Where Does Your Area Rank? These Are the Best and Worst Cities for Latino Entrepreneurs
The beginning of May marks the start of National Small Business Week this year, and just in time comes the 2016 list of the best and worst places in America for Latino entrepreneurs to start up their enterprises.
Where should you start building your dream?
Hispanics are an increasingly huge driver of small business and entrepreneurship in the U.S., as well as consumer purchasing power.
The Latino community is expected to make about a third of the U.S. population by 2050, but on top of that, Latinos are already creating businesses at 15 times the national rate. According to a report by analytics firm Geoscape, the combined annual revenue of Hispanic-owned businesses has increased by $144 billion in the last three years, exceeding $661 billion total last year.
But specifics matter when starting your own business, and not every place in the country is as conducive towards Latino entrepreneurs successfully launching and growing their startups.
Ranking 150 Cities
Entrepreneurial Latinos definitely should think about somewhere other than Providence, Rhode Island, that's for sure.
The small New England city ranked last on the list of WalletHub's report on the best places for Hispanic entrepreneurs for 2016. Not only that, but Providence also ranked in last place the last time the business and finance hub conducted the same study, as Latin Post reported in 2014.
In contrast, there seems to be a lot going on in south Texas. The single best place in America for Latinos to start a business, according to this year's WalletHub study, is Laredo, Texas.
The growing Texas border town moved up in ranking in the past two years from its still-respectable third place in 2014, this year scoring over ten points above its similar, second-place rival, El Paso, Texas. Third place went to a nearby neighbor, Corpus Christi.
Analysts for WalletHub came up with a checklist of 19 key metrics, pulled from U.S. Census data, the Bureau of Labor Statistics, and a half dozen other sources, as a way to compare U.S. metropolitan areas and rank them based on how favorable the Latino entrepreneurial climate is.
Some of the metrics included an area's Hispanic small business entrepreneurship rate, education rates, and median incomes for Latinos in the area. The analysts weighed those metrics, along with other indicators like the local corporate tax rate, average length of a workday, income growth for Latino households, affordability of housing, and other business and lifestyle factors, to come up with a standard ranking value between 0 and 100.
The report ranks each city with those values split up into two major categories: Hispanic business climate and Hispanic purchasing power.
The Five Best and Five Worst
Here are the five best cities for Latino entrepreneurs to start a business in 2016:
1. Laredo, TX
2. El Paso, TX
3. Corpus Christi, TX
4. Pembroke Pines, FL
5. Baton Rouge, LA
And now, the five worst places for Latino entrepreneurship:
146. Newark, NJ
147. Philadelphia, PA
148. Worcester, MA
149. Jersey City, NJ
150. Providence, RI
Big City Blues
Most major metropolitan areas didn't fare well in the 2016 study, besides Miami, Florida, which ranked 15th due to the city being third-ranked in Latino business activity. Being nearly last in Latino purchasing power took Miami out of the top ten.
As for the country's startup hub of San Francisco and surrounding areas near Silicon Valley, that area did not rank well. San Francisco managed to slip above the 100 mark at 93rd, but smaller cities nearby in northwest California tended to rank below 100.
Other major cities like Chicago, Los Angeles, and New York all fared even worse, falling in the lowest end of the 150-city ranking.
Check out the full list here to find out how well or badly your area ranks in its Latino entrepreneurial climate.