Small businesses hold an important place in the American psyche. Startup founders are particularly vocal proponents of the dream to grow an idea into the next big thing. According to new research from Venture Forward, an initiative from web hosting company GoDaddy, Miami is one of the top spots in the US for microbusinesses.
There are an estimated 800,000 microbusinesses in the greater Miami area (from Miami to Pompano Beach). Our area has the highest density of microbusinesses in the US: an average of 10 per 100 people. This is followed by the San Francisco metro area at 9.2 per 100 and then Phoenix, Arizona at 9. In Miami-Dade specifically, there are 15 microbusinesses per 100 people.
Microbusinesses are defined as commercial enterprises that have fewer than 10 employees. GoDaddy is particularly well positioned to undertake this study because of the estimated 40 million microbusinesses out there, around half are customers of GoDaddy. Being able to send surveys to and collect information from this customer base enabled researchers to drill down and look at the data on a county, city, or even zip code level.
“We started this work in 2017,” Jeremy Hartman, Vice President of Venture Forward, told Refresh Miami. “For the first two years all we did was try and make sure that we understood from a modeling perspective that we were right.”
Hartman said that the project was self-interest to start: “We wanted to make sure the world understood how important our customers are.” However, the team soon realized the value of the data once they shared it with economists and policymakers, who Hartman noted “can’t see this population” in the data they typically collect.
“We went to the Commerce Department and they were saying they actually can’t get data on micro businesses because they’re too young or don’t have EIN numbers or don’t have employees,” said Hartman.
GoDaddy’s research pointed out that microbusinesses can supercharge economic growth: adding one microbusiness per 100 people increases average household incomes by $485 while reducing the unemployment rate by 0.05%. They also underscored that each new entrepreneur creates two or more jobs in their community.
The pandemic saw a particularly rapid rise in microbusinesses. Alex Rosen, Senior Director of Venture Forward and a new Miami resident [pictured at top of post], underscored that in the US overall, 17% of new micro businesses started during the pandemic. “However, in Miami, that number is 20%,” she said. “And when we’re speaking about Black entrepreneurs, that number is actually 25%.”
Rosen added that Miami is similarly unique when it comes to female entrepreneurs. Across the US, 55% of women surveyed said they started their microbusiness in 2020 or later; however, in Miami that figure rose to 63%.
On the one hand, these statistics can show the dynamism and the innovative nature of our local economy. However, the nonprofit Kauffman Foundation highlights how Miami has a higher than average percentage of “startups of survival, which are born out of necessity rather than opportunity.” What’s more, scaleups have long been a challenge area for Miami’s startup ecosystem.
Still, there are still opportunities for Miami to further promote its local microbusinesses. For instance, our area still lags behind in broadband access, with only 81.5% of homes subscribing to broadband internet compared to 90% in Washington D.C. and San Francisco. According to GoDaddy’s research, increasing broadband connectivity can further reduce unemployment.
Still, Rosen praised local leaders when it comes to supporting microbusinesses. In particular, she noted that Mayors Daniella Levine Cava and Francis Suarez are both “leading the way” in terms of microbusinesses and tech innovation. (In the year since the tweet below, microbusinesses in Miami-Dade have increased even more, to 15 microbusinesses per 100 people.)
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