Atlanta Remains Nation’s Hub for Black-Owned Businesses
February marks the annual observance of Black History Month, honoring African Americans’ central role in U.S. history. This monthlong celebration also sheds light on the inequalities Black Americans continue to face in this country.
The newest LendingTree study spotlights Black-owned businesses. While the rate of Black-owned companies increased in 2021 (the latest data available), it lags significantly behind the percentage of Black residents. Limited resources and discrimination in financial services are just some hurdles some Black business owners face.
Still, despite the challenges, several parts of the country serve as hubs for Black-owned businesses — with Atlanta topping the list for the second year in a row.
Key findings
- 2.7% of U.S. businesses are Black-owned. According to the 2021 data (the latest available), that’s a 12.5% increase from 2.4% in 2020 and 2019. This comes amid a decrease in the Black population, from 12.8% in 2019 to 12.6% in 2020 and 12.2% in 2021.
- Atlanta again has the highest rate of Black-owned businesses in the U.S. 8.8% of businesses in Atlanta are Black-owned, a jump from 7.4% in 2020 but still the highest among the 50 metros with the most Black-owned businesses. Among those metros, Atlanta has the second-highest number of Black-owned businesses and the fifth-highest Black population rate. Following Atlanta with the next highest rate of Black-owned businesses are Washington, D.C. (7.6%), and Memphis, Tenn., and Augusta, Ga. (tied at 6.7%).
- Similarly, Portland, Ore., again has the lowest rate of Black-owned businesses among the 50 metros with the most Black-owned businesses across the U.S. 1.1% of businesses in the metro are Black-owned, though it’s increased from 0.9% in 2020. This Oregon metro also has the lowest Black population rate among the 50 metros, at 3.0%. Ahead of Portland for the lowest rate of Black-owned businesses are Providence, R.I., and Austin, Texas (tied at 1.3%).
- Nearly 3 in 10 Black-owned businesses are in the health care and social assistance industry. 28.0% of Black-owned businesses are in this industry, with professional, scientific and technical services next at 13.9%.
2.7% of U.S. businesses are Black-owned
Black-owned businesses account for 2.7% of all U.S. companies, according to 2021 data (the most recent available). Despite the low rate, though, the percentage of Black-owned businesses increased by 12.5% from 2.4% in 2020 and 2019.
The rise in the rate of Black-owned businesses occurred despite a slight drop in the Black population from 12.8% in 2019 and 12.6% in 2020 to 12.2% in 2021.
One reason for the increased rate of Black-owned businesses amid a population drop could be economic pressures during the pandemic.
While the reasons for venturing into entrepreneurship varied from having more disposable income to gaining a new perspective, many businesses launched during 2020 and 2021 out of pure need.
“Given the fact the Black community was hit particularly hard, both physically and financially, by the pandemic, there’s no question many of these businesses were started out of necessity,” Schulz says.
But despite an increased rate, the disparity between the number of Black-owned businesses (2.7%) and the percentage of the Black population (12.2%) is significant. In contrast, white-owned companies accounted for 82.0% of businesses in 2021, but just 60.9% of the population.
Percentage of businesses by race
| Race | Number of businesses | % of businesses |
|---|---|---|
| White | 4,835,023 | 82.0% |
| Asian | 642,950 | 10.9% |
| Black or African American | 161,031 | 2.7% |
| American Indian and Alaska Native | 48,582 | 0.8% |
| Native Hawaiian and other Pacific Islander | 8,324 | 0.1% |
Source: LendingTree analysis of 2021 data from the 2022 U.S. Census Bureau Annual Business Survey.
Additional barriers make it hard for Black entrepreneurs to get businesses off the ground and sustain them. According to the Pew Research Center, the median wealth of a white household in 2021 was about nine times that of a Black household.
“That’s a staggering difference that impacts people in countless ways, including leaving less ability for Black households to take financial risks such as starting a small business,” Schulz says.
Discrimination in financial services adds another roadblock.
