For many people, owning a business is the American Dream. And for more and more entrepreneurs from underrepresented groups, setting up a business of their own has become a dream turned into reality. In growing numbers, underrepresented entrepreneurs are opening businesses across the country and helping to fuel the U.S. economy.
While small businesses in the U.S. are on the rise overall, exhibiting historic growth, minority-owned businesses in particular are experiencing a surge, according to data from the U.S. Census Bureau. Black business ownership is skyrocketing, with the share of Black households owning a business growing from 5% to 11% between 2019 and 2022 — the fastest pace in 30 years. And business ownership by Latinos increased from 7% to 10% between 2019 and 2022 — the fastest rate in a decade.
Businesses owned by members of underrepresented groups are opening all over the country. But which cities are the best places for entrepreneurs of color to own and run a business? In what areas are such businesses thriving?
To find out, SoFi looked at 50 major metro areas across the U.S. with populations of 1 million or less, and ranked them on eight different criteria, including diversity, inclusion, prosperity, and minority-owned business representation. (See below for the complete details about our methodology.)
What we discovered was that while businesses owned by underrepresented groups are in every region, certain areas of the country seem to be hotspots. Read on to learn about the 10 best metro areas for minority-owned businesses in the U.S.
Key Findings
• Southern cities are seeing increasing numbers of businesses owned by underrepresented groups. For instance, Florida has two of the top five cities on our list, including the number-one city, Cape Coral. Charleston, SC ranks at number 6, and Fayetteville, AR is number 10.
• Diverse populations are on the rise across Western states, fueling a boom in businesses owned by underrepresented groups in cities like Stockton, CA, Ogden, UT, and Colorado Springs, CO.
• Palm Bay, FL was the only city in our top 10 to earn a perfect score of 5 in three of the key categories in our rankings: racial equity, inclusion, and revenue growth for minority business owners. And Palm Bay was the only city on the entire list of 50 to score a 5 in revenue growth for minority businesses.
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The Top 10 Metros for Business Owners From Underrepresented Groups
The best metro areas for minority-owned businesses are located across the nation, as shown on the map below. These cities tend to offer a variety of programs and initiatives to encourage and assist underrepresented business owners.
1. Cape Coral, FL
This vibrant waterfront city in southwestern Florida tops our list as the best metro for minority business owners. The city’s population has grown steadily over the past few years and is becoming increasingly diverse as people flock to it for the weather, water access, and economic opportunities.
Of all the cities we analyzed, Cape Coral scores especially high for inclusion, racial equity, and business representation from underrepresented groups. The area has many resources and programs for aspiring minority business owners, including the Southwest Florida Hispanic Chamber of Commerce and Goodwill’s MicroEnterprise Program.
Cape Coral scoring:
Minority-owned business representation: 4
Business growth by minorities: 3
Immigrant share of population: 3
Revenue growth: 3
Racial equity: 4
Inclusion: 5
Prosperity: 3
Diversity: 3
Overall score: 24.30
Small Business Spotlight: Monica Spivey | Tamu Cupcakery
While the data show that Cape Coral is the best city for businesses owned by members of underrepresented groups, we wanted to go beyond the numbers and find out what it’s really like to run a business there. We spoke to Monica Spivey, the owner of Tamu Cupcakery, which specializes in creative gourmet cupcakes. Here’s what she told us about being a business owner in Cape Coral.
SoFi: How did you come up with your business idea?
Monica: After relocating to Florida from New York, I discovered my passion for baking. Experimenting with various cupcake flavors sparked the idea for Tamu Cupcakery. Encouraged by the enthusiastic feedback, I ventured into selling my creations at farmers markets. Subsequently, I joined the Goodwill MicroEnterprise program, propelling me into the realm of entrepreneurship as the proud owner of Tamu Cupcakery.
SoFi: How did you start the business?
Monica: Initially, Tamu Cupcakery debuted online before expanding to local farmers markets. Following this, I briefly showcased my desserts at the Franklin Shops in Fort Myers before finally establishing a physical storefront in 2021.
SoFi: Has the increased focus on racial inequality in the U.S. affected your business?
Monica: Being an African American female business owner has proven advantageous. Despite opening my storefront during the pandemic, sales have soared. There’s a specific demand for Black-owned businesses, and it’s been rumored that Tamu Cupcakery is the only Black-owned bakery in Cape Coral.
SoFi: What do you think could help more minorities become business owners?
Monica: Minorities embarking on entrepreneurship must conduct thorough research beforehand. Possessing discipline, focus, and strong money management skills are definite advantages in this pursuit.
