Atlanta Leads Nation in Black-Owned Business Share

February is Black History Month, which raises awareness of the contributions of Black Americans and the inequalities they face. These disparities extend into the business world, where Black entrepreneurs encounter significant barriers, including underrepresentation. As of 2023 — the latest available data — only 3.4% of U.S. businesses are Black-owned.

This study examines where Black-owned businesses are most and least represented across major U.S. metros and how those patterns are changing.

Key Findings

According to 2023 data, 3.4% of U.S. businesses are Black-owned. This contrasts with 80.6% that are white-owned and 11.5% that are Asian-owned. The share of Black-owned businesses is nearly identical to where it was in 2022, at 3.3%.

Atlanta remains the hub for Black-owned businesses, with 10.7% of businesses being Black-owned. Fayetteville, N.C. (9.9%), and Washington, D.C. (9.4%), rank second and third, respectively.

Salt Lake City has the lowest share of Black-owned businesses, with just 0.5%. Honolulu (0.7%) is the only other metro under 1.0%, with Boulder, Colo. (1.0%), ranking next closest.

About 1 in 4 Black-owned businesses are in the health care and social assistance industry. 26.2% of Black-owned businesses were in this industry in 2023, up from 25.6% in 2022. Professional, scientific and technical services (14.0%) and administrative and support and waste management and remediation services (8.1%) follow.

Women maintain a significant share of Black-owned businesses, but their businesses are more likely to be young. 39.3% of Black-owned businesses are owned by women. However, women are slightly more likely to have young businesses. While 24.9% of Black-owned businesses are less than 2 years old, that figure rises to 26.8% among Black women-owned businesses.

3.4% of U.S. Businesses are Black-Owned

Only 3.4% of businesses in the U.S. are Black-owned, according to 2023 data. This rate stands in stark contrast to the portion of companies owned by white and Asian Americans — 80.6% and 11.5%, respectively — and is disproportionate to the share of the U.S. Black population, which is 14.4%.

The percentage of Black-owned businesses in the country has increased in recent years. In 2020, only 2.4% of the country’s companies were Black-owned, with that percentage rising to 2.7% in 2021 and 3.3% in 2022.

The low share of Black-owned businesses partly reflects ongoing structural barriers that many entrepreneurs of color face. Research indicates that access to funding remains a central challenge: Black founders are more likely to rely on personal savings or high-interest credit because of loan-denial disparities and lower intergenerational wealth than their white counterparts.

Percentage of Businesses by Race

Source: LendingTree analysis of 2023 data from the 2024 U.S. Census Bureau Annual Business Survey.

The minimal growth in Black-owned businesses between 2022 and 2023 (0.1 percentage point) is also likely a reflection of post-pandemic economic shifts.

“High prices and high interest rates don’t just cause challenges for consumers. They’re tough on businesses and can scare aspiring entrepreneurs away from taking that next step,” says Matt Schulz, LendingTree chief consumer finance analyst.

“The growth that we saw in 2020 and the years immediately following happened, at least to some degree, because Americans had a lot more money in their pockets during that time,” Schulz says.

“They spent less because of lockdowns and other restrictions. They also received government stimulus checks, which, along with the reduced spending, made it possible for them to pay down their debts, save more money and have more expendable income for things like starting a small business.”

“Today, that’s all faded into memory, and stubborn inflation and high interest rates are making things tough on most anyone. As much as people would love to start a small business or inject more funds into their current business, it just may not be possible.”

Atlanta Continues to Have Highest Rate of Black-Owned Businesses

Atlanta has the highest share of Black-owned companies among the 100 metros analyzed. In the Georgia capital, 10.7% of companies are Black-owned — 13,091 of the metro’s 122,550 businesses — placing it first in this study for the fourth consecutive year.

Atlanta’s continued high ranking is likely tied to several structural and demographic factors. Roughly one-third (33.5%) of the metro’s population is Black, creating a larger base of potential business owners. The area also has a long history of Black economic activity, supported by strong community networks, local entrepreneurship programs and a high concentration of historically Black colleges and universities (HBCUs).

Although Atlanta continues to rank first, the share of Black-owned businesses there dipped slightly from the previous year. Though the metro’s portion of Black-owned businesses rose steadily from 7.4% in 2020 to 8.8% in 2021, peaking at 11.3% in 2022, it declined to 10.7% in 2023.

