SmartAsset has released its list of the best places for Black entrepreneurs in 2023. Despite comprising over 12% of the U.S. population, Black Americans own less than 3% of all businesses. SmartAsset’s study, which analyzed 39 of the largest metro areas, reveals key insights into the prevalence, success, and financial health of Black-owned businesses.
The study focused on three categories and a total of nine metrics, including the number of Black-owned businesses, new business success, and income and job security. The rankings are based solely on business and employment data, excluding social climate and other factors contributing to racial inequality.
Top 5 Metro Areas for Black Entrepreneurs
- Austin-Round Rock-Georgetown, TX: Austin experienced an 88.27% growth in Black-owned businesses and boasts the lowest Black unemployment rate at 6.6%.
- Charlotte-Concord-Gastonia, NC-SC: Charlotte stands out with an above-average presence of Black-owned businesses and a welcoming environment for new businesses.
- Atlanta-Sandy Springs-Alpharetta, GA: Atlanta leads with the highest percentage of Black-owned businesses (7.42%) and a notable increase of 17% between 2018 and 2020.
- Boston-Cambridge-Newton, MA-NH: Boston showcases major growth in Black-owned businesses, with a 36% increase between 2018 and 2020.
- Washington-Arlington-Alexandria, DC-VA-MD-WV: The District of Columbia metro area ranks high in the prevalence of Black-owned businesses, with a 7.01% share.
Other Top Cities for Black Entrepreneurs
- Miami-Fort Lauderdale-Pompano Beach, FL: Solid presence of Black entrepreneurs, with a 16% increase in Black-owned businesses between 2018 and 2020.
- Huntsville, AL: Despite having the lowest number in the top 10, Huntsville boasts a 37.21% increase in Black-owned businesses.
- Raleigh-Cary, NC: With a 3.52% share of Black-owned businesses, Raleigh-Cary offers a supportive environment for new businesses.
- Seattle-Tacoma-Bellevue, WA: Ranking 17th for the total number of Black-owned businesses, Seattle also offers a high median household income for Black workers.
Key Findings
- Growth in Black-Owned Businesses: The Toledo, Ohio metro area saw the highest growth, with a remarkable 107.76% increase between 2018 and 2020. Austin, Texas, and Providence, Rhode Island, also exhibited significant growth at 88.27% and 65.46%, respectively.
- Proportion of Black-Owned Businesses: Six areas surpassed double the national average of Black-owned businesses, with Atlanta, Georgia leading at 7.42%. Other notable areas include the District of Columbia, Virginia Beach, Memphis, Richmond, and Charlotte.
- Western Metro Area Inclusion: Seattle, Washington, emerged as the only Western metro area in the top 10. While six California and Oregon areas made the list, none ranked higher than 18. The Western states, however, present opportunities for Black entrepreneurs with a startup early survival rate above 78%.
Data and Methodology
SmartAsset’s study considered three categories with nine metrics, including the prevalence of Black-owned businesses, new business success, and income and job security. Rankings were determined by averaging scores across the categories.
For detailed information on the data and methodology, click here.