, technology and tourism. Additionally, the city’s Uptown district is a center for locally owned restaurants, boutiques and salons. Over a third of businesses in Columbus are black-owned, including the historic Sconiers Funeral Home and Citizens Trust Bank. New business owners can take advantage of resources at the Greater Columbus Georgia Chamber of Commerce.
2. Montgomery, Alabama, metro area
Montgomery’s black population is growing faster than any other city on our list, and nearly a third of businesses here are owned by black entrepreneurs. The city is in the middle of organizing its first Black Chamber of Commerce. Existing resources for small businesses include the Alabama State Black Chamber of Commerce and theMontgomery Chamber of Commerce’s Minority Business Development Advisory Task Force.
3. Atlanta-Sandy Springs-Marietta, Georgia, metro area
Atlanta has a relatively affordable cost of living and a strong business environment, and Georgia has the nation’s third-largest black consumer market, worth over $73 billion. To help local companies thrive, the Atlanta Metropolitan Black Chamber of Commerce hosts monthly events and mentoring programs, and Atlanta’s Minority Business Development Agency provides resources, too. Notable businesses include B&S Electric Supply Co. and Engineering Design Technologies.
4. Memphis, Tennessee, metro area
With a large percentage of black-owned businesses, an affordable cost of living and a rich culture, Memphis is a solid place for businesses to blossom. In addition to music, film and TV, Memphis excels in bioscience, green industry and manufacturing. TheBlack Business Association of Memphis offers one-on-one counseling, training sessions and networking events. In addition, the Greater Memphis Chamber has a Small Business Council that provides similar resources for entrepreneurs.
5. Washington-Arlington-Alexandria, Virginia, metro area
The nation’s capital offers a growing technology industry, an educated population and a dynamic mix of public and private sectors. Ben’s Chili Bowl, known for its famous customers including President Barack Obama, has been a celebrated black-owned business in the capital since 1958. Other entrepreneurs looking to get off the ground can take advantage of resources at the National Black Chamber of Commerce, theNorthern Virginia Black Chamber of Commerce and BizLaunch, an Arlington Economic Development entrepreneurship program.
6. Fayetteville, North Carolina, metro area
Small-town charm, a growing black population and an affordable cost of living make Fayetteville a good fit for business owners. Located along Interstate 95 between Charlotte and Raleigh, Fayetteville is near Fort Bragg and Pope Field, which fuel the city’s retail economy. The recently revitalized downtown attracts dozens of restaurants, shops, services and entertainment venues for the area’s 350,000 residents. To promote even stronger business growth, the city’s Community Development Department offers grant and loan programs to help small businesses get off the ground.
7. Durham, North Carolina, metro area
Just 25 miles northwest of Raleigh, the Durham metro area is largely defined by the Research Triangle Park, which includes Duke University, the University of North Carolina at Chapel Hill and North Carolina State University. Durham is becoming a center for technology startups, with several accelerators, co-working spaces and entrepreneurial meetups. The city also encourages social entrepreneurship and has supported several successful mission-driven organizations in the community. Business owners can find resources at the Greater Durham Black Chamber of Commerce.
8. Jackson, Mississippi, metro area
Manufacturing, food processing, distribution, technology and health care are the powers behind the economy in Jackson, where almost a quarter of businesses are owned by black entrepreneurs. To attract new businesses, the city recently launched the Business of the Quarter initiative to recognize successful local companies and Startup Jackson, which provides tips, one-on-one counseling and workshops. One black-owned small business, Royal Bleau Boutique, has found success with guidance from the Jackson State University Small Business Development Center.
9. Savannah, Georgia, metro area
Savannah is steeped in African-American culture, and its history attracts about 13 million visitors each year. The charming coastal city is home to culinary gems, including Chef Joe Randall’s Cooking School and Sisters Real Southern Cooking. The area’s more than 200 banks and credit unions provide plenty of access to funding for new small businesses, and the Creative Coast Alliance is a unique nonprofit that encourages entrepreneurship and innovation.
10. Baltimore, Maryland, metro area
Businesses in Baltimore benefit from 270,000 commuters who arrive in the city every day. Baltimore Open For Business offers a comprehensive online guide to entrepreneurship in the city — with details about permits, zoning, licenses and inspections. The Baltimore Chamber of Commerce is another resource, with its Small Business Alliance Program, which supports entrepreneurs by offering discounted marketing opportunities, focus groups and networking events.
View the interactive graphic below to see the top-rated cities for black-owned businesses, and also see the methodology and full ratings for 111 cities on Nerdwallet.com