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The 5 States Where LGBT-Owned Businesses Are Thriving

BYJeremy Quittner
January 18, 2017, 5:36 PM UTC
York Raises The Rainbow At Pride 2016
YORK, ENGLAND - JUNE 18: A rainbow flag is flown in front of York Minster as hundreds of people take part in the annual LGBT York Pride parade on June 18, 2016 in York, England. The parade made its way through the streets of the city centre before reaching the Knavesmire area of the city where live entertainment was performed for the crowds. York Pride aims to raise awareness of lesbian, gay, bisexual and transgender (LGBT) issues both in the UK and abroad, seeking to promote equality and eliminate discrimination on the grounds of sexual orientation and gender identity. There was a two-minute silence and balloon release at the start of York Pride to pay tribute to the victims of the mass shooting that took place at LGBT nightclub Pulse in Orlando, Florida, USA. (Photo by Ian Forsyth/Getty Images)
Photo by Ian Forsyth—Getty Images

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.

Among the LGBT-friendly companies with headquarters in these states are American Airlines, JPMorgan Chase, SunTrust Bank, and Pacific Gas & Electric.

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.

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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.