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The Best & Worst States For Minority-Owned Small Businesses
Which states rank highest and lowest for racial diversity in small business ownership, both in volume and by proportion? We’ve got the answers.
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Many of the factors to be considered when deciding the best states for starting a minority-owned small business will be the same as they would for anyone else. A state’s tax climate, for instance, is of vital importance for a business owner of any background. The same can be said for a state’s regulatory climate and legal system, their available workforce and transportation. Important personal considerations—such as quality of education—will likely also be important considerations.
Yet, it’s evident that there are some states where minority-owned businesses consistently fare better than others. The underlying reasons are often subject to debate, but the facts are clear.
To gain a better understanding of the data, we’ve compiled two different “buckets” of information. The first is a straightforward listing of the states with the most and fewest minority-owned small businesses. Unsurprisingly, these rankings tend to correlate with the state’s overall population size.
10 Best & worst states for small businesses diversity
(ranked by number of minority-owned businesses)
Top 10: States with MOST
minority-owned small businesses
1,600,000 |
|
1,100,000 |
|
926,002 |
|
708,962 |
|
371,524 |
|
311,609 |
|
237,187 |
|
203,326 |
|
184,956 |
|
183,333 |
Bottom 10: States with FEWEST
minority-owned small businesses
2,350 |
|
3,180 |
|
4,075 |
|
4,096 |
|
4,330 |
|
5,575 |
|
5,769 |
|
6,107 |
|
10,585 |
|
13,680 |
In the course of our research, we decided to break down the numbers a little further. In the second segment, we looked at the number of minority-owned small businesses as a percentage of the overall number of small businesses in each state. You’ll note that some results held steady, with California, Texas and New York still ranking among the leaders. Meanwhile, states Vermont and Maine still rank at or near the bottom.
But we also found some interesting differences in the data, like Hawaii soaring to the top spot (by a lot). The District Of Columbia moved into the top five, and states like Indiana, Louisiana and Mississippi found their way into the top ten, too.
10 Best & worst states for small businesses diversity
(ranked by percentage of minority-owned businesses compared to total enterprises)
Top 10: States with highest percentage of minority-owned small businesses
57.6% |
|
42.3% |
|
41.1% |
|
41.0% |
|
39.3% |
|
38.6% |
|
35.0% |
|
33.8% |
|
29.3% |
|
28.9% |
Bottom 10: States with lowest percentage of minority-owned small businesses
2.98% |
|
3.0% |
|
4.4% |
|
4.6% |
|
4.7% |
|
4.8% |
|
5.0% |
|
5.5% |
|
6.2% |
|
6.7% |
To gain a further understanding of a state’s business environment, check out the rankings for each state’s tax climate.
Simple & Straightforward Small Business Incorporation in All 50 States
While your state may not be the cheapest to incorporate in, you may still find it more cost effective to incorporate there due to a variety of reasons. This is called home state incorporation.
MaxFilings assists entrepreneurs and businesses in all 50 states and the District of Columbia to incorporate and satisfy the requirements for their state. Our online incorporation system is secure and user-friendly, and provides upfront pricing for your state and corporate structure. You can begin forming your corporation and come back later to finish.
Check out MaxFiling’s Free Small Business Owner’s Manual for news and tips on how to incorporate your business and keep your company in good status with your particular state’s authorities. And as always, please feel free to contact us with any questions or comments about your company’s incorporation.
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