If you want to start your own business, location hits you as a major selling point. And for the African-American entrepreneur, the calculus is uniquely frustrating: It’s not just a matter of “Is where I live or where I’m moving to the right fit for my business?” It’s also the dark cloud of “Can I stay out of jail while driving through this town?” Stakes are higher for the black business owner than for his or her white counterpart, and the odds are stacked in a crucial way that privileged “old boys” and “new-school hipsters” don’t have to worry about.
Which leads many to automatically assume that a prime location is built on population optics. Well-known and well-branded big metropolises with active black culture, politics and money machines may enter the mind as ideal centers of black commerce and biz dev: Washington, D.C., Atlanta, Chicago, New York, Philly, Los Angeles. Basically, wherever a Real Housewives season pops up is where, naturally, many will believe that a modern black business can thrive.
According to Thumbtack’s recently released “Top 10 Cities for Black-Owned Small Businesses in America 2015,” none of these cities even showed up, much less made the A-plus cut on Thumbtack’s larger 2015 Small Business Friendliness Survey. (They did, however, make the top 10 “friendlier” cities or places where city governments are perceived as helpful to black businesses. No surprise in many cases, given their Eastern Seaboard location and huge federal-government presence.)
Still, drawing from a fairly healthy batch of 1,663 African-American respondents (all small-business owners), Thumbtack identified lesser-known spots as best for black ventures. Austin and Dallas, in Texas; Columbus, Ohio; West Palm Beach, Fla.; and Richmond, Va., were actually in the top five. Who woulda thunk?
Obviously, most on the list won’t strike folks as burgeoning hotbeds of black life. But The Root couldn’t help noticing five characteristics that make these urban up-and-comers a little better for black business than some of their bigger-city brethren:
1. Eight out of 10 of these cities are in the South. Most people probably didn’t see that coming. Yes, the South—land of Confederate holdouts, rebel-flag going-out-of-business sales and holdover Jim Crow—dominates as a region friendly to black-owned small businesses.
Of course, don’t rush to broad-brush the South as a black-entrepreneur mountaintop. It just means that a number of demographic, political and economic factors conspire to drive this reality. A long history of survival in the South shows that small-business ownership is, many times, the only recourse. “There is a stronger tradition of black business ownership and patronage in the South due to the legacy of Jim Crow economic segregation,” Global Policy Solutions’ Maya Rockeymoore told The Root.
2. Six out of 10 are in totally “red” states. We may have just handed Republicans a minority-outreach talking point: A clean 60 percent of these top 10 cities are in politically conservative states, places where both the governor and the state’s legislature are Republican. Of the seven states in the list, five—Florida, North Carolina, Ohio, Texas and Tennessee—are completely red; the other two, Missouri and Virginia, aren’t even “blue,” or have state governments split between a Democratic governor and a GOP legislature. Three of the states have present or former governors running for the Republican presidential nomination (including one who dropped out).
This doesn’t mean that red states are great for small black businesses, so therefore you should get packing. It just means that the political climate in these states—places like Florida, North Carolina, Tennessee, Texas and Virginia, where union-killing laws like right-to-work laws are in place—can force some black residents into sudden entrepreneurship, whether they want to go that route or not.
3. These cities are very active black political hubs. Black politics isn’t confined to big Northern cities. Half the cities on the list—Austin, Columbus and Richmond, along with Nashville, Tenn., and Raleigh, N.C.—are all state capitals, many with very active black state legislators. Three cities—Columbus, Richmond and Kansas City, Mo.—sport black Democratic mayors. They are also in states like Texas, Ohio, Virginia and North Carolina, with either rather sizable African-American congressional delegations (some representing these cities) or longtime black members of Congress with some clout in their respective states.
On many levels, this sort of activity has to trickle down to small black businesses at some point. “The black business class in Southern cities have been relatively more successful in leveraging their interests through the political system, resulting in government contracts and set-asides that have created a more robust base of black business capital,” according to Rockeymoore. “They have been more successful in leveraging their power to get a piece of the action on majority-led business ventures as well.”
4. There are just lots more black people there, and going back there. Take into account that, purely based on population, these cities are urban centers in states with massive black populations that tend to congregate in, well, urban areas. Every state on the Black Business Friendly Thumbtack map has a black population ranging from 13 percent (Missouri and Texas) to 23 percent (North Carolina).
More than half of these cities also contain black populations of 30 percent or more; and then there’s Richmond, with a majority-black population of 51 percent. Austin is probably the exception, at 8 percent (but remember, it’s a state capital, and there are 20 black state legislators in Texas).
We are in the midst of a huge reverse black-exodus boom back to the South (many to these cities on the Thumbtack top 10). But Rockeymoore also reminded The Root that “African Americans are a higher percentage of the population in the South and have a decent working- and middle-class base to support black businesses in many of its urban centers.”
5. Overall, they’re just business-friendly cities. Which is important to know, considering that black businesses grew from 7.1 percent of all business in 2007 to now 9.4 percent, according to the U.S. Census Bureau. At least that’s what the Mercatus Center’s Maurice McTigue attributes it to. “There are some things that remain constant regardless of size,” McTigue told The Root. “Capital investment goes to the most attractive climate it can find, which explains why many of the cities that turn up at the top of other business-friendly indexes are rated highly here. Places where there is a government culture of being friendly to business also do well.”
Charles D. Ellison is a veteran political strategist and a contributing editor at The Root. He is also Washington correspondent for the Philadelphia Tribune, a frequent contributor to The Hill, the weekly Washington insider for WDAS-FM in Philadelphia and host of The Ellison Report, a weekly public-affairs magazine broadcast and podcast on WEAA 88.9 FM Baltimore. Follow him on Twitter.