What State Has the Most Black-Owned Businesses

What State Has the Most Black-Owned Businesses?

Published on: January 2, 2024
Last Updated: January 2, 2024

What State Has the Most Black-Owned Businesses?

Published on: January 2, 2024
Last Updated: January 2, 2024

There are millions of minority-owned businesses in America today.

In fact, as of 2020, there are roughly 1.2 million. 

Diversity among business owners in America has become very popular just as it has in the workforce.

Over 50% of all new businesses started in the United States in the last ten years were established by minorities. 

In this resource, we will be specifically addressing black owned businesses by state.

Key Statistics

  • The largest penetration of Black-owned businesses is in the Mid-Atlantic region in the United States.
  • The United States is home to over 2 million Black business owners.
  • Maryland ranks number one with 1,090 Black-owned businesses per 1 million people. 
  • Only 2.4% of all businesses in the United States are Black owned. 
  • Atlanta, Georgia has the most Black-owned businesses at 8,663.
  • In 2020, Maryland, Georgia, and DC accounted for the largest share of Black-owned businesses.
  • Texas took a decline in Black-owned businesses yet is still at number 8.
  • Portland, Oregon has the lowest rate of Black business owners. 
  • Hawaii has the highest score as the best state for minority entrepreneurs.
  • 27.5% of Black-owned businesses are in the Social Assistance and Healthcare sectors.

What State Has the Most Black-Owned Businesses?

Black Business 910

1. The Largest Penetration of Black-Owned Businesses Is in The Mid-Atlantic Region in The United States.

In the United States, the Mid-Atlantic region includes states like North Carolina (#9), Virginia (#4), and Maryland (#1). 

Each of these states has a large number of Black-owned businesses. 

Also, the southern states like Florida (#10), Tennessee (#2), Georgia (#5) and Louisiana (#6) are among some of the top ten states in America where there are most Black-owned businesses.

(Merchant Maverick)

2. The United States Is Home to Over 2 Million Black Business Owners.

According to Census data from 2020, which is the most recent we have available, the United States is home to over 2 million Black-run businesses.  

Out of these 2 million businesses, over 120,000 are considered employer firms. This means they hire employees to work.

This more recently available data will set the tone upon which we factor much of the statistics in this article.

(Fundera)

3. Maryland Ranks Number One with 1,090 Black-Owned Businesses per 1 Million People. 

Maryland has a score of 78.8 with 1,090 Black-run employer business for every one million people.

This also means that Maryland has the largest penetration of Black-owned business over all other states in the country. 

On average, the payroll of Maryland’s Black-run businesses accounts for around $420,000, which ranks eighth in the country.

Black business owners have an average yearly income of just over $70,000. 

(Merchant Maverick)

4. Only 2.4% of All Businesses in The United States Are Black Owned. 

While this data is from 2020 and it could have risen since, it hasn’t risen nearly to the over 80% of Caucasian/White owned businesses in the United States. 

This doesn’t simply measure racial disparity in the world of business ownership.

It’s also a testament to the fact that these businesses are smaller and have a lower payroll as well.

For reference, the national average payroll in this country (among all businesses) accounts for $1.27 million.

Of that, only $300,000 accounts for Black-owned businesses.

(LendingTree)

5. Atlanta, Georgia Has the Most Black-Owned Businesses at 8,663.

Black business 914

Atlanta, Georgia boasts the largest number and percentage of Black-owned businesses according to major cities in the United States. 

In Atlanta, Georgia, Black business owners account for 8,663 businesses out of a total of 116,798 businesses in the city.

Moreover, in Atlanta, the Black population accounts for 34.2% and 7.4% are business owners, according to data.

(LendingTree)

6. In 2020, Maryland, Georgia, and DC Accounted for The Largest Share of Black-Owned Businesses.

This data from Pew Research tells us that the highest concentration of Black-owned businesses accounting for over 7% across the country is in Maryland, DC (District of Columbia), and Georgia. 

This share is in relation to African American-, or Black-owned employer firms in the United States. Remember that employer firms are those that hire people to work for them. 

There are likely even more Black or African American sole proprietors’ business owners, which includes those who work for themselves and don’t hire employees.

(Pew Research) 

7. Texas Took a Decline in Black-Owned Businesses yet Is Still at Number 8.

Texas is in the top ten of states in the United States with the highest penetration of African American- and Black-owned businesses. 

In fact, it’s number 8 as of early 2023, but last year, it was in Tennessee’s current position of number 2. 