After Atlanta, Fayetteville, N.C., ranks second with 9.9% of its businesses Black-owned. The metro has placed second for two consecutive years, although its share of Black-owned businesses dipped slightly from 10.1% in 2022.

Washington, D.C., ranks third at 9.4%. The metro climbed from fifth place in the analysis last year, although its share of Black-owned businesses increased only modestly from 9.2%.

By contrast, Virginia Beach, Va., which ranked third last year with 9.4% of its businesses Black-owned, fell in both share and rank. The metro now ranks fifth at 8.8%.

Salt Lake City Has Lowest Rate of Black-Owned Businesses

Salt Lake City ranks last among the 100 metros analyzed, with just 0.5% of its companies Black-owned. Honolulu ranks second-lowest, at 0.7%, making it the only other metro — besides Salt Lake City — with a share below 1.0%. Boulder, Colo., follows closely behind, ranking third-lowest at 1.0%.

Salt Lake City placed last, with a 0.8% share of Black-owned businesses in the previous analysis. Honolulu and Boulder didn’t appear among the 100 metros with the most Black-owned businesses in last year’s study.

San Jose, Calif., had the second-lowest share of Black business owners (1.0%) in last year’s analysis, but it jumped to 91st place this year, with an increased 1.5% share of Black-owned businesses.

Full Rankings: Percentage of Black-Owned Businesses by Metro

Health Care, Social Assistance Is Top Industry for Black-Owned Businesses

In 2023, 26.2% of Black-owned businesses operated in the health care and social assistance industry. This category has consistently ranked first, accounting for 25.6% of Black-owned businesses in 2022 and 28.0% in 2021.

Professional, scientific and technical services was the second most common industry, representing 14.0% of Black-owned businesses in 2023. Administrative and support and waste management and remediation services followed at 8.1%.

Some industries remain minimally represented. The utilities sector had only 57 Black-owned businesses. Meanwhile, management of companies and enterprises had 176, accounting for just 0.1% of firms with Black owners.

Percentage of Black-Owned Businesses by Industry

39.3% of Black-Owned Businesses Are Women-Led

A substantial share of Black-owned businesses — 39.3% — are headed by women.

The rate of business ownership among Black women has increased rapidly over the past decade. Black women are more likely to self-fund their startups, and research indicates that employer businesses owned by Black women are more likely to serve as a secondary source of income.

Percentage of Black-Owned Businesses by Gender

More than half (56.5%) of Black-owned businesses are under 6 years old. 24.9% have been operating for less than two years. Black women-owned businesses are even more likely to be young, with 26.8% operating for less than two years.

Percentage of Black-Owned Businesses by Firm Age

The most prevalent revenue level for Black-owned businesses is $100,000 to $249,999, accounting for 22.8% of companies. Another 20.1% of Black-owned businesses generate $250,000 to $499,999.

Percentage of Black-Owned Businesses by Sales

Expert Tips for New Black Entrepreneurs

Experts recommend the following for aspiring Black business owners:

Seek out targeted funding and support programs. Small business grants, accelerators and loan programs designed for minority-owned businesses can provide both capital and mentorship.

Build community and professional connections. Joining networking groups, industry associations, local chambers of commerce and entrepreneur meetups can open doors to clients, partnerships and mentorship.

Build strong business credit early. Separating personal and business finances, opening a business bank account and paying vendors on time can help establish business credit.

Shop around for the best small business funding rates. Comparing rates from multiple lenders can make a difference.

Aspiring entrepreneurs should develop a business plan to guide their journey. A well-thought-out business plan can give potential small business lenders a better sense of what the company is all about.

Methodology

LendingTree researchers analyzed 2023 data from the 2024 U.S. Census Bureau Annual Business Survey to rank the metros with the highest percentage of Black-owned businesses.

Researchers compiled the number of Black-owned businesses in the 100 metros with the most Black-owned businesses and compared that number to the total number of businesses in each metro. The metros with the highest percentage of Black-owned businesses were ranked from highest to lowest.

Population data comes from the U.S. Census Bureau 2024 American Community Survey with one-year estimates.