Atlanta Is Nation’s Hub for Black-Owned Businesses
Since the resurgence of the Black Lives Matter movement in 2020, consumers have spotlighted the need to support Black-owned businesses. In fact, the rate of searches for Black-owned businesses spiked by 3,085% in February 2021 relative to February 2020, according to a data analysis by Yelp.
With February marking Black History Month, we looked at where Black-owned businesses are most prominent. Here’s what we found.
On this page
- Key findings
- What percentage of businesses are Black-owned?
- Where Black-owned businesses are most prominent
- Where Black-owned businesses are least prominent
- Full rankings
- Health care, social assistance businesses most likely to be Black-owned
- Becoming a Black entrepreneur? Here are 3 expert tips
- Methodology
Key findings
- The percentage of U.S. businesses with Black owners didn’t change from 2019 to 2020, according to the latest available data. In 2019 and 2020, 2.4% of U.S. businesses had Black owners. The Black population remained steady in this period, from 12.8% in 2019 to 12.6% in 2020.
- Atlanta has the highest rate of Black-owned businesses in the U.S. 7.4% of businesses in the Georgia metro are Black-owned — up from 6.7% in last year’s report, when Atlanta tied for No. 3. Atlanta now has the second-highest number of Black-owned businesses and the sixth-highest Black population rate among the 50 metros examined. Behind Atlanta are Washington, D.C. (7.0%), and Virginia Beach, Va. (6.8%).
- Portland, Ore., has the lowest rate of Black-owned businesses among the 50 metros with the most Black-owned businesses. Just 0.9% of businesses in the metro are Black-owned, relative to a Black population of 2.8% — also the lowest among the 50 metros. Ahead of Portland are Bridgeport, Conn. (1.0%), and Tulsa, Okla., and San Diego (tied at 1.3%).
- More than 4 in 10 Black-owned businesses are in the health care and social assistance or professional, scientific and technical services industries. 41.4% of Black-owned businesses are in one of these two industries, with health care and social assistance making up the majority at 27.5%. Overall, 25.8% of businesses — regardless of race — are in one of these two industries.
What percentage of businesses are Black-owned?
In 2020 (the latest available data), 2.4% of U.S. businesses had Black owners — the same percentage as in 2019, based on our research last year. Over that period, the Black population remained relatively unchanged, from 12.8% in 2019 to 12.6% in 2020.
With small business applications booming throughout the COVID-19 pandemic, LendingTree credit analyst Matt Schulz says the unchanged percentage of Black business owners during this time likely indicates a financial disparity.
Among Black adults who applied for credit in 2021, 46% were denied or approved for less than they requested, according to a LendingTree study on racial disparities. That compares with 22% of white adults. The study also notes that the median net worth of a Black family in 2019 was $24,100, versus $189,100 among white families. That indicates that Black entrepreneurs may have less financial means to grow and develop their businesses than white entrepreneurs.
Despite making up 68.2% of the population, white business owners control 82.7% of U.S. businesses. Still, that’s down from 86.5% in 2019, suggesting increased support for minority-owned businesses.
| Race | % of businesses |
|---|---|
| White | 82.7% |
| Asian | 10.6% |
| Black or African American | 2.4% |
| American Indian and Alaska Native | 0.7% |
| Native Hawaiian and other Pacific Islander | 0.2% |
Source: LendingTree analysis of 2020 data from the 2021 U.S. Census Bureau Annual Business Survey. Totals don’t equal 100% due to data availability.
There isn’t just a racial disparity among business owners — Black-owned businesses also tend to be smaller. The average Black-owned business has a payroll of just less than $300,000, while the average payroll for businesses nationally is $1.27 million.
Where Black-owned businesses are most prominent
Across the 50 metros in the U.S. with the most-Black owned businesses in 2020, Atlanta had the highest percentage of Black-owned businesses at 7.4%. This is an increase from last year’s report, when 6.7% of businesses were Black-owned — tying for the No. 3 position in 2019.
