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Analysis Examined Markets with the Highest Annual Revenue, Credit Scores and Other Factors
Biz2Credit has identified San Jose as the Best Small Business City for minority entrepreneurs in America, based on a weighted average that includes annual revenue, credit score, age of business (in months), cash flow, debt-to-income ratio, incorporation (C-Corp or LLC vs. sole proprietorship), and business owners' personal credit scores. The study defined minorities as Asian, African American and Hispanic Americans.
"San Jose is a hub for small business, but people might not immediately expect it to be a booming place for minority-owned companies," said Biz2Credit CEO Rohit Arora, one of the nation's leading experts in small business finance, who oversaw the research. According to U.S. Census Bureau statistics, Hispanics represent nearly a third of the population in San Jose, while Asians (non-Hispanic) represent just over 30 percent of the population. "Surprisingly, Denver scored very well in the study, largely because of the booming fresh produce and organic food industry, which is popular amongst minorities."
Meanwhile, despite being a popular destination for immigrants and minorities city in a thriving economy, the New York City metro area ranked only eighth in the Biz2Credit's Best Small Business Cities for minority entrepreneurs largely because of the high fixed costs of conducting business.
"While New York City is an appealing location for entrepreneurs to start a business, the reality is that high fixed and marginal costs negatively impact the bottom line of small business owners," Arora explained. According to statistics from the U.S. Census Bureau, African Americans (just over 25%) Hispanics (28.6%) and Asians (12.7%) combine to comprise the majority of New York City's population.
For this analysis, Biz2Credit defined "small businesses" as companies having fewer than 250 employees and/or less than $10 million in annual revenues. The Top 25 Cities for Small Business for minority entrepreneurs in 2014 are:
- San Jose -Santa Clara, CA
- Denver, CO
- San Diego, CA
- Riverside-San Bernardino, CA
- San Francisco-Oakland, CA
- Indianapolis, IN
- Los Angeles, CA
- New York metro area
- Atlanta, GA
- Miami-Fort Lauderdale-West Palm Beach, FL
- Las Vegas, NV
- Washington DC metro area
- Portland, OR
- Charlotte, NC
- Houston, TX
- Phoenix-Scottsdale, AZ
- Detroit, MI
- Sacramento, CA
- Chicago, IL
- Dallas-Ft. Worth, TX
- Seattle, WA
- Tampa-St. Petersburg, FL
- Philadelphia, PA
- Orlando, FL
- Jacksonville, FL
When sorted by Annual Revenue, Riverside-San Bernardino, CA was the leader. The New York metro area rounded out the bottom of the list in the top 25.
Top 25 Metro areas with the highest applications in 2013
| Top 25 Metro areas with the highest applications in 2013 | Average Annual Revenue | Average Credit Score | Average of Age in Months | Average BizAnalyzer Score |
|---|---|---|---|---|
| Riverside-San Bernardino-Ontario, CA | $1,380,613 | 608 | 41.8 | 53.8 |
| San Diego-Carlsbad, CA | $971,025 | 647 | 62.3 | 53.9 |
| Jacksonville, FL | $929,868 | 596 | 29.7 | 46.2 |
| Portland-Vancouver-Hillsboro, OR-WA | $840,692 | 642 | 40.2 | 51.0 |
| Los Angeles-Long Beach-Anaheim, CA | $827,148 | 638 | 47.1 | 52.4 |
| Denver-Aurora-Lakewood, CO | $734,761 | 640 | 56.8 | 54.3 |
| Charlotte-Concord-Gastonia, NC-SC | $705,956 | 590 | 51.9 | 50.4 |
| Indianapolis-Carmel-Anderson, IN | $610,646 | 620 | 50.7 | 52.6 |
| Chicago-Naperville-Elgin, IL-IN-WI | $596,565 | 625 | 37.4 | 49.1 |
| New York-Newark-Jersey City, NY-NJ-PA | $486,141 | 635 | 44.7 | 51.9 |
