Economic and business growth across the country has enabled more companies to begin generating over $1 million in revenue. Lending Tree conducted a recent analysis to see which cities across the U.S. had the strongest in $1 million business growth. When the analysis was complete, Austin, TX ranked number one for the growth of $1 million private businesses.
Private businesses that are able to move into a higher income threshold are benefiting their communities as much as their workers. Employees at companies that are able to increase pay are spending more and thus continuing to stimulate their local economies. Consequently, those regions are able to invest in developing their communities to attract larger businesses. They also continue to encourage the growth of existing businesses.
About the $1 Million Business Growth Ranking
Conducted by Lending Tree, the analysis compared the number of million-dollar privately owned businesses in 2014 with those in 2016 (the most recent year for which data is available). Their goal was to determine where owners were most successful in taking their businesses to the next level. Data for the analysis were collected from the U.S. Census Bureau’s American Survey of Entrepreneurs and limited the data to businesses with employees.
In a report that accompanied the findings, Lending Tree explained that many of the million-dollar firms are likely still in the small business category. That’s because of the U.S. Small Business Administration’s size standards. According to their standards, revenue limits for small businesses range from $750,000 to $38.5 million, depending on the industry in which the company operates.
Austin, Texas topped the list with a 15.1% increase in privately held companies surpassing $1 million in revenue between 2014 and 2016. The number of Austin firms in that category rose by 1,857.
Jacksonville, Fla. and Riverside, Calif. came in a nose behind, with an increase just under 15%. The number of firms rose by 963 and 2,359, respectively.
Buffalo, N.Y. was the only metro on our list to lose businesses with seven-figure revenues: The city in upstate New York was down by four such firms, a reduction of 0.1%.
Baltimore and Oklahoma City made the smallest gains, at just over 1%, or 187 and 117 businesses, respectively.
Los Angeles had the largest number of firms to pass the million-dollar mark – 6,664 – followed closely by New York at 6,568. Those large numbers represent increases of almost 8% and 5.2%, respectively, leaving them in the 16th and 29th spots on the list.
$1 Million Business Growth in Austin, Texas
Between 2014 and 2016, The Texas capitol saw the largest growth among private million-dollar businesses. Lending Tree analysts’ findings showed that during that time frame, 15.1% of privately owned businesses (1,857 companies) passed the $1 million revenue mark.
According to the Lending Tree report, “Austin’s small business growth and entrepreneurship have contributed to an overall healthy business climate in the metro area. And the unemployment rate in Austin — at 2.3% — is among the lowest in the country.” The report also mentioned some of the top employers in Austin include major tech companies like Dell, IBM, Apple and Amazon.
Other Top-Performing Cities
Here are the top five cities on the list, followed by their percentage and numeric gains in million-dollar businesses:
- Austin, Texas: 15.1%, 1,857
- Jacksonville: 14.8%, 963
- Riverside, California: 14.8%, 2,359
- Tampa, Florida: 14.4%, 1,902
- Portland, Oregon: 11.5%, 1,684
For the ranking, analysts compared the number of privately held employer-firms in the 50 largest metropolitan statistical areas. They focused on companies with sales and receipts of $1 million or more in 2016 with the number in 2014. The data was reported by the American Survey of Entrepreneurs conducted by the U.S. Census Bureau.
Read more about the Austin economy and business growth.