Three out of Four Small Businesses in Miami Turn a Profit Yet Many Have Limited Cash Buffers, According to New JPMorgan Chase Institute Research
New research finds that community characteristics in
“Analyzing how community characteristics – especially in vibrant, urban communities like
This report builds on previous research from the
The new report, “Small Business Financial Outcomes in Miami Communities,” finds that:
While the majority of
Miamismall businesses are profitable, many have limited cash liquidity.
Three out of four small businesses in the
Miamimetro area turn a profit and the median small business has 11 cash buffer days.
The median small business in
Miamihas fewer cash buffer days than the median business in our full sample of 25 U.S. metro areas. One-third of small businesses in Miamihave seven or fewer days of cash liquidity, and less than half of small businesses have 14 or more cash buffer days.
The median profit margin for
Miamismall businesses is 13.9 percent, which is similar to the JPMorgan Chase Institute’s broader sample of 25 U.S. metro areas.
- Three out of four small businesses in the
Small businesses in majority Black, Hispanic, and foreign-born communities in
Miamihave significantly lower profitability and cash liquidity than businesses in majority White communities. Less than 10 percent of majority Black, Hispanic, or foreign-born communities in Miamihave many very profitable small businesses (with profit margins over 20 percent), compared to 44 percent of majority White communities, and the typical small business in more than 80 percent of majority non-White communities has a cash buffer of two weeks or less.
- The typical small business had median profit margins over 20 percent in only nine percent of majority Hispanic communities, three percent of foreign-born communities, and no majority Black communities, whereas the typical small business had profit margins over 20 percent in 44 percent of majority White communities.
- While small businesses in 60 percent of majority White communities have at least two weeks of cash liquidity, just over one-in-six majority Hispanic communities have a median of at least two weeks of cash buffer.
There are also industry differences across
Miamicommunities – small businesses in majority White communities are overrepresented in high-tech services, healthcare services, other professional services, and real estate. Small businesses in communities with majority non-White populations generally have a higher share of small businesses in the construction, repair & maintenance, restaurant, and retail industries.
Overall, this report describes the financial health of Miami’s small business sector, identifying where any business growth may be contributing to Miami’s economic strength.