“It’s clear that the road to starting a small business can be bumpy for many Black Americans,” Schulz says.
39.1% of U.S. Black business owners are women
The gender divide is narrower among Black-owned businesses. Over half (61.0%) of all business owners are men, regardless of race — and 21.6% are women. But while more than half of Black-owned companies are headed by men (53.4%), women are better represented, leading 39.1% of Black-owned businesses.
“The number of businesses owned by Black women has grown significantly in recent years,” Schulz says.
According to a 2021 report from Harvard Business Review, 17% of Black women in the U.S. run a new business or are starting one. However, these companies are more likely to be sole proprietorships, according to Brookings, and only 3% of Black-women-owned businesses survive past the first five years due to barriers in accessing capital and other challenges.
Percentage of businesses by gender
| Gender | Number of businesses | Number of Black-owned businesses | % of all businesses | % of Black-owned businesses |
|---|---|---|---|---|
| Women | 1,275,523 | 62,952 | 21.6% | 39.1% |
| Men | 3,595,656 | 85,920 | 61.0% | 53.4% |
| Equally women/men | 809,939 | 12,159 | 13.7% | 7.6% |
Source: LendingTree analysis of 2021 data from the 2022 U.S. Census Bureau Annual Business Survey.
Atlanta again has highest rate of Black-owned businesses
Atlanta remains a hub for Black-owned businesses, landing the top spot two years in a row. Of the 50 metros in our study, Georgia’s capital has the highest rate of black-owned companies — 8.8% — up from 2020’s rate of 7.4%. The metro also has the second-highest number of Black-owned companies — 10,689.
But while Atlanta’s rate of Black-owned businesses beats out the other metros in our study, it’s a fractional share of the metro’s Black population — 34.2% — the fifth-highest among the 50 metros. In addition, the value of Black-owned businesses in the city of Atlanta is significantly lower than that of white-owned firms — and most have no paid employees, according to BusinessIsBlack, a local Atlanta organization providing resources and community for Black entrepreneurs.
Several programs and initiatives in the Atlanta area are working to address the disparities. The University of Georgia Small Business Development Center’s Multicultural Business Division, Atlanta Black Chambers and Atlanta Business League are just a few organizations that support and develop Black business owners in the area.
Metros with the highest rate of Black-owned businesses
| Rank | Metro | Total businesses | Black-owned businesses | % of Black-owned businesses | % of population that’s Black |
|---|---|---|---|---|---|
| 1 | Atlanta, GA | 121,872 | 10,689 | 8.8% | 34.2% |
| 2 | Washington, DC | 115,713 | 8,768 | 7.6% | 24.5% |
| 3 | Memphis, TN | 18,007 | 1,209 | 6.7% | 47.3% |
| 3 | Augusta, GA | 8,649 | 579 | 6.7% | 35.0% |
Source: LendingTree analysis of 2021 data from the 2022 U.S. Census Bureau Annual Business Survey. Note: The population data is also from the Census Bureau.
Washington, D.C., has the second-highest rate of Black-owned businesses — 7.6% — maintaining its position from 2020. The percentage of Black-owned businesses in the metro increased from 7.0% in 2020, despite a slight decrease in the area’s Black population from 25.1% in 2020 to 24.5% in 2021.
Two metros tied for third — Memphis, Tenn., and Augusta, Ga. — with a 6.7% rate of Black-owned businesses. Memphis has the second-highest Black population in our study (47.3%), rising from fifth place in our 2020 study. Augusta has a 35.0% Black population — however, due to data availability, Augusta wasn’t in our 2020 rankings. These two metros displaced Virginia Beach, Va., from third in 2020 to fifth in 2021.
Notably, the South is heavily represented in the rankings, occupying 19 of the top 20 spots.
Similarly, Portland, Ore., again has lowest rate of Black-owned businesses
The low rate is not surprising, given that only 3.0% of Portland’s population is Black — the smallest of the metros in our study. Other factors may be at play, though.
