Even as many small businesses shuttered their doors or struggled through the pandemic, entrepreneurs in New York continued to identify and pursue new opportunities, according to an analysis by State Comptroller Thomas P. DiNapoli. New York exceeds the nation in the share of businesses that are majority female and minority-owned; however, they continue to represent less than one-quarter of all owners in New York state.
“New Yorkers have always had a great entrepreneurial spirit and drive, and that was no different even during some of the more difficult times of the pandemic,” DiNapoli said. “Policymakers should encourage small business growth, and particularly initiatives to spur entrepreneurship and foster successful businesses that reflect the diversity of our state.”
DiNapoli’s report found that for 9 out of 10 New York business owners, being their own boss and greater income potential were the primary reasons they started their business. Over 80% cited flexible hours, work-life balance and the best avenue to promote their ideas as reasons. For 72% of New York business owners, their business serves as the primary source of their income. According to data from the Kauffman Institute, the share of New York’s population that started a new business was 12th highest among states in 2021.
DiNapoli’s analysis also found:
- New York’s share of majority minority-owned firms, 26.4%, is higher than the national average (21.7%), but lower than other large, diverse states, like California, Florida and Texas. Of minority-owned businesses, the greatest share of firms nationally and in New York were Asian-owned – 17.6% in New York and 11.3% in the U.S.
- Hispanic and Black business owners are significantly underrepresented relative to their shares of New York’s population. New York’s share of Hispanic-owned firms, 5.9%, is well below the share of state population (19.5%). Rates were significantly lower for Black business ownership: 3.4% of owners compared to 14.2% of population in New York.
- New York lags the nation in the share of firms that are owned by veterans. New York’s 3.3% share of majority veteran-owned firms was the lowest among the 36 states that supplied reliable data for the survey. In contrast, the national average was 5.4%.
- New York exceeds the national average in the share of business owners that were foreign-born at 28.7% compared to 18.5% nationwide. The share of business ownership is also higher than the share of New York’s population (22.3%).
DiNapoli said promoting and expanding initiatives designed to assist small businesses, and underrepresented business owners in particular, is necessary. Empire State Development’s Division of Small Business administers critical programs that assist the business community including the Business Mentor NY program that provides free business mentorship to entrepreneurs and Entrepreneurial Assistance Centers that provide training and technical assistance to small businesses.
In addition, the state needs to ensure federal funds intended to assist small businesses under the State Small Business Credit Initiative, a federal program established in 2010 to increase access to capital for traditionally underserved small businesses, are allocated efficiently and effectively. Research indicates access to capital and other financing resources is often identified as a key reason for low rates of business ownership among women and people of color.
The New York State Common Retirement Fund makes investments intended to generate market returns consistent with the risk of private equity while supporting New York’s small businesses. The New York Credit Small Business Investment Company Fund provides credit financing to eligible New York-based companies. The Fund also invests in Pursuit, which underwrites loans to small businesses in New York. Pursuit has made 1,227 loans totaling $462 million to businesses in all 62 counties. Pursuit has an active Veteran’s Loan Program through which New York business owners who serve in the National Guard or Reserve, along with honorably discharged former active-duty members, can access small business loans. Pursuit has a goal of making at least 25% of its loans to Minority and Women-Owned Business Enterprises. As of 2023, 20% of Pursuit loans that were due to Fund investments were made to women-owned businesses and 28% were made to minority-owned businesses. The In-State Private Equity Investment Program has provided $1.7 billion to 560 New York companies since March 31, 2023.
Analysis
Economic and Policy Insights – New York State Business Owners
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