Atlanta also has the second-highest number of Black-owned businesses and the sixth-highest Black population among the 50 metros examined. The Georgia metro has programs and initiatives to support Black-owned businesses, including the Atlanta Business League, which provides resources and support to Black entrepreneurs. And the state has 10 Historically Black Colleges and Universities (HBCUs), which provide education, training and mentoring for future Black business owners. (Georgia ties with North Carolina as having the second-most HBCUs.)
Separately, the earlier Yelp analysis notes searches for Black-owned businesses in Atlanta were more than twice that of the average of the top 100 metros. In fact, searches in Georgia were twice the level in the average state.
| Rank | Metro | Total businesses | Black-owned businesses | % of Black-owned businesses | % of population that is Black |
|---|---|---|---|---|---|
| 1 | Atlanta, GA | 116,798 | 8,663 | 7.4% | 34.2% |
| 2 | Washington, DC | 113,159 | 7,933 | 7.0% | 25.1% |
| 3 | Virginia Beach VA | 28,372 | 1,937 | 6.8% | 30.2% |
| 4 | Columbus, GA | 4,062 | 273 | 6.7% | 42.1% |
| 5 | Memphis, TN | 18,024 | 1,158 | 6.4% | 47.4% |
Source: LendingTree analysis of 2020 data from the 2021 U.S. Census Bureau Annual Business Survey. The population data is also from the U.S. Census Bureau.
Behind Atlanta are Washington, D.C. (7.0%), and Virginia Beach (6.8%). While Washington’s ranking remains unchanged from last year’s report, Virginia Beach jumped from No. 10. In 2019, the percentage of Black-owned businesses in the metro was 4.7%.
One possible reason for the change? In 2019, the Virginia Beach City Council amended an initiative to provide a boost to minority-owned businesses that seek city contracts. A disparity study conducted in 2018 — as reported by 13News Now — found that less than 19% of city contracts between 2012 and 2017 were awarded to women and minorities. The Council in 2020 voted to implement all suggestions from the disparity study.
Additionally, Virginia Beach increased its spending on minority and women-owned businesses since the disparity study’s release — from roughly $48.9 million in fiscal year 2019 to $51.6 million in fiscal year 2020.
Where Black-owned businesses are least prominent
Meanwhile, Portland, Ore., has the lowest rate of Black-owned businesses among the 50 metros examined. In the Oregon metro, 0.9% of businesses are Black-owned. Similarly, Black people here account for 2.8% of the population — the lowest among the 50 metros.
While the population could play a significant role in its ranking, Portland — like many metros on the West Coast — has a high cost of living, which can make it harder for small business owners to get started.
While that applies to all entrepreneurs, it’s especially true for Black entrepreneurs, who already face a disproportionate lack of access to capital and resources. According to the U.S. Bureau of Economic Analysis (BEA), Portland’s regional price parity is 105.4 — meaning the metro’s cost of consumer goods and services (including groceries, restaurants, transportation and utilities) is 5.4 percentage points higher than the U.S. average.
| Rank | Metro | Total businesses | Black-owned businesses | % of Black-owned businesses | % of population that is Black |
|---|---|---|---|---|---|
| 1 | Portland, OR | 56,089 | 504 | 0.9% | 2.8% |
| 2 | Bridgeport, CT | 20,929 | 218 | 1.0% | 11.5% |
| 3 | Tulsa, OK | 18,391 | 232 | 1.3% | 7.8% |
| 3 | San Diego, CA | 72,750 | 967 | 1.3% | 4.9% |
| 5 | Phoenix, AZ | 79,322 | 1079 | 1.4% | 5.5% |
Source: LendingTree analysis of 2020 data from the 2021 U.S. Census Bureau Annual Business Survey. The population data is also from the U.S. Census Bureau.
Ahead of Portland is Bridgeport, Conn. (1.0%). Following that, Tulsa, Okla., and San Diego tie for third (at 1.3%). All three metros have relatively low Black populations, particularly compared to the metros with the highest rate of Black-owned businesses. In Bridgeport, Black people make up 11.5% of the entire population. Meanwhile, they make up 7.8% of the population in Tulsa and 4.9% of the population in San Diego.
