Texas is an advantageous area for black entrepreneurs to start a business, according to its No. 2 ranking on a list of the best states for black entrepreneurship. The study, in honor of Black History Month, was compiled from research by FitSmallBusiness.com and YouGov.
Texas ranked behind only Georgia. Florida, California, North Carolina, Oklahoma, Tennessee, New York, Mississippi, and Colorado complete the top ten, in that order.
Click the image for the full-size infographic. [Source: FitSmallBusiness.com]
Common denominators among states’ rankings in the top 10 were robust economic incentives, a reasonable average corporate tax rate, and a high number of black-owned businesses.
Digging into the specifics, Texas ranked No. 1 in the number of paid employees and No. 5 in the number of black-owned businesses.
The state also garnered an “opportunity share of new entrepreneurs” rating of 85 percent, which measures the percentage of founders creating a business by choice rather than necessity. And the study found that the Lone Star State has a 79 percent “startup early-survival rate.”
The rankings were created using data on financial optimism, government incentives, and overall business opportunity, Fit Small Business said. They’re based on three areas: startup climate and opportunity, economic and financial health of the region, and black-owned business success.
Black entrepreneurship in Dallas-Fort Worth
Dallas Innovates asked local entrepreneurs to weigh in on their own experiences with starting and running black-owned businesses in the state—and Dallas-Fort Worth, in particular. Tiffany Ricks, the CEO and founder of Hacware, a minority- and women-owned startup specializing in AI and cybersecurity product development, shared her perspective via email.
“The unique factors to DFW for black-owned businesses is that a few years ago, I saw other ethnic groups being vocal about including more black founders on panels, conferences, leadership lists. Now, I see this happening more organically,” Ricks told Dallas Innovates via email.
“The black community does a great job of supporting each other with purchases and customer referrals. It is also great to see other ethnic groups attending events geared to attract black businesses and talent. That shows me that we are supported and valued.”
Tiffany Ricks, founder and CEO of Hacware [Image: Rebeca Posadas-Nava]
The FitSmallBusiness study echoes this experience, finding that 53 percent of respondents believe black entrepreneurs have more opportunities in 2020 than ever before, while 39 percent reported a belief that the U.S. economy would be stronger with more opportunities for black entrepreneurs.
“Entrepreneurship is the backbone of the American economy and minority-owned businesses are no exception to that fact,” Michael De Medeiros, a FitSmallBusiness Special Projects Editor, said in a statement.
Black-owned businesses rose by 34 percent from 2007 to 2012, totaling 2.6 million companies, reports FitSmallBusiness. In 2018, black-owned companies generated $30 billion in revenue and employed more than 71,000 people.
Among the top industries for black-owned businesses are technology at No. 1, followed by manufacturing, food and beverage, construction, and media. FitSmallBusiness also noted that 50 percent of all women-owned businesses were owned by women of color.
Even still, Ricks notes there is room for improvement.
“The supplier diversity programs at companies are very biased,” Ricks said. “They are limiting African American businesses to maintenance and construction and ignore other fields. Many corporations need to educate their staff to look for black-owned suppliers in tech, hard science, and space industries.”
Opportunity is here … but “we still have a ways to go”
Dallas native and “fashionpreneur” Leah Frazier is the owner of creative marketing agency Think Three Media, a celebrity stylist (with two Emmys under her designer belt), author, fashion journalist, and model. She told Dallas Innovates that the region’s opportunities for black entrepreneurs are expanding.
“I think the environment is growing and certainly empowering as more business owners and people move to the DFW area due to the opportunity that is here,” she said in an email.
“There is a newfound camaraderie that is being birthed amongst the black entrepreneurial community and more and more initiatives being created to ensure the success of black entrepreneurs overall.”
But, Frazier agrees more can still be done.
“We still have a ways to go in terms of educating the black entrepreneurial community and leveling the playing field. There is an inclusion issue we have to overcome,” Frazier said.
“I know personally when I look at pitch competitions, I rarely see black businesses participating. At the collegiate level at many of the accelerators that I volunteer with, there are hardly any black students participating.”
Frazier continued, “We need to take a more proactive approach to encourage entrepreneurship in the community, activate the community with resources so that the black entrepreneurs are successful (i.e. business set-up, funding, etc.), and then provide resources and a community that can help these entrepreneurs continue in the face of adversity.”
Leah Frazier [Photo courtesy of Chanel Williams]
Resources for black entrepreneurs in Dallas-Fort Worth
Asked about resources for black entrepreneurs in the region, Frazier suggests plugging into the Dallas Entrepreneur Center at Redbird for events and seminars, as well as Business Lounge Dallas for networking and events. She also recommends the Black Chamber of Commerce.
Ricks noted several local organizations and meetups where black tech founders can meet other talent and find community: The Dallas Fort Worth Minority Supplier Development Council, the women of color group of the Women’s Business Council SW, Dallas Blacks in Tech Meetup, and the Dallas Chapter of the National Society of Black Engineers.
Coming soon: The 2020 Backstage Capital Tour
Another local entrepreneur, Jasmin Brand, founder of creative agency The Start, identified a new opportunity coming soon to the region. Dallas has been selected as a featured host city for the 2020 Backstage Capital Tour in May.
Dallas is the only Texas stop for the multi-city, one-day event series that will bring “knowledge, investment, and connection to underrepresented founders and the ecosystems that help them grow,” according to Brand, who is the official Dallas city lead for the tour.
“Backstage was founded by venture capitalist Arlan Hamilton and invests in startup founders who identify as a woman, person of color, and/or LGBTQ,” she said on LinkedIn.
On May 12th, Backstage will host a fireside chat with Arlan as well as an afternoon session for founders and investors that’s “followed by an evening event where six local startups will compete for a minimum $25,000 investment from Backstage,” Brand said.
“We’re also working on something EPIC for black female founders here in North Texas,” Brand hints. More information is expected in the coming weeks.
Jasmin Brand [ File photo ]
Quincy Preston and Lauren Hawkins contributed to this report.
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This content was originally published here.