2002 Survey of Business Owners: Black-Owned Firms
April 18, 2006
Remarks of Valarie Strang
Project Manager, 2002 Survey of Business Owners
Good morning everyone.
Last July, the Census Bureau released Preliminary Estimates of Business Ownership by Gender, Hispanic or Latino Origin, and Race from the 2002 Survey of Business Owners. Just last month, we released the final estimates for Hispanic-owned businesses. Today, we are proud to release the final estimates for black-owned firms at much more detailed levels than those published last year.
ALL BLACK-OWNED FIRMS (FIRMS WITH AND WITHOUT PAID EMPLOYEES)
The results show that the number of black-owned businesses increased 45 percent from 1997 to 2002, more than 4 times the national average. Receipts for black-owned firms rose 25 percent over the same five year period, slightly higher than the 22 percent increase for all U.S. firms.
In 2002, there were nearly 1.2 million black-owned firms operating in the U.S., employing more than 756,000 people and generating nearly $89 billion in revenues.
Black-owned firms accounted for 5 percent of the nation’s 23 million nonfarm businesses, 1 percent of all employees, and 0.4 percent of the $23 trillion in receipts for all U.S. businesses.
KIND OF BUSINESS
Nearly 4-in-10 black-owned businesses in 2002 operated in health care and social assistance, and other services, such as personal services, and repair and maintenance. These industries were followed by administrative and support, waste management and remediation services; professional, scientific and technical services; and retail trade.
Of all black-owned firms in 2002, retail trade generated the most revenue--$13.6 billion. Health care and social assistance, and construction together with retail trade accounted for 39.3 percent of all Black-owned business revenue.
FIRMS WITH PAID EMPLOYEES
Eight percent of all Black-owned firms operated as employer businesses in 2002, increasing in number from 93,235 in 1997 to 94,585 in 2002. Although the number of employer firms increased by only 1 percent in the five year period, the number of workers hired by these businesses increased by 5 percent, and the revenue increased 17 percent from $56 billion to $66 billion.
This compares to a 4 percent increase in the number of all employer firms, a 7 percent increase in the total number of workers in the U.S., and a 22 percent increase in revenue for all employer firms.
Florida, California and New Jersey accounted for the largest increases in number of employees between 1997 and 2002.
Florida -- 24,618 more workers
California -- 11,141 more workers
New Jersey – 9,611 more workers
Accommodation and food services averaged 18 employees per firm; manufacturing averaged 15 employees per firm, and administrative and support and waste management and remediation services averaged 14 employees per firm.
The average receipts for black owned employer firms were $697,084.
The industries accounting for the largest share of receipts for employer firms included retail trade ($11.6 billion); health care and social assistance ($8.4 billion); construction ($7.5 billion); and professional, scientific, and technical services ($7.1 billion).
FIRMS WITH NO PAID EMPLOYEES
The vast majority (92 percent) of black-owned businesses in 2002 operated without paid employees. These sole proprietorships and mom and pop businesses increased by 372,815 to reach 1.1 million. That’s a 51 percent increase, more than 4 times the national average of 12 percent.
Black-owned firms with no paid employees took in more than $22.9 billion, a 54 percent increase since 1997, nearly 3 times the national average of 19 percent.
The industries accounting for the largest share of this revenue included health care and social assistance ($3.4 billion), transportation and warehousing ($3.3 billion), other services, such as personal services, and repair and maintenance ($3.1 billion); professional, scientific, and technical services ($2.3 billion); construction ($2.1 billion); and retail trade ($2.0 billion).
Five states (NY, FL, GA, CA, and TX) showed the largest increase in the number of firms with no paid employees and overall revenue between 1997 and 2002.
New York – 43,151 more nonemployer firms and an increase of $753 million
Florida – 41,745 more nonemployer firms and $835 million more in revenue
Georgia – 34,618 nonemployer firms and an increase of $757 million in revenue
California – 31,093 more nonemployer firms and $833 million more in revenue
Texas – 28,516 more nonemployer firms and $732 million more in revenue
Five states, NY, CA, FL, GA, and TX, accounted for the highest number of black-owned firms in 2002 and the largest increase in the number of firms since 1997.
- New York led all states with 129,324 of which 98,076 were in the city. The number of black-owned firms in the state increased by 42,855 firms or 50 percent between 1997 and 2002. Eight percent of all businesses in the state were black-owned in 2002.
- California ranked second with 112,873 firms, an increase of 33,763 firms or 43 percent since 1997. Four percent of all businesses in the state in 2002 were black-owned.
- Florida ranked third with 102,079 black-owned businesses, an increase of 42,347 firms or 71 percent since 1997. Seven percent of all businesses in Florida were black-owned.
- Georgia came in fourth with 90,461 firms, an increase of 34,465 or 62 percent since 1997. Thirteen percent of all businesses in the state were black-owned in 2002.
The counties with the highest number of Black-owned firms in 2002 were Cook County, Ill. (54,758); Los Angeles County, Calif. (52,674); Kings County, NY (37,499); Prince George’s County, MD (28,389), Miami-Dade County, FL (28,359), and Harris County, Texas (27,770).
The cities with the highest number of Black-owned firms in 2002 included New York, NY (98,076); Chicago, Ill. (39,424); Los Angeles, CA (25,958); Houston, Texas (21,226); and Detroit, Michigan (19,530).
RECEIPTS SIZE OF FIRM
Black-owned firms with receipts of $1 million or more increased 24 percent from 8,682 in 1997 to reach 10,727 in 2002 (10,202 were employer businesses). This 24 percent increase compares to a 13 percent increase for all businesses in the U.S. of this same size.
Revenue for these black-owned firms increased 22 percent from $40 billion to $49 billion during that same five-year period, $48 billion was accounted for by employer firms. This 22 percent for black-owned firms is comparable to the 23 percent increase for all U.S. firms.
These large receipts size firms accounted for only 1 percent of the total number of black-owned firms but 55 percent of the total revenue.
The industries accounting for the largest share of the 10,727 black-owned firms with $1m or more in receipts in 2002 were health care and social assistance (1,793); retail trade (1,352); construction (1,275); and professional, scientific, and technical services (1,275).
The industries accounting for the largest share of revenue for firms with $1m or more in receipts were retail trade ($9.8 billion); construction ($5.8 billion); professional, scientific, and technical services ($5.3 billion); and wholesale trade ($4.8 billion).
EMPLOYMENT SIZE OF FIRM
There were 973 black-owned firms in 2002 with 100 employees or more, compared to 889 in 1997, a 9 percent increase.
Fifty-six percent of these firms were operating in administrative and support, waste management and remediation services (244 firms); professional, scientific, and technical services (127 firms); and health care and social assistance (177 firms).
Revenue for these Black-owned firms increased 31 percent from $12 billion in 1997 to $16 billion in 2002.
Thirty-eight percent of the revenue was accounted for by firms operating in manufacturing ($2.3 billion); administrative and support, waste management and remediation services ($2.1 billion); and retail trade (more than $1.7 billion).
Looking at just those black-owned firms with 500 or more employees, the number of firms increased from 53 in 1997 to 91 in 2002 (a 72 percent increase) but the revenue increased from $2 billion to $4.8 billion between 1997 and 2002, a 143 percent increase.
That concludes my presentation. The good news to cite a quote from our Director Louis Kincannon, “It’s encouraging to see that not just the number but the sales and receipts of black-owned firms are growing at such a robust rate, confirming that these firms are among the fastest growing segments of our economy.”