African American-Owned Businesses on the Rise

Feb 8, 2011 6:34pm

ABC News’ Arlette Saenz reports:

The number of black-owned businesses in the U.S. increased by 60.5% to 1.9 million between 2002 and 2007, more than triple the national rate according to U.S. Census data released Tuesday.  The number of businesses across the country increased by 18% in the same amount of time.

Black-owned businesses, which are defined by the government as firms with African-American owners holding a 51% or larger stake in the business, raked in $137 billion in sales and receipts and made up 7.1% of businesses nationwide in 2007, compared to 5.2% in 2002.

But while the number of black-owned businesses surged, many of these businesses remain small.

“Many black owned firms still remain very small businesses,” Marc Morial, president of the National Urban League, said.  “87% of all black-owned firms according to the survey earn less than $50,000 dollars a year in receipts.”

The data came from the Survey of Business Owners: Black-Owned Businesses: 2007, which provides detailed information every five years for black-owned businesses, including the number of firms, sales and receipts, number of paid employees and annual payroll.

The states with the most black-owned businesses in 2007 were New York (204,032), Georgia (183,874) and Florida (181,437) making up 10.6, 9.6, and 9.4 percent respectively of black-owned businesses nationwide.

New York City was the largest city with black-owned businesses in 2007- 154,929 – followed by Chicago (58,631), Houston (33,062) and Detroit (32,490).

The Motor City had the highest percentage of businesses in its city that were black-owned at 64%.  Other cities with heavy proportions of black-owned businesses were Memphis (38%), Baltimore (35%), Atlanta (31%) and Washington, D.C. (28%)

On the state level, 28% of the District of Columbia’s businesses were black-owned.  Following D.C. were Georgia (20%), Maryland (19%), Mississippi (18%) and Louisiana (16%).

Blacked-owned businesses were prominent in health care and social assistance (19% of black-owned businesses), repair and maintenance and personal and laundry services (19% of black-owned businesses), and administrative and support and waste management and remediation services (11% of black-owned businesses) industries.

Morial touted the study’s findings and the impact it could have on fostering innovation and job creation by black-owned businesses across the country.

“It’s very important for every community in the nation that can glean from the report a profile of the black-owned firms in that city in terms of size, in terms of numbers.  I think it helps those communities develop coherent economic growth and economic development plans because while black-owned businesses remain relatively small, the fact that there’s an increase in business ownership, an increase in interest in entrepreneurship means that by focusing attention on helping black-owned businesses grow, you can create jobs and economic growth in the community.


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