SoFi: What minority-specific resources have you used to help your business?
Monica: I’ve utilized resources such as SCORE, SBA (Small Business Administration), Kiva,
and the Goodwill MicroEnterprise programs.
SoFi: How can people support your business?
Monica: You can visit us at 311 Del Prado Blvd S, shop online at www.tamucupcakery.com, leave positive Google reviews, engage with us on social media, and spread the word – we thrive on word-of-mouth recommendations.
SoFi: Are there any other minority businesses you’d recommend?
Monica: Absolutely. Please lend your support to my daughter’s clothing business, Spiff Made It, owned by Jade Spivey. Other outstanding minority-owned businesses include Jonesez BBQ, Flourish Hair Care by Monique, Sistah’s Indian Hair Closet by Shelonda, Something Blue TG by Teasha, Tobler Construction, Shop the Black Food Market by Keisha, and Mari G Solution by Marissa.
SoFi: How can we better support businesses owned by underrepresented groups?
Monica: To enhance support for minority businesses, consider spotlighting them, spreading the word through recommendations, making purchases, and offering valuable resources.
2. Boise City, ID
The capital city of Idaho, Boise is booming with new development and has recently seen an influx of residents. It was the fifth fastest-growing city in the U.S. in 2022 and 2023, and it’s projected to keep growing for the foreseeable future.
Boise has experienced an increase in racial diversity in the last decade as well, according to U.S. Census Bureau data. In our research, Boise scores high for racial equity and inclusion. To help the growth of businesses owned by underrepresented groups, the city has numerous resources for Hispanic, Native American, African-American, and Asian-American business owners.
Boise scoring:
Minority-owned business representation: 2
Business growth by minorities: 3
Immigrant share of population: 1
Revenue growth: 4
Racial equity: 5
Inclusion: 5
Prosperity: 4
Diversity: 2
Overall score: 24.10
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3. Colorado Springs, CO
Located at the foot of the Rocky Mountains, Colorado Springs is the second-biggest city in Colorado. This metro area is growing rapidly, and it’s on track to reach a population of 1 million by 2045, thanks in part to the economic opportunities available. Industries in Colorado Springs include aerospace, engineering, healthcare, IT, manufacturing, and insurance.
The city has become more diverse in recent years, and in our research it ranked highly in racial equity, inclusion, and prosperity. As a state, Colorado supports business owners from underrepresented groups: It has a Minority Business Office offering such resources as funding, grants, and networking.
Colorado Springs scoring:
Minority-owned business representation: 3
Business growth by minorities: 3
Immigrant share of population: 1
Revenue growth: 3
Racial equity: 5
Inclusion: 4
Prosperity: 4
Diversity: 3
Overall score: 23.51
4. Palm Bay, FL
Palm Bay, on the east coast of Florida, is a draw for its beaches, nature preserves, and outdoor recreation. The city’s population has increased by more than 15% since 2020 and has become increasingly racially diverse. Palm Bay’s Black and Hispanic residents now make up close to 40% of the city’s total population, and the city scores high for racial equity, revenue, and inclusion in our study. It’s business-friendly, too: Business owners from underrepresented groups can find a number of programs and services through the Florida State Minority Supplier Development Council.
Palm Bay scoring:
Minority-owned business representation: 3
Business growth by minorities: 0
Immigrant share of population: 2
Revenue growth: 5
Racial equity: 5
Inclusion: 5
Prosperity: 3
Diversity: 3
Overall score: 22.79
5. Stockton, CA
Located in the farmland of California’s Central Valley, Stockton is another growing metro area. Its central location and convenient highway access has made the city a home base for many businesses, including telecommunications and manufacturing firms, as well as the agricultural businesses the area is known for. More than 45% of Stockton’s population is Hispanic, 21% is Asian, and nearly 12% is Black. The city ranks high for minority-owned business representation, inclusion, and diversity.
Stockton scoring:
Minority-owned business representation: 4
Business growth by minorities: 1
Immigrant share of population: 4
Revenue growth: 2
Racial equity: 3
Inclusion: 5
Prosperity: 2
Diversity: 5
Overall score: 21.98
6. Charleston, SC
The biggest city in South Carolina, Charleston blends historic restoration with new development. Key industries in this Southern metro include aerospace, healthcare, automotive, defense, and technology. The city is considered pro-business, with a focus on economic development and growth. Charleston’s population has grown steadily in recent years, and it’s considered one of the fastest-growing cities in the U.S, with minorities making up about 24% of the population. The city offers programs to support minority-owned businesses, as does the state of South Carolina. In our rankings, Charleston earns high scores for business growth by underrepresented groups, racial equity, and inclusion.
