Data shows again that minority-owned businesses and those in low-income areas in the Tampa Bay region are struggling significantly more than those in highly educated areas or owned by white counterparts.
A Tampa Bay Partnership analysis of JP Morgan Chase Institute (JPMCI) data found small businesses in majority-minority neighborhoods in the nation’s top metro areas have significantly lower profit margins and smaller cash buffers to manage business interruptions than those in majority white neighborhoods.
In areas with low educational attainment, small businesses have roughly half the profit margin and cash buffer as small businesses in areas with high educational attainment.
JPMCI recently ranked the nation’s top metro areas through an evaluation of small business cash reserves and length of time businesses would be able to weather a shutdown.
The study looked at Chase business account holders with less than $20 million in ending daily cash balances located at a single address.
The Tampa Bay Partnership analyzed data from the Tampa Bay area in the Tampa-St. Petersburg-Clearwater metro, which includes Hernando, Hillsborough, Pasco and Pinellas counties.
The analysis found more than 89% of businesses in majority Hispanic areas and nearly 95% of businesses in majority African American neighborhoods had a cash buffer of 14 days or less. In white neighborhoods, that number was less than 30%.
Nearly 70% of businesses in black neighborhoods and more than 53% in Hispanic neighborhoods had a profit margin of 10% or less, compared to just 6% in majority white areas.
Take-home pay also lags among black and hispanic families also lags with hispanic families earning 80% of the region’s white families and 78% among black families.
Black residents show an average of $906 in liquid assets, hispanics $1,140, compared to $2,735 among white residents.
Overall, Seattle, Portland and Austin topped cash buffer rankings with 40% of small businesses having at least three weeks cash on hand compared to just 30% in the Tampa Bay region.
Small businesses in Tampa Bay are 25% less likely to have cash reserves for three weeks or more compared to those top-performing metros.
Half of Tampa Bay small businesses have a cash buffer large enough to cover operating expenses for 12 days or less while half of Seattle and Portland businesses have enough to cover 18 days or more.
The research is a collaboration between the Partnership, the Community Foundation of Tampa Bay, United Way Suncoast and the University of South Florida Muma College of Business.
It’s the latest in a series of “State of the Region: COVID-19 Community Reports.”