Census Finds High Number of Black Female Entrepreneurs

By KAREN ROBINSON-JACOBS

July 13, 2001 12 AM PT

TIMES STAFF WRITER

Nearly 40% of African American-owned businesses surveyed by the Census Bureau in 1997 were owned by women, a larger percentage than for any other minority group and for the nation’s business community as a whole, according to figures released Thursday.

Both nationally and in California, about 38% of African American-owned firms had female owners, compared with 28% of Latino-owned companies, 27% for both American Indian/Alaska Native firms and companies owned by Asians and Pacific Islanders, the census found.

Among all businesses in the country, 26% were women-owned.

The relatively high percentage of businesses owned by African American women reflects the matriarchal nature of many black families, according to business owners and experts, who speculate that it’s easier for a woman who heads a household to make the leap to running a business.

“African American women have been the providers--the head of the house--more so than other ethnic groups,” said Victoria Lowe, president and founder of Alert Staffing, an employment services company with $214 million in sales last year.

“They’ve taken the skills they learned in the corporate world and taken that faith walk to start their own companies, to try to find another way to build their dreams,” she said.

William H. Crookson, a professor of entrepreneurship at the Marshall School of Business at USC agreed, saying black women “have decided to support their families by becoming entrepreneurs.”

“It’s not surprising, and it’s going to be a continuing phenomenon,” he said.

The gender-specific statistics were contained in the Survey of Minority-Owned Business Enterprises, a compilation of Census Bureau reports issued this year for firms nationwide owned by African Americans, Latinos, Asian/Pacific Islanders and American Indians/Alaska Natives.

As expected, based on the earlier reports, the compilation showed that noncorporate minority-owned businesses grew at a rate four times faster than for all U.S. firms between 1992 and 1997, increasing from 2.1 million to 2.8 million for a growth rate of 33%.

But even with growth so much higher than for the business pool as a whole, minority firms still accounted for a fraction of the total business population: 15%, up from 12.5% in 1992.

The economic census is done every five years to give policy makers a better understanding of the makeup of the nation’s business community. For several reasons, the methodology was changed between 1992 and 1997, making comparisons between the two years difficult in all but a few categories.

For example, the 1997 survey for the first time included so-called C corporations, virtually all legally incorporated firms except those in which the shareholders chose to be taxed as individuals.

Including C corporations, there were 3.04 million minority-owned firms, employing 4.5 million people and generating $591.3 billion in revenue in 1997, the census showed.

Most of those firms were small, both in size and revenue.

Experts said that’s because many of the minority firms are relatively new--5 years old or younger--without the expertise and access to capital to grow. And many, Crookson said, are “lifestyle businesses” that grew out of the owner’s hobby.

“Those business owners typically don’t have a far-reaching view [for the company], and they’re going to stay limited,” he said.

The average annual receipts among minority-owned firms, including C corporations, was about $195,000 in the survey period. That’s less than half the $411,000 figure seen for all U.S.-based firms, excluding public companies and nonprofits.

Broken down by minority groups, firms owned by Asians and Pacific Islanders had the biggest cash intake, with $336,000 in average receipts.

African American firms had the narrowest revenue stream, with a per-firm average of $86,000. And across racial and gender lines, African American women had the smallest take of all, with a per-firm average of $43,300 a year.

Among all minority firms, only 3% had sales of $1 million or more.

Part of the reason is that “access to capital is still a problem within our community,” said Angela Walton, president and chief executive of Melador Technologies, an information technologies company.

“The larger financial institutions don’t take us seriously,” said Walton, whose firm had just under $10 million in sales in 2000. “You’re a black woman, you have two strikes against you.”

Although Walton said the growing number of targeting programs launched both by lenders and the government have improved the situation somewhat, compared with when she launched her first company in 1985, lack of capital remains a great hindrance to growth.

Another factor is the type of business typically owned by minority women.

The census showed that the service and retail businesses were among the top revenue generators for minority women--sectors that include businesses such as beauty salons and restaurants, as well as home-based operations.

For minority men, the leading industry, measured by receipts, was wholesale trade.

Among all businesses, the dollar-volume leader was manufacturing, a category that included few minority men and even fewer women.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Women in Business

African American women have a higher rate of business ownership than women in other minority groups, according to the 1997 economic census. A look at minority-owned firms by gender:

African American ownership

Women: 38.0%

Men: 53.9%

Equal: 8.1%

Latino ownership

Women: 28.1%

Men: 55.6%

Equal: 16.3%

Asian ownership

Women: 27.2%

Men: 54.5%

Equal: 18.3%

American Indian and Alaska Native ownership

Women: 27.2%

Men: 54.1%

Equal: 18.7%

Source: Census Bureau

Bringing in the Receipts

Among minority groups, average receipts are highest for businesses owned by Asian and Pacific Islander men and lowest for businesses owned by African American women. A look at 1997 business receipts by race and gender:

African American (in thousands)

Men: $115.1

Women: $43.3

Co-owned: $98.5

American Indian and Alaska Native (in thousands)

Men: $193.1

Women: $126.0

Co-owned: $188.8

Latino (in thousands)

Men: $199.8

Women: $80.9

Co-owned: $131.8