Charleston scoring:
Minority-owned business representation: 2
Business growth by minorities: 4
Immigrant share of population: 1
Revenue growth: 1
Racial equity: 4
Inclusion: 4
Prosperity: 3
Diversity: 3
Overall score: 21.22
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7. Omaha, NE
Located on the Missouri River near the Iowa border, Omaha is the biggest city in Nebraska. It has a vibrant economy and a low cost of living, with job opportunities in healthcare, manufacturing, financial services, and agribusiness, among others. The city’s population has grown and become more diverse in recent years, with people from underrepresented groups making up about 30% of the residents. Nebraska has resources to support minority-owned businesses, and Omaha earns high scores for racial equity, prosperity, and inclusion.
Omaha scoring:
Minority-owned business representation: 2
Business growth by minorities: 3
Immigrant share of population: 2
Revenue growth: 2
Racial equity: 4
Inclusion: 4
Prosperity: 4
Diversity: 3
Overall score: 21.08
8. Bridgeport, CT
Connecticut’s largest city is booming. Bridgeport, which is located on Long Island Sound, draws people with its bustling downtown, numerous parks, and a strong job market. The city is culturally and ethnically diverse, and it has a Small & Minority Business Enterprise to aid and provide resources for business owners from underrepresented groups, as well as programs and initiatives aimed at “creating a level playing field for minority businesses” from the Chamber of Commerce. In our study, Bridgeport got high marks for diversity, racial equity, inclusion, and immigrant share of the population.
Bridgeport scoring:
Minority-owned business representation: 3
Business growth by minorities: 2
Immigrant share of population: 4
Revenue growth: 0
Racial equity: 4
Inclusion: 4
Prosperity: 4
Diversity: 4
Overall score: 20.86
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9. Ogden, UT
Situated north of Salt Lake City at the foot of the Wasatch Mountains, Ogden boasts hundreds of locally owned and independent businesses. This active community attracts residents with its outdoor recreation; industries such as aerospace, life sciences, tech, and manufacturing; and a bustling arts and cultural scene. Ogden’s population is growing steadily, and it’s considered one of the more diverse cities in Utah, with a 30% Hispanic population. Ogden earns high scores for minority business representation and racial equality in our analysis.
Ogden scoring:
Minority-owned business representation: 4
Business growth by minorities: 3
Immigrant share of population: 1
Revenue growth: 0
Racial equity: 5
Inclusion: 4
Prosperity: 4
Diversity: 2
Overall score: 20.76
10. Fayetteville, AR
This city, nestled in the Ozark Mountains in the northwestern section of Arkansas, is one of the fastest-growing metro areas in the country. Top employers include companies like Walmart, Tyson Foods, and colleges like the University of Arkansas. Fayetteville is becoming increasingly diverse, and minorities account for about 24% of the population. Businesses owned by members of underrepresented groups are on the rise here, and the area has programs and nonprofits to help support them, including a free Business Accelerator program that provides business training and mentorship.
Fayetteville scoring:
Minority-owned business representation: 1
Business growth by minorities: 3
Immigrant share of population: 2
Revenue growth: 2
Racial equity: 4
Inclusion: 3
Prosperity: 4
Diversity: 3
Overall score: 20.71
Rankings By Cities We Looked At
Reviewing the full list of metro areas we studied can reveal some additional information about minority-owned businesses. For instance, Syracuse, NY and Provo, UT have some of the highest minority-owned business representation scores of the cities on our list. And New Haven, CT and Worcester, MA rank well for racial equity and inclusion.
Check out how other top metro areas are doing when it comes to minority-owned businesses.
