The best place to start a business is not the northeast, according to study

No comments
Image by Pexels from Pixabay 
By Glenn Townes

According to a study released last month, the best region in the country for African Americans to start a business is in the south—with New York being the only state in the northeast to be in the top 10 of the best states for people of color to launch and maintain a small business. New Jersey was the only other state in the northeast ranked in the top half of all fifty state--ranked 18th. The report, entitled State of Black Entrepreneurship in the U.S.” showed a concentration (more than half) of the most successful and lucrative minority owned enterprises are in the south—with the state of Georgia topping the list and Texas and Florida following.

The study, the first of its kind from the FitSmallBusiness—an online/digital publication that tracks trends and small business and entrepreneurship, discovered that minority-owned enterprises in the top 10 states enjoyed a robust and overall booming economy. Entrepreneurs of color in the regions also enjoyed an abundance of resources and amenities from federal and state coffers—including tax incentives and a mostly welcoming start-up environment. Additionally, location in a racially integrated state with a mostly favorable history of growth and survival rate for minority-owned businesses, were key factors in compiling the list. “With this being the inaugural study, our goal was to focus on the data that paints an overall picture of what the African American entrepreneur faces in the business world,” said Michael De Medeiros, editor of special projects at FitSmallBusiness. “Some of the state rankings told an interesting story of the unique journeys that African American entrepreneurs have to traverse.”

As the most successful states, the study found that those in the top 10 all enjoy robust and mostly solid financial and revenue generating outlook. For example, established
and traditional business hubs like Texas, California and New York were, by some accounts expected to be high on the list of revenue generating friendly locales for  minority-owned enterprises. However, states like North Carolina, Mississippi and Tennessee were unexpected—including some small to mid-sized businesses with revenues at or above the million dollar mark. According to the U.S. Department of Commerce, less than 20 percent of the 6 million U.S. Companies with employees make more than $1 million in a given year. In the African American business community about 800,000 firms, only 3 percent have revenues above $1 million, according to various statistics including some from the Minority Business Development Agency of the U.S. Department of Commerce.

In New Jersey, current data from the U.S. Small Business Administration (SBA) in 2018 showed loan approvals to small and minority owned business enterprises regionally—including the Garden State, soared to more than 154 percent in the first four months of the fiscal year.  However, a major detractor from the state obtaining a top ten ranking on the report--(New Jersey ranked 18th on the report) and neighboring states, Pennsylvania and Connecticut ranked 38th and 46th respectively, was due, in large part to New Jersey's high property taxes and overall cost of living index. However, in late February, under the direction of Gov. Phil Murphy, the state announced plans to launch a diversity fund in an effort to significantly boost the number of minority-owned businesses. In a statement last month to the media, Tim Sullivan, the head of the Economic Development Authority (EDA) the legislative arm handling the governor initiative, said, “We have not seen enough

minority-led start ups grow in scale around New Jersey,” he said. “We have to put some resources on the table to bring that reality forward.” Finally, to read a full report of the Best States for Black Entrepreneurs, visit the web site

No comments

Post a Comment