The poverty rate among Black residents in Oregon is 19.8%, according to the Oregon Black Prosperity Dashboard — significantly higher than that of white residents (11.5%). Plus, the median household income for Black Oregonians is about two-thirds that of white residents ($44,138 versus $67,331). A lower economic well-being results in less available resources to start or grow a business.
Notably, though, the percentage of Black-owned businesses in Portland did increase slightly from 0.9% in 2020.
Metros with the lowest rate of Black-owned businesses
| Rank | Metro | Total businesses | Black-owned businesses | % of Black-owned businesses | % of population that’s Black |
|---|---|---|---|---|---|
| 1 | Portland, OR | 55,034 | 599 | 1.1% | 3.0% |
| 2 | Providence, RI | 33,086 | 430 | 1.3% | 5.6% |
| 2 | Austin, TX | 45,370 | 600 | 1.3% | 7.1% |
Source: LendingTree analysis of 2021 data from the 2022 U.S. Census Bureau Annual Business Survey. Note: The population data is also from the Census Bureau.
Providence, R.I., and Austin, Texas, occupy the other bottom spots, tying for second to last. The two metros dropped from 38th and 34th, respectively, in our 2020 rankings.
Providence has the fewest Black-owned businesses of the 50 metros in our study — 430 — making up just 1.3% of the New England city’s firms. Similar to Portland, Providence has a small Black population (5.6%).
Austin’s poor ranking for its rate of Black-owned businesses is in stark contrast to its second-place finish in our study of places where Black Americans thrive. Only 600 companies in Austin are Black-owned, representing 1.3% of the city’s total businesses. The poor representation may reflect the decline in the Black population in Austin between 2018 and 2020, according to Austin’s Open Data portal.
Full rankings
Percentage of Black-owned businesses by metro
| Rank | Metro | Total businesses | Black-owned businesses | % of Black-owned businesses | % of population that’s Black |
|---|---|---|---|---|---|
| 1 | Atlanta, GA | 121,872 | 10,689 | 8.8% | 34.2% |
| 2 | Washington, DC | 115,713 | 8,768 | 7.6% | 24.5% |
| 3 | Memphis, TN | 18,007 | 1,209 | 6.7% | 47.3% |
| 3 | Augusta, GA | 8,649 | 579 | 6.7% | 35.0% |
| 5 | Virginia Beach, VA | 27,444 | 1,681 | 6.1% | 29.4% |
| 5 | Jackson, MS | 11,140 | 677 | 6.1% | 49.8% |
| 7 | St. Louis, MO | 51,085 | 3,003 | 5.9% | 16.7% |
| 8 | Richmond, VA | 25,185 | 1,419 | 5.6% | 28.4% |
| 9 | Birmingham, AL | 19,285 | 1,054 | 5.5% | 29.9% |
| 10 | Charlotte, NC | 52,435 | 2,800 | 5.3% | 22.2% |
| 11 | Baton Rouge, LA | 14,025 | 711 | 5.1% | 34.9% |
| 12 | Columbia, SC | 13,315 | 646 | 4.9% | 33.4% |
| 13 | Raleigh, NC | 28,624 | 1,349 | 4.7% | 19.0% |
| 13 | Greensboro, NC | 14,865 | 698 | 4.7% | 26.6% |
| 13 | Miami, FL | 185,273 | 8,657 | 4.7% | 19.9% |
| 16 | Durham, NC | 9,933 | 434 | 4.4% | 24.5% |
| 17 | Orlando, FL | 58,477 | 2,463 | 4.2% | 15.8% |
| 18 | New Orleans, LA | 24,788 | 1,005 | 4.1% | 33.0% |
| 19 | Charleston, SC | 17,637 | 703 | 4.0% | 24.5% |
| 20 | Houston, TX | 116,770 | 4,599 | 3.9% | 17.0% |