| Ranking | City | Minority-Owned Business Representation Score | Business Growth by Minorities Score | Immigrant Share of Population Score | Revenue Growth Score | Racial Equity Index Score | Inclusion Score | Prosperity Score | Diversity Index Score | Overall Score (Total possible is 40) |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Cape Coral, FL | 4 | 3 | 3 | 3 | 4 | 5 | 3 | 3 | 24.30 |
| 2 | Boise City, ID | 2 | 3 | 1 | 4 | 5 | 5 | 4 | 2 | 24.10 |
| 3 | Colorado Springs, CO | 3 | 3 | 1 | 3 | 5 | 4 | 4 | 3 | 23.51 |
| 4 | Palm Bay, FL | 3 | 0 | 2 | 5 | 5 | 5 | 3 | 3 | 22.79 |
| 5 | Stockton, CA | 4 | 1 | 4 | 2 | 3 | 5 | 2 | 5 | 21.98 |
| 6 | Charleston, SC | 2 | 4 | 1 | 1 | 4 | 4 | 3 | 3 | 21.22 |
| 7 | Omaha, NE | 2 | 3 | 2 | 2 | 4 | 4 | 4 | 3 | 21.08 |
| 8 | Bridgeport, CT | 3 | 2 | 4 | 0 | 4 | 4 | 4 | 4 | 20.86 |
| 9 | Ogden, UT | 4 | 3 | 1 | 0 | 5 | 4 | 4 | 2 | 20.76 |
| 10 | Fayetteville, AR | 1 | 3 | 2 | 2 | 4 | 3 | 4 | 3 | 20.71 |
| 11 | Albuquerque, NM | 3 | 1 | 2 | 2 | 4 | 5 | 3 | 4 | 20.32 |
| 12 | Durham, NC | 2 | 0 | 2 | 1 | 5 | 4 | 4 | 4 | 19.91 |
| 13 | North Port, FL | 4 | 2 | 2 | 1 | 4 | 4 | 3 | 3 | 19.91 |
| 14 | Lakeland, FL | 3 | 3 | 2 | 0 | 4 | 5 | 2 | 4 | 19.70 |
| 15 | Baton Rouge, LA | 2 | 2 | 1 | 4 | 3 | 4 | 2 | 3 | 19.28 |
| 16 | Augusta, GA | 2 | 2 | 1 | 2 | 4 | 4 | 2 | 3 | 19.16 |
| 17 | Greensboro, NC | 2 | 1 | 2 | 1 | 4 | 4 | 3 | 4 | 18.96 |
| 18 | Honolulu, HI | 4 | 0 | 4 | -3 | 5 | 5 | 4 | 5 | 18.91 |
| 19 | Allentown, PA | 3 | 2 | 2 | 1 | 4 | 4 | 3 | 3 | 18.86 |
| 20 | Provo, UT | 3 | 5 | 1 | -3 | 5 | 4 | 4 | 2 | 18.54 |
| 21 | Greenville, SC | 2 | 2 | 1 | 1 | 4 | 4 | 3 | 3 | 18.53 |
| 22 | Oxnard, CA | 3 | 1 | 4 | -1 | 4 | 4 | 3 | 4 | 18.52 |
| 23 | Deltona, FL | 3 | 2 | 2 | 0 | 4 | 5 | 3 | 3 | 18.28 |
| 24 | Syracuse, NY | 4 | 5 | 1 | 1 | 3 | 2 | 4 | 2 | 18.20 |
| 25 | Worcester, MA | 3 | 1 | 2 | -1 | 5 | 4 | 4 | 3 | 17.82 |
| 26 | Harrisburg, PA | 2 | 0 | 1 | 1 | 4 | 4 | 4 | 3 | 17.57 |
| 27 | El Paso, TX | 5 | 1 | 5 | 0 | 3 | 4 | 2 | 2 | 17.37 |
| 28 | Spokane, WA | 3 | 2 | 1 | -1 | 4 | 5 | 3 | 2 | 17.12 |
| 29 | Portland, ME | 3 | 3 | 1 | 1 | 4 | 3 | 4 | 1 | 16.82 |
| 30 | Toledo, OH | 3 | 2 | 1 | 1 | 4 | 3 | 3 | 3 | 16.81 |
| 31 | New Haven, CT | 2 | 2 | 3 | -3 | 4 | 4 | 4 | 4 | 16.81 |
| 32 | Little Rock, AR | 2 | 2 | 1 | 0 | 4 | 4 | 3 | 3 | 16.61 |
| 33 | Bakersfield, CA | 4 | 1 | 4 | -1 | 3 | 5 | 1 | 4 | 16.45 |
| 34 | Jackson, MS | 2 | 2 | 0 | 1 | 4 | 4 | 2 | 3 | 16.44 |
| 35 | Dayton, OH | 2 | 0 | 1 | 1 | 4 | 4 | 4 | 3 | 16.23 |
| 36 | Columbia, SC | 2 | 2 | 1 | -1 | 4 | 4 | 3 | 3 | 16.16 |
| 37 | Springfield, MA | 3 | 1 | 2 | -1 | 4 | 4 | 4 | 3 | 15.99 |
| 38 | Madison, WI | 3 | 3 | 2 | -1 | 3 | 2 | 5 | 3 | 15.71 |
| 39 | Modesto, CA | 3 | 0 | 4 | -2 | 3 | 5 | 1 | 4 | 15.42 |
| 40 | Wichita, KS | 3 | 1 | 1 | -2 | 4 | 4 | 3 | 3 | 15.30 |
| 41 | Knoxville, TN | 3 | 0 | 1 | 1 | 4 | 4 | 3 | 2 | 14.67 |
| 42 | Des Moines, IA | 2 | 3 | 2 | -3 | 4 | 2 | 4 | 3 | 14.27 |
| 43 | Chattanooga, TN | 4 | 1 | 1 | -4 | 4 | 4 | 3 | 3 | 11.73 |
| 43 | McAllen, TX | 5 | 0 | 5 | 1 | 1 | 2 | 1 | 1 | 11.08 |
Methodology
To determine the best places for businesses owned by members of underrepresented groups, SoFi looked at 50 metro areas across the U.S. with populations of 1 million or less. (Note: A few of the metros didn’t have enough data available for certain criteria and were ultimately removed from consideration in the final scores.)
