Posted at 11:00 PM
Many more minority men and women are embracing entrepreneurship, with minority females becoming entrepreneurs at a faster rate than any other group. Minority female-owned firms once again grew faster than all other groups of firms in number of firms, gross receipts and employment between 2002 and 2007.
In 2007, there were about 5.8 million minority-owned firms, of which 2.2 million or 38% were owned by minority women primarily (with a 51 percent ownership rate) and 2.9 million or 51% firms were owned by minority men. The remaining 11% equally owned by minority women and minority men in 2007.
African American female-owned firms grew the fastest than any other group of firms in number of firms by 67%, and in employment by 39 percent. Firms owned by Native Hawaiian and Other Pacific Islander women had the highest increase in gross receipts, with a 90 percent growth during the same period. Asian women-owned firms followed African American women-owned firms with the second fastest growth in number of firms and employment; and Hispanic female-owned firms ranked third in terms of growth in those two business measures during the same period.
Minority women-owned firms generated $186.2 billion in gross receipts (about 18% of all the receipts generated by minority-owned firms) and employed 1.2 million workers (about 21% of all the workers employed at minority-owned firms). Although minority-owned businesses are growing at a faster rate than non-minority firms, there is a large disparity in average gross receipts between minority female-owned firms and other group of firms. Average gross receipts of minority female-owned firms amounted to only $84,000 per firm, less than half the average gross receipts of their non-minority female counterparts ($181,000), and a third of the average receipts generated by minority male-owned businesses ($245,000). Non-minority male-owned firms had the largest average gross receipts at $706,000 per firm.
If minority-owned businesses would have reached parity in 2007, there would have been 8.1 million minority businesses, instead of 5.8 million. These firms would have generated $3.4 trillions in gross receipts instead of $1 trillion, and would had employed 17.5 million workers instead of 5.8 million. The entrepreneurial parity gap for minority women is even wider as a result of their lower participation rates as business owners. MBDA’s goal is to help grow minority male and female-owned businesses in industries with the potential for size and scale, as well as encourage job creation among these firms.