LGBT-certified businesses benefit from the supply chains of big businesses.
It may come as no surprise that states where startups traditionally thrive are also good for LGBT-owned businesses. After all, such states typically have good business networks, access to venture capital, and other forms of financing that are all important to fostering business growth.
But the National Gay & Lesbian Chamber of Commerce (NGLCC) found something else just as important is at play in the top five states for LGBT-owned small businesses: they’re being helped by much larger businesses in their area.
California, New York, Texas, Florida and Georgia contain roughly half of all businesses that have an LGBT ownership certification, according to an NGLCC report released Wednesday. While these are all top states for startups in general, they are also home to numerous Fortune 500 companies whose diversity programs encourage LGBT-certified businesses, among other minority-owned businesses, to become part of their supply chains.
“The report shows a spike in activity in some of the major cities with historically strong LGBT communities as well as corporate headquarters of early adopters of LGBT-inclusive supply chains,” says Justin Nelson, president and co-founder of NGLCC.
The NGLCC has been certifying LGBT-owned businesses since 2004. In order to qualify for LGBT certification, a business must be at least 51% owned, managed or operated by an LGBT person, and the business must be independent from a larger non-LGBT owned business.
While certified LGBT-owned businesses represent a fraction of the 1.4 million LGBT-owned businesses in the U.S.–there are only about 900 of them–these businesses punch above their weight, at least for revenues. The average revenue for a certified LGBT company is $2.5 million. By comparison, more than half of small businesses reported revenues of $1 million or less, according to the 2015 data from the National Small Business Association.