Survey of Business Owners (SBO)

1992 Survey of Business Owners Press Releases

         
    SUMMARY OF FINDINGS______________________CHARACTERISTICS OF BUSINESS OWNERS


    =>SUMMARY OF FINDINGS

    The 1992 Characteristics of Business Owners (CBO) Survey was conducted to
    expand on the data published in the 1992 Economic Census reports: Survey of
    Minority-Owned Business Enterprises (SMOBE), MB92-1, -2, -3, and -4, and
    Survey of Women-Owned Businesses (WOB) WB92-1.

    CBO provides owner and business characteristics by race, ethnicity, gender,
    kind of business, size of business, and legal form of organization for
    individual proprietorships, partnerships, and subchapter S corporations.

    The 1992 Economic Census programs identified almost 17.3 million individual
    proprietorships, partnerships, and subchapter S corporations with sales and
    receipts of $3.3 trillion.  Table A provides summary totals of these firms
    by business ownership group based on the responses to SMOBE, WOB, and the
    Economic Census.

      Table A. Business Ownership Group:  1992

                                        Firms   Sales and Receipts
      Ownership Group                (number)         ($1,000,000)

      All businesses \1 . . . . .  17,253,143            3,324,200
      All minorities \1 . . . . .   1,965,565              202,011
        Hispanic  . . . . . . . .     771,708               72,824
        Black . . . . . . . . . .     620,912               32,197
        Other minority(API/AIAN)\2    606,426               99,709
      Women . . . . . . . . . . .   5,888,883              642,484
      Nonminority male  . . . . .  10,114,456            2,526,942

         \1  Detail does not add to total because of inclusion of some
        firms in more than one group.  Firms that were equally owned by
        two or more minorities are included in the data for each minority
        group, but counted only once at total levels.

         \2 Other minority includes Asian, Pacific Islander, American
        Indian, and Alaska Native (API/AIAN).

    The SMOBE and WOB reports show that most of these firms were concentrated
    in the service industries.  Forty-five percent of all U.S. firms, 48
    percent of the minority-owned firms, 54 percent of the firms owned by
    women, and 41 percent of the firms owned by nonminority males were
    classified as services.  Retail trade has the next largest share with 14
    percent of all U.S. firms, 16 percent of the minority-owned firms, and 19
    percent of the women-owned firms.  However, construction has the second
    largest share (15 percent) of the nonminority male-owned firms.

    These same reports show that while the nonminority male- and women-owned
    firms are spread across all States, more than half of all minority-owned
    firms are located in just four states:  California, Texas, Florida, and New
    York.  Approximately 47 percent of the minority population is concentrated
    in these four states.

    =>OWNER CHARACTERISTICS

    The 1992 CBO Survey shows that nearly 50 percent of the business owners in
    each group were between the ages of 35 and 54 years of age in 1992, and
    over half of those individuals were in the 35 to 44 year age bracket.
    Overall, 70 percent of the owners were married.  Fourteen percent of the
    owners of women-owned firms responded as veterans, compared to 31 percent
    of the owners of nonminority male-owned firms.  Forty-five percent of
    Hispanic business owners and 63 percent of API/AIAN business owners were
    not born in the United States.  The highest percentage of college graduates
    (approximately 49 percent) was among API/AIAN business owners.  Twenty-one
    percent of those same individuals completed graduate school.  The education
    and foreign born percentages for the API/AIAN group are dominated by the
    Asians and Pacific Islanders.

    =>HOME-BASED BUSINESSES

    Overall, approximately 50 percent of businesses in 1992 were home-based.
    As expected, the percentage of firms operated from a home tended to be
    higher for smaller firms.  Fifty-seven percent of businesses with receipts
    less than $25,000 in 1992 were home-based, compared to 26 percent of firms
    with receipts of $25,000 to $199,999, 16 percent of firms with receipts of
    $200,000 to $999,999, and only 5 percent of firms with receipts of
    $1,000,000 or more.

    Fifty-four percent of the individual proprietorships were home-based
    businesses in 1992.  These same statistics for small corporations and
    partnerships were considerably less with only 27 percent of those firms
    operating from a home.

