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In the Information Age, when it’s possible to communicate instantly around the globe, it might seem anachronistic to suggest that one geographic location is better than another to start a business. But a national study is analyzing the hottest and fastest growing regional markets for minority-owned small businesses.
Thomas D. Boston of the Ivan Allen College, School of Economics at Georgia Institute of Technology in Atlanta heads the team of economists and researchers responsible for conducting the study. Boston explains the report is the culmination of about 350 African American business owners in various regions and industries examining entrepreneurial trends over the last five years. Boston says his group is currently in the process of enhancing the study to include specific cities as opposed to just regions. Based on the study, technology is hot throughout the country with the Midwest, South, West, and Northeast checking in as the top regions.
The study, slated to be released by the end of the year, has not yet concluded which areas are most profitable for African American businesses.
So what makes a region hot for small businesses? In some cases, there’s a boom in industries as a result of corporate outsourcing or workforce reductions in the marketing and public relations sectors. Increased government spending — which is often the case within the technology and construction sectors — can also be factors. And with rising pressure on government agencies to increase the number of contracts granted to minority- and women-owned businesses, opportunities abound. Other factors include subcontracting opportunities from large businesses and a diverse and skilled workforce population.
Boston, a member of the BLACK ENTERPRISE Board of Economists, says the findings reflect the current trend of the nation’s economy and the continued interest in computer software, technology, and communication sectors. Entrepreneurs, Boston says, are launching their businesses in increasing numbers in these sectors. “African Americans are starting businesses in the most popular industries and in the regions of the country that will enable their businesses to grow and prosper,” he says. Though the tech wreck shook many corporate giants, it remains a viable industry for the entrepreneur.
Martin Burrell, vice president of minority affairs at the American Airlines Center in Dallas, home of the Dallas Stars and Mavericks, says the results from Boston’s study are not surprising. Burrell is the senior executive in charge of ensuring that minority-owned firms get a fair share of the lucrative construction and service contracts at the center.
Burrell, who has held his position since 1998, says the boom in minority-owned businesses in the region is obvious and has been apparent for several years. For example, developers’ contracts with the city require that women- and minority-owned companies get nearly one third of the work.
Although location is important, it’s not the only factor, warns James Frommel, chairman of the Service Corps of Retired Executives (SCORE), a small business counseling and education program partnering with the Small Business Administration. He says that while locale and tapping a niche market can sink or sail a small business, other issues