Study IDs Twin Cities As Among Worst For Hispanic Entrepreneurs
Good luck starting a business in the Twin Cities if you’re Hispanic, or so says a report ranking both Minneapolis and St. Paul among the worst big cities for entrepreneurs from the fast-growing ethic group.
According to WalletHub, a personal finance-based social network, Minneapolis is one of the 10 worst cities for Hispanic entrepreneurs, ranking 141st out of the country’s 150 largest cities studied. St. Paul didn’t fare much better, coming in at 134th overall.
In 2013, 3.1 million Hispanics owned businesses in the U.S., which the U.S. Hispanic Chamber of Commerce says brought in an estimated $486 billion in revenue. The number of minority-owned businesses in Minnesota climbed 43 percent from 2002 and 2007, but still represented just 6 percent of all of the state’s businesses.
In its report released this week, WalletHub ranked cities across two key dimensions: Hispanic purchasing power and business friendliness. Minneapolis ranked 135th and 131st, respectively, in those categories, while St. Paul came in at 98th and 136th.
To compute purchasing power, WalletHub looked at metrics like cost of living, income growth and affordability, and analyzed the number of Hispanic-owned firms adjusted for Hispanic population and firms’ survival rate, among other factors, to determine a business friendliness ranking.
The report, WalletHub says, was intended to “help aspiring Hispanic entrepreneurs find the most fertile ground from which to grow their enterprises.”
Since January 2011, the Metropolitan Economic Development Association (MEDA) has surveyed clients representative of the minority-owned companies it works with each year to create a report card on how such businesses are performing.
“Overall entrepreneurs of color have a narrower asset base to begin with, which makes it extremely important to look to the future and surmount any obstacles or challenges in advance,” said Jan Jordet, MEDA’s senior director of economic and consulting services.
WalletHub’s study isn’t the first to paint an unsavory picture of the business climate the state has to offer minorities. According to the Minneapolis Foundation in 2013, Minnesota’s gap between white and black employment is one of the country’s largest. In Minneapolis, people of color made up 40 percent of its population last year but held just 17 percent of the jobs. (That’s interesting.)
“Right now we’re at a tipping point where the importance of a diverse population and diverse business ownership is a key to our future success,” Jordet said.