Moreover, Texas is one of the states that doesn’t charge its citizens a state tax, which is helpful with inflation as it is today.

(CW33)

8. Portland, Oregon Has the Lowest Rate of Black Business Owners. 

In contrast with the areas with the most Black-run businesses, we also have states like Portland, Oregon with the lowest rate of Black- or African American businesses. 

Portland is a major metro area in the United States, which is why this is so significant.

This data was measured against the top 50 metro cities analyzed for this study.

Also, only 3% of Oregon’s population is Black or African American according to the 2021 Census. 

(LendingTree, State of Oregon Employment Department)

9. Hawaii Has the Highest Score as The Best State for Minority Entrepreneurs.

While Hawaii didn’t make the cut in the top ten states in the United States with the most Black-owned businesses, it does make the cut in terms of being the best state (#1) for minority business owners with a score of 0.818. 

Maryland, where we see the most Black-run employer firms, also ranked second place in this list with a score of 0.712.

Finally, Maine ranks third with a score of 0.455, which is a far cry from Hawaii and Maryland. 

This score is quite different from knowing where the Black-owned businesses are found in the United States.

(Lendio)

10. 27.5% of Black-Owned Businesses Are in The Social Assistance and Healthcare Sectors.

Black business 915

The Social Assistance and Healthcare sectors account for the largest share of Black-owned businesses at 27.5% 

Second to the Healthcare and Social Assistance sectors are the Technical, Professional, and Scientific sectors with a 13.9% share of Black-run businesses. 

On the lower end, the Wholesale Trade sector accounts for only 1.4% and Educational Services at 1.8% make up Black businesses in the United States.

(Pew Research)

Conclusion

We have learned that there are over 2 million Black- or African American-owned businesses in the United States.

Surprisingly, this accounts for roughly 3% of all businesses in the country.

Moreover, we learned where the highest concentration of Black business owners resides, which is in Maryland, USA.

Also, we learned that Maryland, DC, and Delaware account for the highest penetration of African American- or Black-owned businesses per capita.

We hope you have found these statistics about Black-owned businesses in the United States interesting and useful.

We also addressed what state has the most Black-owned businesses in this data.

FAQs

What Are the Top Ten States with The Most Black-Owned Businesses?

We mentioned that there is a top ten list of where the most Black-owned businesses exist in the United States.

Here’s the most updated list we could find for 2023.

1. Maryland (up by 1 from last year)
2. Tennessee (up by 9 from last year)
3. Nevada (up by 1 from last year)
4. Virginia (down by 3 from last year)
5. Georgia (up by 3 from last year)
6. Louisiana (up by 14 from last year)
7. Indiana (up by 8 from last year)
8. Texas (down by 5 from last year)
9. North Carolina (down by 3 from last year)
10. Florida (up by 16 from last year)

As you can see, Florida and Louisiana enjoyed the most growth. 

What States Have the Highest Percentages of Black-Owned Businesses?

This data will look a bit different from the top ten states with the most Black- or African American-owned businesses, but you will see some that correlate with that list.

1. Maryland: 2.33%
2. Georgia: 2.32%
3. South Carolina: 2.07%
4 .Louisiana: 2.01%
5. Virginia: 1.85%
6. North Carolina: 1.66%
7. Delaware: 1.57%
8. Mississippi: 1.42%
9. Indiana: 1.18%
10. Nevada: 1.17%

As you can see, some of these aren’t on the top ten list, but some are.

This would be a list according to the top ten in percentage.

What Are the Challenges Facing Black-Owned Businesses in America?

Black-owned businesses are lagging behind the overall average in small businesses according to yearly payrolls.

Maine’s Black-owned businesses came the closest with a strong $680,000 in business payroll among Black-run businesses. 

For comparison, Maine’s state average annual payroll accounts for $751,000 for all businesses.

Let’s compare this with the national average annual payroll which is $1.27 million.

So, there is a sizable disparity.

Sadly, in states like Montana where the highest inequity exists, Black-owned businesses (small business) account for 9 times less than Montana’s overall average yearly payroll. 

These are the biggest challenges facing the black business community across the nation.

Sources

Merchant MaverickCW33 NewsState of Oregon Employment Department
LendingTreeLendioPew Research
Fundera

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Written by Kelly Indah

I’m a statistics researcher here at EarthWeb with a special interest in privacy, tech, diversity, equality and human rights. I have a master’s degree in Computer Science and I have my Certified Information Systems Security Professional (CISSP) certification.