ORANGE, Calif., Feb. 2, 2022 /PRNewswire/ — In the 18 months between February 2020 and August 2021, Black-owned businesses increased by almost 40 percent. This statistic is even more astounding when you realize that there was a slight drop in the number of white and Asian-owned businesses. Clearly, the pandemic has created historic opportunities for Black entrepreneurs as evidenced in MerchantMaverick.com’s “Top States for Black-Owned Businesses in 2022” report. The full study is available HERE:
MerchantMaverick.com, the business product comparison site for small business owners, discovered that the Mid-Atlantic is particularly ripe for Black entrepreneurship, with Virginia, Maryland and Delaware all appearing in the top five slots. The South also has an unusually good business environment for Black businesses. Ohio is the only state in the top ten located in the North, and it comes in at number 7.
Of course, there are still obstacles. Only 2.3 percent of the employer businesses in the U.S. are Black owned even though African Americans make up over 14 percent of the population.
- The Mid-Atlantic pocket of Virginia, Maryland, and Delaware is particularly fruitful for Black entrepreneurs, as the trio garnered spots 1, 2, and 5, respectively. The region’s success can be attributed to its sizable Black population, as well as local government and private initiatives built to foster Black-owned businesses.
- Southern states generally dominate our ranking. In fact, just one top 10 state (Ohio) is firmly located in the northern half of the contiguous 48 states. The southern dominance extends past the pinnacle as the three highest-ranked states outside the top 10 (Mississippi, Tennessee, and Arkansas) are all located soundly in the South.
- Black-owned businesses face major inequities when it comes to payroll. The national average annual payroll for employer businesses is $1.25 million — over four times the $301K in payroll Black-run employer businesses average per year. A funding gap almost certainly plays a role here. Earlier research by the Stanford Institute shows that White-owned businesses receive an average of $18,500 in outside equity at founding, compared to just $500 for Black-owned businesses. Already starting at a disadvantage, Black businesses face hurdles while attempting to catch up down the stretch.
THE TOP 10 STATES FOR BLACK ENTREPRENEURS IN 2022:
#6. North Carolina
#8. New Mexico
Researchers analyzed data from sources including the U.S. Census Bureau’s 2020 Annual Business Survey, The US Bureau of Economic Analysis and TaxRates.org – to bring you this list. To best determine the best states for Black entrepreneurs, the researchers selected and weighted the following metrics:
These four metrics equally accounted for 75% of the overall score:
- Black-owned employer businesses per capita
- Percent of the workforce employed by Black-owned businesses
- Average annual payroll of Black-owned businesses
- Average annual income of Black business owners
And the next three metrics equally accounted for 25% of the overall score:
- Unemployment rate
- State income rate
“In a time when businesses are closing left and right, it’s great to find that there is a segment of the economy which is growing so well,” says Julie Titterington, Editor-in-Chief, MerchantMaverick.com. “We all look forward to seeing if this growth rate can sustain itself as the economy generally improves.”
With more than 700,000 page views per month, MerchantMaverick.com is an online publication devoted to providing business owners with accurate, unbiased reviews for their businesses. The company’s goal is to provide the most honest, accurate, and useful reviews of business products and services to empower entrepreneurs with businesses of all sizes.
For more information on this list and this topic, please contact Sarah Johnson, [email protected]
Credit: Source link