Business media coverage over the last year has focused on the rise of entrepreneurship as a result of unemployment challenges. While many of the subjects interviewed typically include diverse faces, the fact is that African-Americans are not only out-pacing most other demographics in the United States when it comes to starting businesses but they began doing so several years before the recession began. In fact, earlier this week the U.S. Census Bureau released some powerful statistics that point to an interesting economic trend in our country. From 2002 to 2007, the number of black-owned businesses increased by 60.5 percent to 1.9 million, more than triple the national rate of 18.0 percent, according to the U.S. Census Bureau's Survey of Business Owners. Over the same period, receipts generated by black-owned businesses increased 55.1 percent to $137.5 billion. This is an important statistic, which demonstrates not only the interest in this demographic regarding business, but the level of business acumen involved. "Black-owned businesses continued to be one of the fastest growing segments of our economy, showing rapid growth in both the number of businesses and total sales during this time period," said Census Bureau Deputy Director Thomas Mesenbourg.
These new data come from the Survey of Business Owners: Black-Owned Businesses: 2007. The survey 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. Interestingly, in 2007, nearly four in 10 black-owned businesses operated in the health care and social assistance; and repair, maintenance, personal and laundry services sectors. The retail trade and health care and social assistance sectors accounted for 27.4 percent of black-owned business revenue.
In terms of region, New York had 204,032 black-owned businesses and accounted for 10.6 percent of the nation's black-owned businesses, followed by Georgia, with 183,874 black-owned businesses (9.6 percent) and Florida, with 181,437 (9.4 percent). Additional statistics show that of the 1.9 million black-owned businesses in 2007, 106,824 had paid employees, an increase of 13.0 percent from 2002. These businesses employed 921,032 people, an increase of 22.2 percent; their payrolls totaled $23.9 billion, an increase of 36.3 percent. Receipts from black-owned employer businesses totaled $98.9 billion, an increase of 50.2 percent from 2002.
This phenomenon doesn't seem to be fading any time soon. In fact according to Web expert and founder of Black Business Women On-line, LaShanda Henry, "I see this trend as I see my life. When I had a full-time job my entrepreneurial activities were fulfilling, but optional. When the security of employment was gone and personal responsibilities remained, entrepreneurship evolved from optional to a necessity." She continues, “We are a resilient people and as such when big businesses fell, rather than wait for a bailout, many found this to be our solution to picking up the pieces. Clearly, it’s working." Henry lends an interesting perspective given that many studies have shown that the recession actually affected demographics of color years earlier than it affected the mainstream. What remains to be analyzed, however, is the future impact of the large growth of Black business ownership on the American economy overall. As our country's economic re-structuring continues, these powerful numbers will no doubt add to the broadening concept of the face of business and perhaps even philosophical practice of American industry today.
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