| 21 | Little Rock, AR | 13,349 | 482 | 3.6% | 23.8% |
| 22 | Dallas, TX | 134,933 | 4,787 | 3.5% | 16.3% |
| 22 | New York, NY | 474,965 | 16,506 | 3.5% | 15.8% |
| 24 | Philadelphia, PA | 115,990 | 3,767 | 3.2% | 20.0% |
| 24 | Milwaukee, WI | 28,687 | 916 | 3.2% | 15.7% |
| 26 | Tampa, FL | 69,053 | 2,144 | 3.1% | 11.9% |
| 27 | Detroit, MI | 79,293 | 2,414 | 3.0% | 21.4% |
| 28 | Indianapolis, IN | 35,172 | 1,007 | 2.9% | 15.3% |
| 29 | Cleveland, OH | 37,491 | 1,066 | 2.8% | 19.2% |
| 29 | Chicago, IL | 198,970 | 5,606 | 2.8% | 15.8% |
| 31 | Hartford, CT | 21,582 | 584 | 2.7% | 11.3% |
| 32 | Las Vegas, NV | 40,054 | 1,010 | 2.5% | 12.1% |
| 33 | Cincinnati, OH | 32,898 | 787 | 2.4% | 11.8% |
| 33 | Sacramento, CA | 40,514 | 966 | 2.4% | 6.8% |
| 33 | Minneapolis, MN | 74,914 | 1,786 | 2.4% | 9.1% |
| 33 | Kansas City, MO | 40,602 | 956 | 2.4% | 11.7% |
| 37 | Rochester, NY | 18,983 | 437 | 2.3% | 10.7% |
| 37 | Los Angeles, CA | 329,460 | 7,537 | 2.3% | 6.1% |
| 39 | Oklahoma City, OK | 29,021 | 611 | 2.1% | 9.1% |
| 40 | San Francisco, CA | 105,777 | 2,106 | 2.0% | 7.0% |
| 41 | Riverside, CA | 65,095 | 1,181 | 1.8% | 7.0% |
| 42 | Seattle, WA | 86,190 | 1,463 | 1.7% | 6.1% |
| 42 | Boston, MA | 100,138 | 1,695 | 1.7% | 7.4% |
| 42 | San Antonio, TX | 37,041 | 622 | 1.7% | 6.9% |
| 45 | Phoenix, AZ | 82,763 | 1,342 | 1.6% | 5.7% |
| 46 | San Diego, CA | 72,686 | 1,120 | 1.5% | 4.5% |
| 47 | Pittsburgh, PA | 42,006 | 598 | 1.4% | 7.4% |
| 48 | Austin, TX | 45,370 | 600 | 1.3% | 7.1% |
| 48 | Providence, RI | 33,086 | 430 | 1.3% | 5.6% |
| 50 | Portland, OR | 55,034 | 599 | 1.1% | 3.0% |
Source: LendingTree analysis of 2021 data from the 2022 U.S. Census Bureau Annual Business Survey. Note: The population data is also from the Census Bureau.
Nearly 3 in 10 Black-owned businesses in health care and social assistance industry
One industry stands out among the sectors represented by Black-owned businesses: health care and social assistance. Exactly 28.0% of Black-owned companies are in this field, which includes jobs in health care, social services and child care. In contrast, 11.4% of all firms (regardless of ownership) are in the health care and social assistance industry.
Another way to look at the data is that 6.7% of all health care and social assistance businesses are Black-owned — a sizable share relative to the overall representation of Black business owners.
The higher presence of Black-owned businesses in the field may be due to the industry’s growth: “There’ll always be demand for health care and social services professionals,” according to Schulz.
Another factor contributing to the high rate of Black-owned businesses in the health care and social assistance field could be the response to the pandemic, which impacted the Black community severely, Schulz says.
The second-most represented industry among Black-owned businesses is the professional, scientific and technical services industry — although it’s a distant second, accounting for 13.9% of Black-owned firms in 2021 and 2020. The sector includes jobs in legal services, accounting, design and research.
