Small Business Diversity the Atlanta Way

As we undertook reporting this Roadmap to Diversity project, we found the small businesses in one city stood apart. Atlanta’s small business community had been working longer on improving its diversity and inclusion, and had chalked up more successes, than that of any other major American city.

So how can the rest of America improve small business diversity the Atlanta way?

A confluence of efforts—including decades of initiatives by the business community and local government addressing systemic racism, a community of public, private and nonprofit entities dedicated to furthering diversity in business, an array of diversity consultants and the unsung work of countless small business leaders and employees—have contributed to the city’s diversity successes.

The numbers show the magnitude of what Atlanta has achieved.  Among the nation’s 10 largest metropolitan areas, Atlanta ranks first in the percentage of Black-owned employers (6.6%) and ranks second, after Washington, D.C., in the percentage of female-owned employers (22.4%), according to U.S. Census Bureau data.

Georgia had 46 venture capital-backed startups founded by Black women in 2017–2020—the third-highest number of any state, after New York and California, according to a recent Project Diane startup study.

As is the case nationwide, the vast majority of Atlanta’s women- and minority-owned businesses are small businesses, which the U.S. Small Business Administration (SBA) defines as companies with 500 or fewer employees. Georgia has a burgeoning small-business community, with 1.1 million small businesses, the sixth-highest number among the 50 states, according to SBA 2020 data. 

Atlanta ranked 11th in a 2021 list of the 100 best large cities in which to start a business, according to financial information site WalletHub. Georgia’s business environment ranked 9th nationwide in 2021, according to U.S. News.

The story of how Atlanta, beginning in the early 1960s, started to repudiate its racist past is legendary. Highlights include the term of Ivan Allen Jr., Atlanta’s mayor for most of that decade and a former staunch segregationist, who desegregated City Hall and became the only Southern elected official to endorse what became the 1964 U.S. Civil Rights Act. His successors would guarantee minority-owned firms a share of government contracts. And as the home of Rev. Martin Luther King Jr., the city gained a reputation for being receptive to progressive racial views.

Those developments contributed to the city’s growth, and Atlanta became a mecca for ambitious Black Americans. Among the nation’s 10 largest metro areas, Atlanta ranks first in its share of Black residents—34.2%, compared to 12.8% nationwide, according to the U.S. Census Bureau 2020 data. This community, along with the city’s array of historically Black colleges and universities, also gives Atlanta the nation’s second-largest Black urban population with a bachelor’s degree or higher. This growth in numbers and education has also brought increased political and economic power.

Under the slogan “The City Too Busy to Hate,” Atlanta promoted itself as a business-friendly locale, building what for decades was the world’s busiest airport. The city’s turn away from Jim Crow-era policies helped it grow into the only city of global stature in the heart of the former Confederacy.

As the city, county and state governments have launched agencies that develop diversity in businesses, nonprofits and academic groups have followed suit. Former employees of these groups have often set up their own diversity consultancies, helping businesses improve their diversity of employees, suppliers and customers.

That diversity, in turn, has powered broad economic growth. Atlanta had 161 companies on Inc. magazine’s 2020 list of the nation’s 5,000 fastest-growing companies, and those companies added 46,015 jobs to the local economy.

Two thousand new businesses were started per 100,000 residents in majority-Black Atlanta zip codes between March 2020 and May 2021. That figure is 33% higher than the 1,500 new businesses per 100,000 residents started across all of Metro Atlanta, Bloomberg News found. 

Nonetheless, Atlanta is far from a utopia, and even its staunchest boosters admit that much work remains to be done to create a more just society. In 2019, for instance, Bloomberg News ranked Atlanta as having more income inequality than any other major American city; Atlanta’s average income for the top 5% of households exceeded $663,000, while families in the bottom half of the population earned less than $65,000.

But much is also going right, and it’s happening in small businesses that rarely claim the headlines. This project will take you inside these companies, so you can see how Atlanta is making progress in diversifying its smallest businesses, and will show you a trick or two to help you turbocharge your own diversity efforts.

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