Racial Reconciliation - Minority-Owned Businesses

by: Jerry Price - Feb 6, 2006 - comment

Twenty years ago, Michele Hoskins began making pancake syrup in the basement of her parents’ Chicago home. Today, she is the owner of a multimillion-dollar minority owned business that produces a line of syrups that can be purchased in many of the nation’s larger grocery outlets. The recipe came from her great-great-grandmother, a slave who created the recipe for her owner. But the story of Michele Hoskins is more than a story about a recipe. It is the story of a determined woman who figured out how to turn the small-portion recipe into one that could be mass-produced. She also had to learn about running her own business and how to side-step racial and gender obstacles to get her product to market.

“The difficult part was really not knowing about this business, walking into large corporations trying to sell this product. And I was an African American woman, not being taken seriously. The hard part was just persevering. I had to keep going because I was on a mission,” she said.

Barrington Salmon, “Success Story Started With a Recipe,” http://www.usatoday.com , October 11, 2004 [Access fee required]

A survey of minority small business owners conducted over an 18-month period as part of the Wells Fargo/Gallup Small Business Index found the following:

More than 8 in 10 of the nation’s minority small-business owners say they are satisfied being small-business owners. Half are very or extremely satisfied, another 38 percent are somewhat satisfied, and only 13 percent say they are not too satisfied or not at all satisfied.
About 9 in 10 minority small-business owners say they feel they are successful at what they do. Thirty-six percent feel very or extremely successful being small-business owners; another 52 percent feel somewhat successful, while only 11 percent feel they are not too successful or not at all successful.
Despite all the difficulties of the past several years and the inherent challenges they face, more than 8 in 10 minority small-business owners say they would become small-business owners again instead of doing something else.

Dennis Jacobe, Small-Business Ownership Empowers Minorities (Gallup Poll), April 5, 2005 [Subscription required]

Black-Owned Businesses

There were 1.2 million black-owned businesses in 2002, up 45 percent from 1997. Their receipts were $92.7 billion, up 30 percent from 1997.
An estimated 94,862 black-owned businesses had paid employees and their receipts totaled $69.8 billion or about $735,586 per firm.
Black-owned businesses with no paid employees numbered 1.1 million, up 51 percent from 1997. They had receipts of $22.9 billion, up 54 percent from 1997. Average receipts of these businesses were $20,761 per firm.
Thirty-eight percent of black-owned firms operated in the health care and other service industries; health care and retail trade accounted for a fourth of their receipts.
A fourth of the businesses in Washington, D.C., were black-owned. Black-owned businesses accounted for between 12 and 15 percent of firms in Maryland, Georgia, Mississippi and Louisiana.

Hispanic-Owned Businesses

There were 1.6 million Hispanic-owned businesses in 2002, up 31 percent from 1997. Their receipts were $226.5 billion, up 22 percent from 1997.
A total of 199,725 Hispanic-owned businesses had paid employees and their receipts totaled $184 billion, or about $921,090 per firm.
Hispanic-owned businesses with no paid employees numbered 1.4 million, up 39 percent from 1997. They had receipts of $42.5 billion, up 54 percent from 1997. Average receipts of these businesses were $30,925 per firm.
About 40 percent of Hispanic-owned firms were in administrative and support and waste management; health care; and other service industries. Another 13 percent were in construction.
Hispanic-owned firms claimed between 15 and 22 percent of businesses in New Mexico, Texas, Florida and California.

Asian-Owned Businesses

There were 1.1 million Asian-owned businesses in 2002, up 24 percent from 1997. Their receipts were $343.3 billion, up 13 percent from 1997.
An estimated 319,911 Asian-owned businesses had paid employees and their receipts totaled $307.6 billion, or about $961,379 per firm.
Asian-owned businesses with no paid employees numbered 785,418, up 30 percent from 1997. Their receipts were $35.8 billion, up 27 percent from 1997. Average receipts of these businesses were $45,537 per firm.
About 28 percent of Asian-owned firms were in health care and other services, with another 14 percent each in professional services and retail trade.
Asian-owned firms accounted for 45 percent of businesses in Hawaii, 13 percent of firms in California and 9 percent in New York.

Native Hawaiian- and Other Pacific Islander-Owned Businesses

There were 32,299 native Hawaiian- and other Pacific islander-owned businesses in 2002, up 67 percent from 1997. Their receipts were $5.2 billion, up 26 percent from 1997.
An estimated 4,333 native Hawaiian- and other Pacific islander-owned businesses had paid employees; their receipts totaled $4.3 billion, or about $998,481 per firm.
Native Hawaiian- and other Pacific islander-owned businesses with no paid employees numbered 27,966, up 71 percent from 1997. Their receipts totaled $894 million, up 116 percent from 1997. Average receipts of these businesses were $31,981 per firm.
Native Hawaiian- and other Pacific islander-owned businesses were fairly well distributed across business sectors, with between 10 and 15 percent in each of health care; other services; administrative and support and waste management; professional services; retail trade; and construction.
Native Hawaiian- and other Pacific islander-owned businesses accounted for less than 1 percent of firms in all states except Hawaii, where 9 percent were native Hawaiian- and other Pacific islander-owned.

American Indian- and Alaska Native-Owned Businesses

There were 206,125 American Indian- and Alaska native-owned businesses in 2002, with receipts of $26.4 billion. In the 2002 survey, businesses were asked to report ownership by an American Indian tribal entity. These businesses are considered to be government-owned entities and are therefore excluded from the estimates of American Indian- and Alaska native-owned businesses. This distinction was not made in the 1997 survey, so prior data are not directly comparable.
An estimated 25,101 American Indian- and Alaska native-owned businesses had paid employees and their receipts totaled $21.2 billion, or about $847,492 per firm.
American Indian- and Alaska native-owned businesses with no paid employees numbered 181,024 with receipts of $5.1 billion. Average receipts of these businesses were $28,299 per firm.
American Indian- and Alaska native-owned firms were prevalent in many industries, with the largest concentrations in construction; retail trade; professional services; health care; and other services. Receipts were highest in retail trade and construction.
American Indian- and Alaska native-owned businesses accounted for 8 percent of firms in Alaska and about 5 percent of firms in both Oklahoma and New Mexico.

Adapted from Minority Groups Increasing Business Ownership at Higher Rate than National Average, Census Bureau Reports (U.S. Census Bureau), July 28, 2005

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