Full rankings
| Rank | Metro | Total businesses | Black-owned businesses | % of Black-owned businesses | % of the population that is Black |
|---|---|---|---|---|---|
| 1 | Atlanta, GA | 116,798 | 8,663 | 7.4% | 34.2% |
| 2 | Washington, DC | 113,159 | 7,933 | 7.0% | 25.1% |
| 3 | Virginia Beach VA | 28,372 | 1,937 | 6.8% | 30.2% |
| 4 | Columbus, GA | 4,062 | 273 | 6.7% | 42.1% |
| 5 | Memphis, TN | 18,024 | 1,158 | 6.4% | 47.4% |
| 6 | Richmond, VA | 23,757 | 1,397 | 5.9% | 29.2% |
| 7 | Charlotte, NC | 48,835 | 2,414 | 4.9% | 22.8% |
| 8 | Baltimore, MD | 51,390 | 2,331 | 4.5% | 29.1% |
| 8 | Greensboro, NC | 13,853 | 621 | 4.5% | 27.2% |
| 8 | Shreveport, LA | 8,068 | 360 | 4.5% | 39.8% |
| 11 | Baton Rouge, LA | 14,370 | 626 | 4.4% | 35.1% |
| 12 | Orlando, FL | 56,174 | 2,425 | 4.3% | 16.3% |
| 13 | New Orleans, LA | 23,614 | 987 | 4.2% | 34.4% |
| 14 | Miami, FL | 177,225 | 7,072 | 4.0% | 20.7% |
| 15 | Jacksonville, FL | 31,152 | 1,167 | 3.7% | 21.2% |
| 15 | Huntsville, AL | 7,951 | 295 | 3.7% | 21.9% |
| 15 | Lakeland, FL | 9,792 | 358 | 3.7% | 15.0% |
| 18 | Tallahassee, FL | 7,046 | 257 | 3.6% | 32.3% |
| 19 | Raleigh, NC | 28,047 | 988 | 3.5% | 19.5% |
| 20 | Houston, TX | 108,772 | 3,586 | 3.3% | 17.2% |
| 20 | Indianapolis, IN | 34,201 | 1,113 | 3.3% | 15.2% |
| 22 | New York, NY | 482,755 | 14,265 | 3.0% | 16.8% |
| 23 | Las Vegas, NV | 38,405 | 1,117 | 2.9% | 12.0% |
| 24 | Philadelphia, PA | 112,378 | 3,151 | 2.8% | 20.6% |
| 25 | Dallas, TX | 130,407 | 3,414 | 2.6% | 15.9% |
| 25 | Toledo, OH | 9,283 | 241 | 2.6% | 13.2% |
| 25 | Detroit, MI | 79,349 | 2,059 | 2.6% | 21.8% |
| 28 | Chicago, IL | 197,954 | 4,838 | 2.4% | 16.4% |
| 29 | Hartford, CT | 22,347 | 500 | 2.2% | 11.4% |
| 29 | Fresno, CA | 13,388 | 299 | 2.2% | 4.5% |
| 29 | Tampa, FL | 66,952 | 1,443 | 2.2% | 12.1% |
| 32 | Los Angeles, CA | 322,976 | 6,864 | 2.1% | 6.4% |
| 32 | San Antonio, TX | 34,191 | 712 | 2.1% | 6.8% |
| 34 | Austin, TX | 44,908 | 915 | 2.0% | 7.3% |
| 35 | Boston, MA | 100,892 | 1,936 | 1.9% | 7.9% |
| 35 | Riverside, CA | 62,395 | 1,195 | 1.9% | 7.2% |
| 35 | Minneapolis, MN | 75,956 | 1,440 | 1.9% | 8.8% |
| 38 | Oklahoma City, OK | 28,217 | 522 | 1.8% | 10.1% |
| 38 | Providence, RI | 32,755 | 594 | 1.8% | 5.6% |
| 38 | Cape Coral, FL | 16,061 | 282 | 1.8% | 8.1% |
| 41 | Louisville, KY | 20,163 | 347 | 1.7% | 14.9% |
| 42 | Rochester, NY | 19,004 | 311 | 1.6% | 11.1% |
| 43 | Denver, CO | 68,359 | 1,052 | 1.5% | 5.6% |
| 43 | Deltona, FL | 13,142 | 199 | 1.5% | 10.7% |
| 43 | Seattle, WA | 85,945 | 1,269 | 1.5% | 5.9% |
| 46 | Phoenix, AZ | 79,322 | 1,079 | 1.4% | 5.5% |
| 47 | San Diego, CA | 72,750 | 967 | 1.3% | 4.9% |
| 47 | Tulsa, OK | 18,391 | 232 | 1.3% | 7.8% |
| 49 | Bridgeport, CT | 20,929 | 218 | 1.0% | 11.5% |
| 50 | Portland, OR | 56,089 | 504 | 0.9% | 2.8% |
Source: LendingTree analysis of 2020 data from the 2021 U.S. Census Bureau Annual Business Survey. The population data is also from the U.S. Census Bureau.