| San Jose-Sunnyvale-Santa Clara, CA | $446,395 | 665 | 69.6 | 56.8 |
| Atlanta-Sandy Springs-Roswell, GA | $427,100 | 614 | 46.0 | 51.8 |
| Miami-Fort Lauderdale-West Palm Beach, FL | $417,819 | 620 | 43.7 | 51.6 |
| San Francisco-Oakland-Hayward, CA | $390,510 | 627 | 68.1 | 52.7 |
| Seattle-Tacoma-Bellevue, WA | $388,276 | 607 | 27.5 | 48.6 |
| Houston-The Woodlands-Sugar Land, TX | $348,329 | 621 | 32.7 | 50.3 |
| Las Vegas-Henderson-Paradise, NV | $332,184 | 632 | 36.2 | 51.4 |
| Dallas-Fort Worth-Arlington, TX | $321,465 | 616 | 30.7 | 48.8 |
| Washington-Arlington-Alexandria, DC-VA-MD-WV | $280,746 | 614 | 52.8 | 51.2 |
| Phoenix-Mesa-Scottsdale, AZ | $274,277 | 626 | 46.5 | 50.1 |
| Orlando-Kissimmee-Sanford, FL | $189,049 | 609 | 26.1 | 46.8 |
| Tampa-St. Petersburg-Clearwater, FL | $168,779 | 621 | 39.4 | 48.6 |
| Sacramento--Roseville--Arden-Arcade, CA | $146,252 | 627 | 33.1 | 49.9 |
| Philadelphia-Camden-Wilmington, PA-NJ-DE-MD | $74,143 | 619 | 31.3 | 47.1 |
| Detroit-Warren-Dearborn, MI | $56,249 | 605 | 30.8 | 50.0 |
| National Average | $383,667 | 620 | 40.5 | 50.0 |
"Centers of technological innovation are booming. Cities like Portland and Jacksonville are taking advantage of their slower pace, lower costs and good standard of living offered to residents," Arora says.
When sorted by Age of Business (in months), Orlando was the leader.
Top 25 Metro areas with the highest applications in 2013
| Top 25 Metro areas with the highest applications in 2013 | Average Annual Revenue | Average Credit Score | Average of Age in Months | Average BizAnalyzer Score |
|---|---|---|---|---|
| Orlando-Kissimmee-Sanford, FL | $189,049 | 609 | 26.1 | 46.8 |
| Seattle-Tacoma-Bellevue, WA | $388,276 | 607 | 27.5 | 48.6 |
| Jacksonville, FL | $929,868 | 596 | 29.7 | 46.2 |
| Dallas-Fort Worth-Arlington, TX | $321,465 | 616 | 30.7 | 48.8 |
| Detroit-Warren-Dearborn, MI | $56,249 | 605 | 30.8 | 50.0 |
| Philadelphia-Camden-Wilmington, PA-NJ-DE-MD | $74,143 | 619 | 31.3 | 47.1 |
| Houston-The Woodlands-Sugar Land, TX | $348,329 | 621 | 32.7 | 50.3 |
| Sacramento--Roseville--Arden-Arcade, CA | $146,252 | 627 | 33.1 | 49.9 |
| Las Vegas-Henderson-Paradise, NV | $332,184 | 632 | 36.2 | 51.4 |
| Chicago-Naperville-Elgin, IL-IN-WI | $596,565 | 625 | 37.4 | 49.1 |
| Tampa-St. Petersburg-Clearwater, FL | $168,779 | 621 | 39.4 | 48.6 |
| Portland-Vancouver-Hillsboro, OR-WA | $840,692 | 642 | 40.2 | 51.0 |
| Riverside-San Bernardino-Ontario, CA | $1,380,613 | 608 | 41.8 | 53.8 |
| Miami-Fort Lauderdale-West Palm Beach, FL | $417,819 | 620 | 43.7 | 51.6 |
| New York-Newark-Jersey City, NY-NJ-PA | $486,141 | 635 | 44.7 | 51.9 |
| Atlanta-Sandy Springs-Roswell, GA | $427,100 | 614 | 46.0 | 51.8 |
| Phoenix-Mesa-Scottsdale, AZ | $274,277 | 626 | 46.5 | 50.1 |
| Los Angeles-Long Beach-Anaheim, CA | $827,148 | 638 | 47.1 | 52.4 |
| Indianapolis-Carmel-Anderson, IN | $610,646 | 620 | 50.7 | 52.6 |
| Charlotte-Concord-Gastonia, NC-SC | $705,956 | 590 | 51.9 | 50.4 |
| Washington-Arlington-Alexandria, DC-VA-MD-WV | $280,746 | 614 | 52.8 | 51.2 |
| Denver-Aurora-Lakewood, CO | $734,761 | 640 | 56.8 | 54.3 |
| San Diego-Carlsbad, CA | $971,025 | 647 | 62.3 | 53.9 |
| San Francisco-Oakland-Hayward, CA | $390,510 | 627 | 68.1 | 52.7 |
| San Jose-Sunnyvale-Santa Clara, CA | $446,395 | 665 | 69.6 | 56.8 |
| National Average | $383,667 | 620 | 40.5 | 50.0 |
In this section of the study, newer businesses (in average age) were represented at the top of the list, which indicates a higher startup rate for small businesses. "Orlando's economy generates a large percentage of business from the tourism industry, which minority entrepreneurs are becoming increasingly involved in," said Arora.
