Why Miami Is The Top City for Small Business Growth in 2019
Knocking off New York City from the top spot, Miami is No. 1 city for small business growth in 2019, according to Biz2Credit's annual rankings.
The South Florida hub was selected based on a weighted average that includes annual revenue, credit score, age of business (in months), and Biz2Credit’s proprietary BizAnalyzer score that factors in cash flow, debt-to-income ratio, taxes and other data. In its computation, the financial data of nearly 30,000 companies that applied for small business financing in 2018 were examined.
Why is Miami so hot?
It’s not just the weather.
Miami is the Gateway to Latin America for importers and exporters. The city has a diverse economy, and it is in the midst of a real estate and construction boom. It also is a hub for travel and tourism, and is the media capital of Spanish language broadcasting. Miami’s IT sector also is growing.
Tourism: With the vibrancy and excitement of Miami, tourists visit the city year-round, not just during the winter. Hotels, restaurants and nightclubs are thriving. For those looking for adventure on the high seas, Miami is also a major starting point for cruise ships.
International Trade: With its geographic location and the large influx of immigrants from Latin America, Miami has grown as an international shipping center. It is one of the busiest ports in the United States, and Miami International Airport is the top arriving point for cargo flights from South America and the Caribbean.
Media and Telecommunications: Miami is the epicenter for Spanish-language media. Television networks Univision and Telemundo have major operations there, as do Sony Music Latin and Universal Music Latin Entertainment.
Finance: Miami has a large concentration of international and domestic banks.
“We have been fortunate to service the small business community in Miami since 2000. Miami continues to offer a dynamic and friendly business climate powered by a multicultural workforce and emerging opportunities across a multitude of industries,” said Manuel Chinea, COO of Popular Bank.
“We find our small business customers in Miami area leveraging their growth opportunities by investing in expansion, talent and operational needs,” Chinea adds.
“We were able to uncover some good opportunities that allowed us to grow," said Jeison German of the Jeison German Group, a four-year-old consulting company with $1.5 million in annual revenues that provides technology and merchant services for startups, small businesses and middle market size companies. "My business is going to quadruple what we did last year.”
For the annual analysis of the top 10 centers for small business growth, Biz2Credit defined "small businesses" as companies having fewer than 250 employees or less than $10 million in annual revenues. The Top 25 Cities for Small Business in 2019 (with 2018 ranking in parenthesis) are:
1 Miami, FL (No. 3)
2 San Jose, CA (No. 2)
3 San Francisco, CA (No. 4)
4 New York, NY (No. 1)
5 San Diego, CA (No. 9)
6 Los Angeles, CA (No. 5)
7 Boston, MA (Unranked)
8 Sacramento, CA (No. 10)
9 Baltimore, MD (No. 16)
10 Washington, DC (No. 7)
Boston debuted on the list at No. 7. Several cities in the middle of the country that were not on the 2018 Top 25 ranking, climbed onto the list this year: Minneapolis (No. 15), Nashville (No. 19), and Raleigh (No. 20), Oklahoma City (No. 22), Cleveland (No. 24), and Pittsburgh (No. 25).
Boston has a lot going for it, most notably a thriving tech sector and access to an educated workforce due to the large number of prestigious colleges and universities in the area. Other cities, particularly in the South and Midwest, that benefit from lower cost structures and growing tech centers were among the other new entrants on the ranking. Meanwhile, New York dropped from No. 1 in 2018 to No. 4 in 2019.
Although New York is still booming, the cost of doing business for small business owners continues to rise. Rents continually increase, and labor costs are high and will continue to increase since New York has enacted a law to raise the minimum wage to $15. Other mandates, such as paid sick leave, hit small business owners hard. New York is becoming less and less friendly for small business owners.
The Top 10 metro areas by Annual Revenue
- New York, NY $1,273,960
- Miami, FL $1,198,424
- San Jose, CA $1,190,007
- Washington, DC $1,101,367
- San Francisco, CA $1,088,626
- Boston, MA $947,624
- Oklahoma City, OK $943,137
- Seattle, WA $900,008
- San Diego, CA $887,370
- Philadelphia, PA $882,683
New York is still the place where the revenues are highest. However, Miami is not that far behind, which is one of the major reasons it ranked No. 1 overall.
These areas of the country are thriving. Many of the small businesses in these cities service larger corporations and their employees. Their revenues are growing, they are paying their bills, and many of them are expanding. The overall economy is healthy, and we are in a time during which small businesses have the opportunity to thrive.
Published on Forbes, May 8, 2019