Minorities owned more than 3 million in 1997. or nearly 15 percent of the 20.8 million of the nation's non-farm businesses without publicly held stock. according to a series of U.S. Census Bureau reports released last spring. Minority-owned businesses employed about 4.5 million workers and earned $591.3 billion in revenues, accounting for about 4.4 percent of all non-farm workers and 3.2 percent of all business receipts.
The data, the most recent available. strongly suggest that minority-owned businesses are growing in number and importance. Minority-owned non-chapter C businesses (businesses not legally incorporated) grew by 60 percent, compared with 40 percent for all firms.
"Minority-owned businesses are increasingly becoming significant employers and suppliers of services and products," says Roger A. Campos, executive director of the Minority Business RoundTable, a program of the Joint Center for Political and Economic Studies. "Investment in the domestic market is imperative for this economy's growth, and institutional investors must recognize that these businesses are important catalysts for our overall success."
Indeed, as U.S. Commerce Secretary Donald Evans noted in remarks at the Minority Enterprise Development (MED) Week conference this September, "the Census Bureau is projecting that 90 percent of the net population growth in this country over the next 50 years will be in minority groups." As the demographic mix of our population changes, minority entrepreneurs will play an increasing role in our economic growth and progress.
The data, however, though certainly offering cause for optimism, also suggest that minority businesses still have a tremendous amount of catching up to do. Even with comparatively rapid growth, the vast majority of minority-- owned firms do not employ enough workers or generate sufficient revenue to constitute a major vehicle for improving economic conditions among minority populations. Only 15 percent of small busineses are owned by minorities, a rate that significantly lags behind the minority population in the U.S., which registered at 31 percent in the 2000 Census. And Black - and to lesser extent, Hispanic - businesses have even lower gross receipts than minority businesses in general; Black firms also have lower average payrolls than other minority businesses.
The data, collected from a large sample of tax returns of individual proprietorships, partnerships and corporations with receipts of at least $1,000, show that nearly 80 percent of all minority firms had no paid employees. The 20.3 percent of the firms with paid employees accounted for 87.4 percent of the gross receipts. Minority-owned firms with employees had averaged $840,314 in gross receipts and employed seven workers, compared with $21,695 for those with no employees. Minority firms with employees were still much smaller than their counterparts, which on average employed 20 workers and grossed nearly $3.4 million in receipts.
About 2.8 percent of all minority-- owned businesses, or 84,267 firms, had gross receipts of $1 million or more. These large firms accounted for 65.6 percent of the gross receipts of minority enterprises.
Minority-owned firms with employees had an annual payroll of $95.5 billion, or an average of $21,160 per worker. Their counterparts paid an aggregate $2.9 trillion payroll, or $28,410 per worker. …