Percentage of Black-owned businesses by industry
| Industry | Total businesses | Black-owned businesses | % of all businesses | % of Black-owned businesses |
|---|---|---|---|---|
| Health care and social assistance | 669,160 | 45,015 | 11.4% | 28.0% |
| Professional, scientific and technical services | 849,531 | 22,411 | 14.4% | 13.9% |
| Administrative and support and waste management and remediation services | 363,624 | 12,470 | 6.2% | 7.7% |
| Other services (except public administration) | 404,444 | 12,468 | 6.9% | 7.7% |
| Transportation and warehousing | 218,468 | 12,154 | 3.7% | 7.5% |
| Retail trade | 636,434 | 10,312 | 10.8% | 6.4% |
| Construction | 751,314 | 10,044 | 12.7% | 6.2% |
| Accommodation and food services | 539,582 | 8,742 | 9.2% | 5.4% |
| Real estate and rental and leasing | 354,804 | 6,210 | 6.0% | 3.9% |
| Arts, entertainment and recreation | 137,996 | 5,196 | 2.3% | 3.2% |
| Finance and insurance | 237,499 | 5,080 | 4.0% | 3.2% |
| Educational services | 96,990 | 3,385 | 1.6% | 2.1% |
| Wholesale trade | 280,669 | 2,818 | 4.8% | 1.7% |
| Manufacturing | 238,175 | 2,065 | 4.0% | 1.3% |
| Information | 86,190 | 1,893 | 1.5% | 1.2% |
| Industries not classified | 13,156 | 677 | 0.2% | 0.4% |
| Management of companies and enterprises | 26,591 | 155 | 0.5% | 0.1% |
| Utilities | 6,483 | 74 | 0.1% | 0.0% |
| Agriculture, forestry, fishing and hunting | 26,145 | 70 | 0.4% | 0.0% |
| Mining, quarrying, and oil and gas extraction | 17,115 | 31 | 0.3% | 0.0% |
Source: LendingTree analysis of 2021 data from the 2022 U.S. Census Bureau Annual Business Survey.
Starting a business? Here are 4 expert tips for new Black entrepreneurs
While it’s possible to launch a business quickly and easily, sustaining and growing a business is another feat. There isn’t a single formula for becoming a successful entrepreneur, but there are best practices to follow. These tips will help you start on the right foot.
- Leverage available resources. Many resources, from training and networking to minority small business grants, are available to new entrepreneurs and business owners of color. “A simple Google search of ‘resources for Black entrepreneurs near me’ or ‘resources for Black small businesses near me’ will bring up a laundry list of potential sources of help,” Schulz says. In addition to state and local initiatives and programs, national organizations, including the U.S. Chamber of Commerce, U.S. Black Chambers Inc. and the Small Business Administration, have multiple resources to support Black business owners.
- Have a solid plan. “As eager as you may be to launch your business and as easy as it can be to get started online, it’s vital to do your homework before you launch,” Schulz says. Consider your target audience, competitors, goals, costs and more to create a business plan to help guide you in those early days. Your plan will evolve as you start and run your business; however, beginning with a well-thought-out strategy will position your business to succeed.
- Build a supportive network. The entrepreneurial journey will have many ups and downs, so developing a strong network is essential. Seek out mentors, fellow business owners, industry professionals, trade organizations and friends and family who can help provide advice, support, opportunities and encouragement along the way.
- Consider all paths to owning a business. There are various paths to becoming a business owner, including business incubator programs, business accelerators, internships, apprenticeships and more. Be open to the multiple ways you can launch a business, and you may discover an unconventional path that works for you.
Methodology
LendingTree researchers analyzed 2021 data from the 2022 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 — Baltimore and Shreveport, La., for example — aren’t in this year’s report. Others, like Augusta. Ga., are in this report despite not being in last year’s.
Data on population estimates comes from the Census Bureau 2022 American Community Survey with one-year estimates.