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Selected economic and demographic characteristics are provided for an estimated 20.5 million owners of the 16.7 million firms that responded to the 2002 Survey of Business Owners (SBO). Almost 15.0 million were owners of respondent firms with no paid employees.
The Characteristics of Business Owners: 2002 is the only report in the 2002 SBO publication series with statistics on selected economic and demographic characteristics of the owners of U.S. firms. Data aggregates are presented by gender, Hispanic or Latino origin, and race for the U.S. by 2002 North American Industry Classification System (NAICS) and by employment status and business interest. Additional statistics for the owners of both employer and nonemployer respondent firms are provided for the following:
The data in this report were compiled by combining data collected on businesses and business owners in the 2002 SBO with data collected by the main economic census and administrative records. Included are businesses that filed 2002 tax forms as individual proprietorships, partnerships, or any type of corporation, and with receipts of $1,000 or more.
Firms were asked to report information about the characteristics of up to three individuals with the largest share of ownership; additional owners were not surveyed regarding characteristics.
The CBO data are presented for all interest owners, as well as majority, equal, and nonmajority interest owners. Each owner is classified by:
The data are not directly comparable to earlier surveys (see details in the section below on Data Comparability to Prior Surveys).
Table A [xls, 21K] shows the percent of business ownership by detailed groups for all 20.5 million owners of SBO respondent firms. Table B [xls, 30K] shows the interest distribution of the owners of respondent firms by gender, Hispanic or Latino origin, and race. Detail may not add to total because a Hispanic owner may be of any race. Moreover, each owner had the option of selecting more than one race and therefore is included in each race selected.
Three million U.S. military veterans (14.5 percent of all respondent owners) held business interests in the firms that completed the 2002 SBO. Just over 66 percent of these veterans owned the majority interest in the business, compared to 26.8 percent owning equal interests, and 7.1 percent owning nonmajority interests.
There were 811 thousand veteran owners of respondent firms with paid employees and over 2.1 million veteran owners of respondent firms with no paid employees. Veterans were reported as the majority interest owners for 70 percent of employer firms and 56 percent of nonemployer firms.
Respondent firms reported that nearly 7 percent of these three million veteran business owners were disabled as the result of injury incurred or aggravated during active military service.
In 2002, 31 percent of the owners of respondent firms were over the age of 55, with 20 percent of these owners between the ages of 55 to 64, and 11 percent are 65 and over.
Twenty-nine percent of all owners of respondent firms were between 45 and 54 years old; 24 percent were between 35 and 44 years old; 12 percent were between 25 and 34 years old; and only 2 percent were under 25 years old.
Differences in age distribution also varied among owners of employer respondent firms with 32 percent of the owners between the ages of 45 to 54; 25 percent between the ages of 35 to 44; and 32 percent over the age of 55. Less than 1 percent of employer respondent business owners were under 25 years old, with 29 percent of the owners in this age group holding majority business interests, 19 percent holding equal business interests, and 53 percent holding nonmajority business interests.
Owners of nonemployer respondent firms accounted for 93 percent of those under the age of 25, and 87 percent of the owners in this age group held majority business interests. Over 73 percent of nonemployer respondent business owners between the ages of 25 to 44 held a majority interest in the business, compared to 62 percent or more of those 45 and older. Owners between the ages of 25 to 34 accounted for only 13 percent of all owners of nonemployer firms and 77 percent of owners in this age group held majority interests.
In 2002, 64 percent of the owners of respondent firms had at least some college education at the time they started or acquired ownership in their business; 23 percent had a bachelor's degree; and 17 percent had a graduate degree. A bachelor's degree was the highest college degree completed by over 20 percent of all owners of both employer firms and nonemployer firms.
Among business owners with a graduate degree, nearly 56 percent of the majority interest owners of employer firms held a Master's, Doctorate or Professional Degree, compared to 72 percent of the majority interest owners of nonemployer firms.
Just under 1-in-4 of all owners of employer firms had a high school education or less, compared to 28 percent of the owners of nonemployer firms.
When it comes to putting in long hours on the job, just over half of the owners of employer firms reported working overtime in 2002 (more than 40 hours a week, on average), compared to only 26 percent of the owners of nonemployer firms. In contrast, 63 percent of the owners of nonemployer respondent firms reported working less than 40 hours a week, compared to 33 percent of the owners of employer respondent firms.
Just over 1-in-3 business owners reported working less than 20 hours a week on average. Owners of nonemployer firms were twice as likely to work less than 20 hours a week on average than owners of firms with paid employees (40 percent and 20 percent, respectively). Seven percent of owners of all respondent firms, both employers and nonemployers, reported working no hours at all in their business.
Slightly more than half of all interest owners of respondent firms reported that their business was their primary source of income in 2002. Seventy percent of the owners of employer respondent firms reported that their business was their primary source of income in 2002, compared to 44 percent of the owners of nonemployer firms. Owners of nonemployer firms may be more likely to own a part-time business or be self-employed.
Overall, most majority interest owners (70 percent) reported that their business provided their primary source of income, compared to 79 percent of owner-operated firms with no paid employees and 54 percent of owners of firms with paid employees.
Only 23 percent of equal interest owners reported that their business provided their primary source of income.
More than half of business owners reported that their primary function(s) in the business was managing the day-to-day operations or producing their business's goods and services. Only 4-in-10 business owners reported that their primary function was financial control.
Among those business owners whose primary function is to produce the business's goods and/or services are 3-out-of-4 majority interest owners of all respondent firms, 59 percent of the majority interest owners of employer respondent firms, but over 80 percent of the majority interest owners of nonemployer respondent firms.
Managing the day-to-day operations of the business accounted for 71 percent of the majority interest owners of nonemployer firms, compared to 56 percent of the owners of employer respondent firms.
The kind-of-business data from the 2002 CB/CBO are not comparable to the 1992 CBO data due to the transition from the 1987 Standard Industrial Classification (SIC) system to the 2002 North American Industry Classification System (NAICS). Additional changes affecting data comparability are discussed in detail in Methodology, in the section titled "Comparability of the 2002 CB/CBO and 1992 CBO Data."