Best cities for black entrepreneurs

tashema black owned business
Tashema Johnson, who owns Purpose & Passion hair salon in Columbus, Ga.

Georgia's got a lock on black-owned businesses, according to a new report from NerdWallet.

The first-time study analyzed 111 U.S. cities (with populations over 100,000), looking at things like cost of living, percentage of black-owned businesses and their revenue, and the median income of black residents.

The Peach State is home to three of the top 10 cities: Columbus, Atlanta and Savannah.

"Georgia has a robust affluent African-American community, which is very entrepreneurial," said Bill Murphy, executive vice president of the Greater Columbus Georgia Chamber of Commerce. "People think black entrepreneurship is concentrated in Atlanta, but it extends to other cities in the state too."

To his point, Columbus, Ga., took the No. 1 spot. Over a third of the city's small businesses are black-owned. The average annual revenue is just $32,000 -- much lower than most of the other top 10 cities. But Columbus' overall score was boosted by its low cost of living.

The report didn't consider access to capital as a factor in its methodology.

Cindy Yang, small business analyst with NerdWallet, said that was deliberate. "As much as 65% of these businesses are self-funded or rely on funding from family or friends," she said.

But Harry Alford, president of the National Black Chamber of Commerce, argued that this methodology left out some important hubs.

He agreed that Atlanta is a top spot for black entrepreneurs but said cities like Houston, Chicago, New York and Los Angeles might have stronger potential because of their larger black populations and the opportunity to generate more revenue.

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Columbus, with a population of 202,000, is a big military town and home to Fort Benning.

"There are 40,000 military personnel and civilians associated with it," said Murphy. "Black-owned micro-businesses such as stores, hair salons, barber shops and restaurants are catering to them."

Tashema Johnson opened Purpose & Passion hair salon in 2009 in Columbus. Even with no prior business experience, it just took three months to get the salon up and running.

Johnson, who self-funded her business, said the city makes it easy for first-time entrepreneurs to get started.

"I've lived in Atlanta. It's a very competitive market and I probably wouldn't make as much," she said. "Columbus is a big city, but not as expensive or as competitive."

Purpose & Passion turned profitable two years ago and Johnson said she expects to hire more employees soon.

NerdWallet's Yang said Columbus' dominant industries -- aerospace and auto manufacturing, technology and tourism -- also support local small businesses.

Related: Blue collar entrepreneurs

Perhaps unsurprisingly, all 10 of NerdWallet's top cities are places where the percentage of African-American residents is higher than the national average.

Other cities in the top 10 include Montgomery, Ala., Memphis, Washington D.C., Fayetteville, N.C., Durham, N.C., Jackson, Miss. and Baltimore, Md.

Murphy said black-owned businesses have flourished in the South and will continue to do so.

"The entrepreneurial trait is part of the history and fabric of the south," he said.

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