When sorted by Credit Score, San Jose was the leader. Rounding out the Top 25 was: San Diego, Portland, Denver, Los Angeles, New York metro, Las Vegas, Sacramento, San Francisco-Oakland, and Phoenix-Scottsdale.
Top 25 Metro areas with the highest applications in 2013
| Top 25 Metro areas with the highest applications in 2013 | Average Annual Revenue | Average Credit Score | Average of Age in Months | Average BizAnalyzer Score |
|---|---|---|---|---|
| San Jose-Sunnyvale-Santa Clara, CA | $446,395 | 665 | 69.6 | 56.8 |
| San Diego-Carlsbad, CA | $971,025 | 647 | 62.3 | 53.9 |
| Portland-Vancouver-Hillsboro, OR-WA | $840,692 | 642 | 40.2 | 51.0 |
| Denver-Aurora-Lakewood, CO | $734,761 | 640 | 56.8 | 54.3 |
| Los Angeles-Long Beach-Anaheim, CA | $827,148 | 638 | 47.1 | 52.4 |
| New York-Newark-Jersey City, NY-NJ-PA | $486,141 | 635 | 44.7 | 51.9 |
| Las Vegas-Henderson-Paradise, NV | $332,184 | 632 | 36.2 | 51.4 |
| Sacramento--Roseville--Arden-Arcade, CA | $146,252 | 627 | 33.1 | 49.9 |
| San Francisco-Oakland-Hayward, CA | $390,510 | 627 | 68.1 | 52.7 |
| Phoenix-Mesa-Scottsdale, AZ | $274,277 | 626 | 46.5 | 50.1 |
| Chicago-Naperville-Elgin, IL-IN-WI | $596,565 | 625 | 37.4 | 49.1 |
| Houston-The Woodlands-Sugar Land, TX | $348,329 | 621 | 32.7 | 50.3 |
| Tampa-St. Petersburg-Clearwater, FL | $168,779 | 621 | 39.4 | 48.6 |
| Indianapolis-Carmel-Anderson, IN | $610,646 | 620 | 50.7 | 52.6 |
| Miami-Fort Lauderdale-West Palm Beach, FL | $417,819 | 620 | 43.7 | 51.6 |
| Philadelphia-Camden-Wilmington, PA-NJ-DE-MD | $74,143 | 619 | 31.3 | 47.1 |
| Dallas-Fort Worth-Arlington, TX | $321,465 | 616 | 30.7 | 48.8 |
| Washington-Arlington-Alexandria, DC-VA-MD-WV | $280,746 | 614 | 52.8 | 51.2 |
| Atlanta-Sandy Springs-Roswell, GA | $427,100 | 614 | 46.0 | 51.8 |
| Orlando-Kissimmee-Sanford, FL | $189,049 | 609 | 26.1 | 46.8 |
| Riverside-San Bernardino-Ontario, CA | $1,380,613 | 608 | 41.8 | 53.8 |
| Seattle-Tacoma-Bellevue, WA | $388,276 | 607 | 27.5 | 48.6 |
| Detroit-Warren-Dearborn, MI | $56,249 | 605 | 30.8 | 50.0 |
| Jacksonville, FL | $929,868 | 596 | 29.7 | 46.2 |
| Charlotte-Concord-Gastonia, NC-SC | $705,956 | 590 | 51.9 | 50.4 |
| National Average | $383,667 | 620 | 40.5 | 50.0 |
"Small businesses located in cities that are typically associated with high startup costs, especially in the technology industry, such as San Jose, Los Angeles, New York, and San Francisco, tend to have higher credit scores," explained Arora. "They are also in the areas that have a longer track record of business success."
About the Biz2Credit Fastest Growing Small Business Cities Study
Biz2Credit analyzed 12,000 businesses with less than 250 employees and less than $10 million in annual revenues from across the country that have been in operation for more than 1 year.