    Of the home-based businesses, male-owned firms were more likely to use the
    residence to do clerical work only or to telecommute.  In contrast,
    home-based women-owned firms were more likely to use their residences to
    produce goods or services on the premises.

    =>CAPITAL REQUIREMENTS

    Information was collected separately on owners' sources of capital to start
    or acquire their businesses, and the firms' use of business loans to
    acquire startup capital.

    Owners-The majority of 1992 business owners started their enterprises with
    less than $5,000.  The highest percentage (66 percent) was among the owners
    of Black-owned firms. Owners of API/AIAN-owned firms started with the most
    capital; 10 percent of them began their businesses with $100,000 or more.
    Forty-four percent of the owners did not borrow their starting capital, but
    used money or assets of their own or from their families.

    Firms-Most firms (approximately 60 percent) reported that the businesses
    were started or acquired with no cash outlay or with less than $5,000.
    Forty-three percent of all firms did not borrow money to start or acquire
    their businesses.

    Of the firms which borrowed money, 24 to 30 percent of the partnerships and
    subchapter S corporations reported that their capital originated from
    business loans from banking or commercial lending institutions.  However,
    only 10 percent of the individual proprietorships reported that their
    borrowed capital was provided by bank loans.  Less than 1 percent of the
    businesses reported that the money borrowed was provided by
    government-guaranteed loans.

    =>OWNER'S WORK EXPERIENCE

    Sixty-six percent of the business owners stated that the business they
    owned in 1992 was the first one they had owned.  Overall, most of the
    business owners reported that they were the original founders of the
    business (approximately 69 percent).  Approximately 21 percent purchased
    their share of the business or received a transfer of ownership in the
    business.  However, for firms with $50,000 or more in receipts in 1992, the
    larger the receipts size of the firm, the less likely the business was to
    be owned by the "original founder."

    Fifty-two percent of business owners had 10 or more years of work
    experience prior to starting/acquiring their business.  However, 66 percent
    of business owners reported having no prior experience as the owner of
    another business.

    Fifty-one percent of the business owners managed or worked in their
    business the entire year.  About 35 percent of business owners averaged
    more than 40 hours per week in their business, while 36 percent worked less
    than 20 hours per week.  The percentage of business owners working less
    than 20 hours per week was highest in the finance, insurance, and real
    estate sector.  The percent of owners working part-time ranged from 46
    percent for Hispanics to 56 percent for women.  However, for firms with
    between $200,000 and $1,000,000 in sales and receipts, 59 percent of women
    business owners worked more than 40 hours per week compared to 35 percent
    of all businesses.

    =>PROFITABILITY

    In 1992, 35 percent of business owners reported that 75 percent or more of
    their total personal income was produced as a result of their business,
    while 36 percent reported that none or less than 10 percent of their income
    came from the business.

    Thirty-nine percent of businesses reported a net profit of less than
    $10,000 from their business while another 21 percent claimed a profit of
    $10,000 or more.  However, 20 percent of the businesses reported
    experiencing a net loss in 1992.

    =>WORK FORCE CHARACTERISTICS

    Hispanic-owned firms hired fewer women employees than any other group.
    Thirty-two percent of the owners of Hispanic-owned employer firms reported
    that in 1992 less than 10 percent of their employees were women.  Forty-eight
    percent of women-owned firms reported that 50 percent or more of
    their employees were women.  This compares to only 35 percent of male-owned
    firms.  Survey results indicate that minorities hire minorities.  Fourteen
    to 33 percent of the owners of minority-owned employer firms reported that
    their work force consisted of 76 to 100 percent minority employees.

    =>EXPORTS

    Nine percent of manufacturing firms reported that some sales resulted from
    exporting.  This ranged from 1 percent of Black-owned manufacturing firms
    to 11 percent of nonminority male-owned manufacturing firms.

    Seven percent of wholesale firms reported having some export sales.
    Percent of sales resulting from exports varied more widely among the
    wholesalers from 5 percent of Black-owned firms to 20 percent of
    Hispanic-owned firms and 20 percent of API/AIAN-owned firms.

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