A Snapshot of Minority-Owned Businesses in the United States Today

The 2012 Survey of Business Owners, published by the United States Census Bureau, provides the most up-to-date and accurate depiction of how minority-owned businesses are currently performing, the disparities they face, and the business characteristics that differentiate them.

Increase in Entrepreneurship

In 2012, there were 8 million minority-owned businesses in the United States, making up 29 percent of all businesses. 41 percent of minority-owned businesses were Hispanic-owned, 32 percent were Black-owned, 24 percent were Asian-owned, 3 percent were owned by American Indians and Alaska Natives and 0.6 percent were owned by Native Hawaiians and other Pacific Islanders. (McManus, 2016) (Table 1)

Table 1. Minority Business Ownership in the United States, 2012
Note: Percentages may not sum up to 100% as some participants identify as two or more races or “other.”
Source: 2012 Survey of Business Owners, U.S. Small Business Administration

Minority-owned businesses and non-minority-owned business can be compared by ratio of adult population per business.  Among non-minorities, there is about one business for every 8 adults. For Hispanic and Black-owned businesses, it is one business per 11 adults and for Asians it is one business for every 6 adults. (McManus, 2016) (Table 2)

Table 2. Ratio of Business Per Adult Population, 2012
Note: The smaller the number the more businesses are owned by these groups.
Source: 2012 Survey of Business Owners, U.S. Small Business Administration 

Disparities

In 2012, minority-owned businesses had lower sales and less employees than non-minority-owned businesses. For instance, Asian-owned businesses represent roughly 7 percent of all businesses in the United States and represent 6 percent of all sales and 6 percent of all employment. (McManus, 2016) (Table 3)

Table 3. Minority Group Total Business Ownership, Sales, and Employment versus Non-Minority Group, 2012
Note: Percentages may not sum up to 100% as some participants identify as two or more races or “other.”
Source: 2012 Survey of Business Owners, U.S. Small Business Administration

Sales

Looking at sales, in terms of average sales per firm, shows significant differences between minority-owned businesses and non-minority-owned businesses, but also underlines key distinctions among minority groups. For example, Hispanic-owned businesses average about $143,000 per business. This is about two and a half times what Black-owned businesses make, about half of what each Asian-owned business makes and a quarter of what non-minority-owned businesses make.  (McManus, 2016) (Table 4)

Table 4. Sales Per Ethnic Group, 2012
Source: 2012 Survey of Business Owners, U.S. Small Business Administration

Employment

With the exception of Asian-owned businesses, minority-owned businesses are less likely to be employers. While 22 percent of non-minority-owned businesses have at least one employee, only 4 percent of Black-owned businesses have employees. Likewise, even when minority-owned businesses are employers, they tend to have less employees than non-minority-owned businesses. On average, Asian-owned businesses have 7 employees per businesses. Non-minority-owned businesses have about 12 employees per business. (McManus, 2016) (Table 5)

Table 5. Percent of Employer Firms and Average Employment Size by Ethnic Group, 2012
Source: 2012 Survey of Business Owners, U.S. Small Business Administration

Minority-Owned Business Characteristics

All minority-owned businesses are more likely to have a younger owner, less than 35 years old. Minority-owned businesses also tend to be younger. 41 percent of minority-owned businesses are less than five years old, while only 13 percent of businesses are over 12 years old; most minority-owned businesses do not make it past five years. Older businesses are more likely to have high sales and more employees. Besides Asian-owned businesses, minority-owned businesses are also more likely to be owned by one person instead of a family or more than one co-founder or business partner. Only 17 percent of minority-owned businesses have multiple owners, but they earn five times more revenue and hire five time more employees than do those with one owner. (McManus, 2016)