Black entrepreneurship is on the rise nationwide, but not without its challenges. Getting venture capital funding for black business owners remains a struggle—fewer than 1 percent of black founders receive funding, according to Fast Company—which leaves many unable to hire employees. Despite these challenges, Memphis has emerged as America’s top city for black-owned businesses.
Ranking the top cities
In a recent study by Blacktech Week, Memphis dethroned Atlanta and took the No. 1 spot on a ranking of the best metropolitan areas for black-owned companies after coming in at No. 3 last time around. Montgomery, Atlanta, Washington, D.C., and Savannah rounded out the rest of the top 5.
The study used data from the U.S. Census Bureau and the Kauffman Foundation’s 2017 Index of Startup Activity to identify the cities in which black-owned businesses are thriving. The results showed that compared to the Atlanta metro area, Memphis has a lower unemployment rate and a higher percentage of black-owned businesses, as well as a comparable average annual revenue.
As Memphians, we know we’ve been putting in work to make progress for minority entrepreneurs. But outsiders tend to ask, what is it that makes our city special for entrepreneurs? As it turns out, a lot of things.
- Low cost of living: Memphis enjoys a remarkably low cost of living, despite being a fairly large city. Memphis is the 23rd biggest city in the U.S., but its cost of living is roughly 12 percent below the national average. A 2015 survey also showed that folks in Memphis pay less for utilities—including gas, water and electricity—than anywhere else in the nation.
- Lots of support: As a city, our organizations want to see black-owned businesses thrive and work towards that every day. The Black Business Association of Memphis serves minority- and women-owned small businesses throughout the region, while organizations like Emerge Memphis and EpiCenter exist to encourage and support entrepreneurship in the city.
- An ideal workforce: With a strong work ethic and a median age of 35, the Memphis workforce is ready to get down to business. There are grants and programs in place to help area companies find and train workers, and the number of available employees in Memphis is expected to increase by several percentage points by 2021.
- Rock-bottom tax rates: Good news for employers and employees alike—Tennessee has the second-lowest state and local tax burden per capita in the country, with no income tax on wages. Plus, the City of Memphis and Shelby County don’t have a payroll (occupational) tax or a head tax.
- A thriving community: From Black Restaurant Week to Hattiloo Theatre, Memphis is gaining a reputation as a supportive environment for black-owned businesses, and as a city that attracts and encourages talent and ambition.
Statistics can tell us a lot, but we think Memphis has something else going for it. Call it soul, spirit, grit or determination—it’s that culture of hustle and hard work that the folks who call this city home know all too well.
Come see us sometime and experience Memphis culture for yourself! And if you’re thinking of starting a business here, be sure to check out these incentives for those seeking to locate or expand their business in Memphis.