Charlotte and Raleigh are two of the best markets to open a Black-owned business according to a national study.
Charlotte-Concord-Gastonia ranked second and Raleigh-Cary ninth in Smart Asset’s analysis of the best places for Black entrepreneurs. Black Americans are the third-largest racial or ethnic group in the U.S. at just over 12% of the population, but less than 3% of all businesses are Black-owned.
Smart Asset created rankings based on business and employment data and do not take into account the social climate or other factors that may contribute to racial inequality in a place. Thirty-nine of the largest metro areas across three categories and nine metrics on topics such as the prevalence of Black-owned businesses, new business success, and income and job security.
The rankings are based on business and employment data and do not take into account the social climate or other factors that may contribute to racial inequality.
The top 10 markets:
1. Austin-Round Rock-Georgetown, Texas The fourth-largest metro area in Texas grew in the number of Black-owned businesses by 88.27% between 2018 and 2020 (ranking second highest). More than a third of total businesses are younger than three years and the area does well for Black job security with a 6.6.% jobless rate that’s lowest in the study.
2. Charlotte-Concord-Gastonia The Charlotte metro area has an above-average presence of Black-owned businesses (the sixth-highest percentage). Black entrepreneurs are also finding a welcoming climate at 27.59% of all businesses (10th-highest). Additionally, the startup early survival rate in the state as a whole is just over 82% (fifth best in the U.S.).
3. Atlanta-Sandy Springs-Alpharetta, Ga. The Atlanta metro area has the highest percentage of Black-owned businesses (7.42%, or 8,663 in total), which has gone up by almost 17% between 2018 and 2020. For Black residents in the area, both the median Black household income ($60,966) and unemployment rate (7.9%) rank in the top 10.
4. Boston-Cambridge-Newton, MA-NH While the Boston area doesn’t have the highest percentage of Black-owned businesses, it has seen major growth over the past two years. Between 2018 and 2020, the number of Black-owned businesses has increased by more than 36% (fifth-highest increase).
Additionally, close to 70% of all businesses in the area report sales and receipts exceeding $250,000 (11th highest).
5. Washington, D.C.-Arlington-Alexandria, Va. The District of Columbia metro area ranks near the top for Black entrepreneurship. The prevalence of Black-owned businesses ranks in the top five as a percentage (7.01%) and gross figure (7,933), up 11.04% between 2018 and 2020.
6. Indianapolis-Carmel-Anderson, Ind. Approximately 3.25% of businesses are Black-owned, an increase of 32.50% between 2018 and 2020 (sixth highest). Nearly 14% of all businesses are younger than three years in the metro area, and Indiana as a whole has a startup early survival rate of 83.59% – third highest in the nation.
7. Miami-Fort Lauderdale-Pompano Beach, Fla. Recent data shows there are roughly 7,072 Black-owned businesses in the area, which make up close to 4% of all businesses – an increase of more than 16% between 2018 and 2020. The Miami metro area also offers a business environment that welcomes new entrepreneurs: 30.35% of all businesses are younger than three years.
8. Huntsville, Ala. There are roughly 295 Black-owned businesses in the Huntsville, Alabama, metro area, which is the lowest number in the top 10. However, relative to the total number of businesses in the area, Huntsville is on par with larger metro areas. Roughly 3.7% are Black-owned (12th-highest) and between 2018 and 2020, the number of Black-owned businesses increased by 37.21% (fourth-highest).
Additionally, Huntsville has the second-lowest Black unemployment rate study-wide (7.1%).
9. Raleigh-Cary has the fifth-highest startup early survival rate (82.74%). New businesses within the metro area have a noteworthy presence – more than 1 in 4 businesses is younger than three years (11th-highest). Black-owned businesses also make up 3.52% of all businesses (or in gross figures, just under 1,000 businesses).
10. Seattle-Tacoma-Bellevue, Wash. Seattle ranks No. 17 for both its total number of Black-owned businesses (1,269) and the two-year growth between 2018 and 2020 for the aforementioned figure (18.05%).
Additionally, Black workers in the area earn the sixth-highest median household income study-wide ($63,155). Washington state offers a startup climate that can benefit early survival – more than 89% of new businesses are still active after one year of operation (ranking No. 1).
Among the findings:
• The number of Black-owned businesses grew by more than 100% in some areas. The Toledo, Ohio, metro area, which ranks No. 33, has the highest percent change between 2018 and 2020 (107.76%), followed by No. 1 Austin, Texas, metro area (88.27%) and the No. 25 Providence, R.I., metro area (65.46%).
• The proportion of Black-owned businesses is more than double the national average in six areas. The Atlanta metro area has the highest percentage (7.42%). It is followed by Washington, D.C. (7.01%); Virginia Beach, Va. (6.83%); Memphis, Tenn. (6.42%); Richmond, Va. (5.88%) and Charlotte (4.94%). Another 14 metro areas exceed the national average of 2.44%.
• The Seattle, Washington, metro area is the only Western metro area to crack the top 10. Six California and Oregon metro areas also made it into our list, but none rank higher than No. 18. All three Western states, however, can offer Black entrepreneurs potential opportunities to start a new business, with a startup early survival rate above 78%.
Black Americans are the third-largest racial or ethnic group in the U.S., making up just over 12% of the population. But less than 3% of all businesses are Black-owned. Some places outperform others, however, when it comes to the prevalence, success, and financial health of Black-owned companies and business owners.