Health care, social assistance businesses most likely to be Black-owned
More than 4 in 10 Black-owned businesses are in the health care and social assistance or professional, scientific and technical services industries. In fact, 41.4% of Black-owned businesses are in one of these two industries, with health care and social assistance — which includes physicians, dentists, child day care services workers and more — making up the majority at 27.5%.
| Industry | Total businesses | Black-owned businesses | % of all businesses | % of Black-owned businesses |
|---|---|---|---|---|
| Health care and social assistance | 657,819 | 38,819 | 11.4% | 27.5% |
| Professional, scientific and technical services | 833,235 | 19,575 | 14.4% | 13.9% |
| Administrative and support and waste management and remediation services | 355,249 | 12,743 | 6.2% | 9.0% |
| Construction | 729,166 | 10,330 | 12.6% | 7.3% |
| Transportation and warehousing | 201,757 | 9,581 | 3.5% | 6.8% |
Source: LendingTree analysis of 2020 data from the 2021 U.S. Census Bureau Annual Business Survey. The population data is also from the U.S. Census Bureau.
The top reason? It’s likely because of demand. According to the Bureau of Labor Statistics, the health care industry is projected to grow 13% between 2021 and 2031, presenting more opportunities for employment than other slow-growing industries.
Meanwhile, the professional, scientific and technical services industry — which includes payroll services, graphic design services, advertising agencies and more — may be attractive because it doesn’t require significant startup capital, which can be a barrier for many Black entrepreneurs who may have limited access to traditional forms of financing. In fact, a January 2020 LendingTree study on startup costs by industry found that the median cost for starting a professional, scientific and technical services firm in 2016 (the latest available data) was $9,952 — the lowest of the industries analyzed.
Regardless of race, though, these industries are popular for entrepreneurs — over a quarter (25.8%) of businesses are in one of those two industries.
Becoming a Black entrepreneur? Here are 3 expert tips
Though high inflation adds another layer of difficulty to the already-existing disparities Black business owners face, starting a business isn’t impossible. For those looking to dive into the world of entrepreneurship, Schulz offers the following advice:
- Look for help. “There are many organizations that can be invaluable tools for your business,” he says. “Groups like the Black Business Association, U.S. Black Chambers, the Small Business Administration and many others have resources to help you with building business plans, training, promoting, networking, building capital and most any other aspect of business.”
- Make a plan. “Yes, it’s easier than ever to start a small business, but just because you can start one in an afternoon doesn’t mean you should do it that quickly,” Schulz says. “You still need to take the time to do your homework. Think about your target consumer. Research your competition. Understand the costs of starting a business. These are just a few of the things to concern yourself with, and they all matter.”
- Lean on your cheering section. “We tend to glamorize entrepreneurship, but the truth is that it is often grueling, all-consuming work,” he says. “If you have friends and family rooting for you and supporting you emotionally, it can make a huge difference on those long days when you’re ready to give up and move on.”
Methodology
LendingTree researchers analyzed 2020 data from the 2021 U.S. Census Bureau Annual Business Survey to rank the metros with the highest percentage of Black-owned businesses.
Researchers first compiled the number of Black-owned businesses in the 50 metros with the most Black-owned businesses. Analysts then compared that number to the total number of businesses in each metro. The metros with the highest percentage of Black-owned businesses were ranked from highest to lowest.
Because of data availability, some metros included in last year’s LendingTree report — including Fayetteville, N.C. — aren’t in this year’s report.