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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     BOTTOM 10




Top 10: States With Most
Minority-Owned Small Businesses

California

1,600,000

Texas

1,100,000

Florida

926,002

New York

708,962

Georgia

371,524

Illinois

311,609

New Jersey

237,187

Maryland

203,326

Virginia

184,956

North Carolina

183,333

Bottom 10: States With Fewest
Minority-Owned Small Businesses

Vermont

2,350

North Dakota

3,180

Wyoming

4,075

South Dakota

4,096

Maine

4,330

Montana

5,575

West Virginia

5,769

New Hampshire

6,107

Idaho

10,585

Alaska

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     BOTTOM 10




Top 10: States With Highest Percentage of Minority-Owned Small Businesses

Hawaii

57.6%

Texas

42.3%

District Of Columbia

41.1%

California

41.0%

New Mexico

39.3%

Indiana

38.6%

Maryland

35.0%

New York

33.8%

Mississippi

29.3%

Louisiana

28.9%

Bottom 10: States With Lowest Percentage of Minority-Owned Small Businesses

Maine

2.98%

Vermont

3.0%

North Dakota

4.4%

New Hampshire

4.6%

Montana

4.7%

South Dakota

4.8%

West Virginia

5.0%

Iowa

5.5%

Wyoming

6.2%

Idaho

6.7%


To gain a further understanding of a state's business environment, check out the rankings for each state's tax climate.




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