Black Owned Businesses Fastest Growning Segment of U.S. Economy

Black-owned firms grew faster — both in number and sales — than U.S. firms did as a whole over a five-year period, according to the latest data available from the Census Bureau.

The number of black-owned businesses increased 60% between 2002 and 2007, more than three times the growth seen among all firms, according to the Census Bureau’s business owners survey. Meanwhile, sales jumped 55%, vs. 34% for all businesses.

“Black-owned businesses continued to be one of the fastest-growing segments of our economy,” said Thomas Mesenbourg, deputy director of the Census Bureau, in a written statement.

Despite the growth, black-owned businesses in 2007 make up just 7% of U.S. businesses. Yet African-Americans comprise about 13% of the population.

Black-owned businesses tend to be smaller too: 87% of black-owned firms had sales less than $50,000, compared to 65% of all firms. And most black-owned firms have fewer than five employees.

By state, New York had the highest number of black-owned businesses (204,032), followed by Georgia (183,874) and Florida (181,437). Georgia also saw fast growth in black-owned firms, jumping 103% in five years.
8 great cities to start a business

Two other states also saw black-owned firms double in that period, although the total number of businesses remained relatively small: Maine (with 743 black-owned firms) and North Dakota (just 163).

Among large cities, New York City had the most black-owned businesses (154,929, or 8.1% of the total). But Detroit had a higher percentage of firms that are black-owned (64%).

At the same time, layoffs have inspired many African-Americans to leave the corporate world to start businesses, said Alan Hughes, editorial director of business at Black Enterprise magazine.

Also during the recession, credit dried up, hitting black-owned businesses particularly hard, said Lucy Reuben, a professor at Duke University’s Fuqua School of Business.

“There is no lack of ideas and talent,” said Reuben. But she said, “lack of capital continues to be a very, very difficult challenge for black business growth.”

The Census conducts its business owners survey every five years. It defines black-owned businesses as privately held firms in which blacks own at least 51% of the interest or stock. Preliminary results were announced this summer; the final, detailed report on black-owned businesses was released this week

On Facebook

Leave A Response

* Denotes Required Field