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Minority-Owned Firms Increased at More Than Double the Rate of All U.S. Businesses From 2002 to 2007


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Percent Change in the Number of Firms for Men and Women Owned Businesses by Race and Ethnicity: 2002 – 2007In 2007, minority-owned firms numbered 5.8 million, up from 4.0 million in 2002, an increase of 45.5 percent, more than double the 17.9 percent increase for all U.S. businesses, according to the U.S. Census Bureau's 2007 Survey of Business Owners. Receipts of minority-owned firms increased 55.0 percent to $1.0 trillion over the five-year period, compared with the 32.9 percent increase for all businesses nationwide. In 2007, more than one-fifth (21.3 percent) of the nation's 27.1 million firms were minority-owned.

Of the 5.8 million minority-owned firms, 766,533 had paid employees, an increase of 21.7 percent from 2002. These firms employed 5.8 million people, a 24.4 percent increase from 2002, and their payrolls totaled $164.1 billion, an increase of 42.2 percent. Receipts of minority-owned employer firms totaled $860.5 billion, an increase of 54.3 percent from 2002.

In 2007, minority firms with no paid employees (nonemployers) numbered 5.0 million, an increase of 50.0 percent from 2002. These firms had receipts totaling $164.3 billion, an increase of 58.9 percent.

“Just as the 2010 Census has documented our increasingly diverse population, so too the Survey of Business Owners demonstrates the increasing diversity of U.S. business ownership,” said Tom Mesenbourg, deputy director of the U.S. Census Bureau. “The growth in the number of minority-owned firms — both employers and nonemployers — has far outpaced that of businesses overall.”

The new data are from the 2007 Survey of Business Owners: Company Summary, which provides statistics on minority and nonminority business ownerships every five years, as well as breakdowns and cross-tabulations by gender, race, ethnicity and veteran status. Separate data are provided on firms equally owned by minorities and nonminorities, by men and women and by Hispanics and non-Hispanics.

For most minority groups, the gains in the number of women owners were higher than for men. (See graphs 1 [PDF] and 2 [PDF].)

The three states with the largest number of minority-owned firms in 2007 were California, Texas and Florida. California had 1.2 million minority-owned firms, or more than a fifth of all minority-owned firms in the United States. Texas had 723,057 minority-owned firms, or 12.6 percent of all minority-owned firms, and Florida had 680,069 minority-owned firms, or 11.8 percent.

Among counties, Los Angeles County had the most minority-owned firms with 466,312, accounting for 44.5 percent of the county's total firms; followed by Miami-Dade County, Fla. with 286,596 (71.0 percent); Harris County, Texas, with 169,381 (45.7 percent); and Cook County, Ill., with 154,811 (30.3 percent) firms.

Note — Due to survey methodology changes, the 2002 and 2007 data are not comparable for the following types of businesses: equally owned by men and women, equally owned by Hispanics and non-Hispanics, owned by non-Hispanics and equally owned by minorities and nonminorities.
The Survey of Business Owners defines minority-owned firms as firms in which blacks, American Indians and Alaska Natives, Asians, Native Hawaiians and Other Pacific Islanders, or Hispanics own 51 percent or more of the equity, interest or stock of the business. Additional reports from the survey highlight other characteristics of businesses and owners.
The Survey of Business Owners is conducted every five years as part of the economic census. The 2007 survey collected data from a sample of more than 2.3 million businesses. Data collected in a sample survey are subject to sampling variability, as well as nonsampling errors. Sources of nonsampling errors include errors of response, nonreporting and coverage. More details concerning the SBO survey design, methodology, comparability and data limitations can be found at <http://www.census.gov/econ/sbo/methodology.html>.
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