We then developed a scoring system based on the eight criteria listed below. We graded each of the eight on a 5-point scale, where the top metros in each category received a score of 5. The top possible score was 40.
The following breaks down the methodology and data used for the eight criteria:
Number of Minority-Owned Businesses
Using data from the U.S. Census Bureau’s Annual Business Survey, we looked at the percentage of minority-owned businesses in each metro and compared it to the percentage of minorities in the overall population. Higher scores were given to metros that were closest to a 1:1 ratio of minority population to minority-owned businesses because it represents better minority representation in business.
Business Growth by Minority-Owned Firms
Using data from the U.S. Census Bureau’s Annual Business Survey, we looked at the number of minority-owned businesses in each metro in 2021 and compared it to the number of minority-owned businesses in 2017. Higher scores meant those metros had a higher percentage growth in minority-owned businesses from 2017 to 2021 than those with lower scores.
Immigrant Share of Population
To measure a metro’s immigrant population, we looked at data from Data USA. Metros with higher percentages of immigrants in their overall population scored higher.
Racial Equity Index Rank
Using data from the National Equity Atlas, we looked at the racial equity index, which shows how equitable a region is, based on multiple indicators including whether “communities are seeing progress on racial equity and overall prosperity.” The higher the racial equity index ranking, the higher the score.
Revenue Growth for Firms Owned by People of Color
Using data from the National Equity Atlas, we assessed the change in revenue for businesses owned by people of color. The data compared revenue amounts from 2012 to 2017, the most recent data available. The greater the increase in revenue, the better the metro scored.
Prosperity Score
Using data from the National Equity Atlas, we looked at the prosperity score, which shows how populations are faring compared to how they’re doing in other metro areas, using the following indicators:
• Median wage
• Unemployment
• Poverty
• Educational attainment
• Disconnected (not working or in school) youth
• School poverty
• Air pollution exposure
• Commute time
• Housing burden
The higher the prosperity score, the higher the score.
Inclusion Score
Using data from the National Equity Atlas, we looked at the level of inclusion in the 50 metro areas. The score given by the National Equity Atlas assessed how a specific metro area compared to other areas by looking at the racial gaps across several different indicators. The higher the inclusion score, the higher the score.
Diversity Index
Using data from the National Equity Atlas, we looked at the diversity index scores in the 50 metro areas. The diversity score is a measure of the racial/ethnic diversity of residents based on six major racial/ethnic groups. The highest-scoring metros had the most even mix of all the races listed above.
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Tips for Minority Business Owners
If you’re starting or expanding a business as an owner from an underrepresented group, these are some of the steps you can take to help make your venture a success.
• Get certified. A minority-owned business certification isn’t required, but it can help you apply for certain grants and qualify for some government benefits. You can become certified through government agencies such as the SBA’s 8(a) Business Development Program or the National Minority Supplier Development Council.
• Tap into the available resources. There are a number of government, state, and local organizations working to help minority business owners. For instance, the Minority Business Development Agency, which is part of the U.S. Department of Commerce, provides a range of services and programs, and it can also supply you with relevant research and data.
The Small Business Administration (SBA) offers programs specially for minority business owners. And finally, be sure to check into the programs and resources available from your local Chamber of Commerce as well as local minority business associations.
• Secure financing. Minority small business grants typically provide funds and opportunities and they don’t have to be repaid. You can also find grants through the SBA, which offers funding programs to start or grow your business.
Finally, you may also want to apply for a loan. SoFi makes it easy to see options for small business loans, and you can get a personalized offer in just minutes.
If you’re seeking financing for your business, SoFi can help. On SoFi’s marketplace, you can shop top providers today to access the capital you need. Find a personalized business financing option today in minutes.
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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