Business ownership and entrepreneurship are key ways to grow a community, providing both business owners and workers a source of income to help them improve their lives as well as the areas they live.
For Black Americans, this is just as true as the rest of the country. According to the Census, there are over 2.5 million Black business owners, a number that’s been increasing in recent years. No matter what these businesses are, they play important roles in their communities, neighborhoods, and cities where they’re located.
With that in mind, we conducted a study to find the cities where Black-owned businesses are thriving. We analyzed 124 cities across the U.S. on 7 different factors and compiled the results into the findings below. Keep reading to see all the details!
Below are our rankings for the best cities for Black-owned businesses. We scored each city based on the area’s:
- Percentage of Black-owned businesses
- Average number of employees in Black-owned businesses
- Average pay in those companies
- Average annual revenue of Black-owned businesses
- Number of businesses per capita
- Unemployment rate in the area
- Monthly homeowner costs as a percentage of household income (as a proxy for cost of living).
Our full methodology is at the bottom of the page. Below are the on the top 20 cities from our findings (with the full list and details on all cities below):
- Memphis, TN Metro Area
- Montgomery, AL Metro Area
- Jackson, MS Metro Area
- Huntsville, AL Metro Area
- Atlanta-Sandy Springs-Roswell, GA Metro Area
- Baton Rouge, LA Metro Area
- Mobile, AL Metro Area
- Shreveport-Bossier City, LA Metro Area
- Augusta, SC Metro Area
- Birmingham-Hoover, AL Metro Area
- Washington, D.C.-Arlington-Alexandria, VA Metro Area
- Youngstown-Warren-Boardman, OH Metro Area
- Tallahassee, FL Metro Area
- New Orleans-Metairie, LA Metro Area
- Columbia, SC Metro Area
- Lafayette, LA Metro Area
- Charlotte-Concord-Gastonia, NC Metro Area
- Baltimore-Columbia-Towson, MD Metro Area
- Durham, NC Metro Area
- Savannah, GA Metro Area
Coming in at the top spot is the Memphis, TN area. Memphis has the highest number of Black-owned businesses in the United States at just over 43%. Additionally, it scored well for cost of living.
Interestingly, two metro areas from Alabama made the top five: Montgomery came in second and Hunstville came in fourth. Both of these cities have a high percentage of Black-owned businesses, low unemployment, and low cost of living. Huntsville has the highest average pay per worker at over $52,000.
Also in the top five are Jackson, MS and the Atlanta, GA metro area. Like the others in the top five, they have a high percentage of Black-owned businesses which helped them in their high score.
All of the top five cities in our rankings are located in the south. Out of the top 20, 19 are below the Mason-Dixon line. The only one that falls above is the Youngstown, OH metro area.
Below is a chart with all 124 cities included in our study along with their numbers for each category.
To determine the best cities for Black-owned businesses, Overheard on Conference Calls analzyed 124 cities in the U.S. on seven key metrics. Each metric was graded on a 10-point scale weighted according to its importance. The factors and weights are as follows:
compared the 50 most populated cities in the U.S. on five key metrics with two overall categories. Each metric was graded on a 10-point scale and weighted according to its importance to remote workers. The categories, factors, and weights can be seen below.
After analyzing the data, we compiled the city’s weighted average across all metrics to calculate its overall score. Those scores were used to rank-order our sample with a total score of 110. A score of 110 would be a city where Black-owned businesses are completely thriving.
- Percentage of Black-owned businesses – 40 points
Using U.S. Census Bureau’s Statistics of U.S. Businesses data, we compared the number of Black-owned companies to the number of overall companies in each metro area. A higher percentage resulted in a higher score.
- Average number of employees in Black-owned businesses – 5 points
A higher number meant a higher score.
- Average pay for employees in those companies – 15 points
A higher average pay resulted in a higher score.
- Average annual revenue of Black-owned businesses – 15 points
A higher annual revenue resulted in a higher score.
- Number of businesses per capita – 5 points
A higher number resulted in a higher score.
- Unemployment rate in the area – 10 points
We used data from the BLS. A lower unemployment rate meant a higher number.
- Monthly homeowner costs as a percentage of household income (as a proxy for cost of living) – 20 points
We used U.S. Census data. A lower percentage resulted in a higher score.