Minority-Owned Business Expansion, Contraction, Survival Rates Differ From
Non-Minority Business
Minority-owned businesses expand, contract, and survive at rates that differ from non-minority owned business, according to a study released by the Office of Advocacy of the U.S. SBA. The report tracks the success of minority-owned employer establishments that were in operation from 1997 to 2001.
New Report Details Minority Business Dynamics 1997-2001
Minority-owned businesses expand, contract, and survive at rates that differ from non-minority owned business, according to a study (http://www.sba.gov/advo/research/rs251tot.pdf) released by the Office of Advocacy of the U.S. Small Business Administration. The report tracks the success of minority-owned employer establishments that were in operation from 1997 to 2001.
“This report provides new insights into the dynamics of minority- owned business establishments,” said Thomas M. Sullivan, Chief Counsel for Advocacy. “These insights are important for policy-makers working to expand an ownership society to all segments of our society.”
Released at The Institute for Entrepreneurship, Leadership, and Innovation at the Howard University School of Business, findings of Dynamics of Minority-Owned Employer Establishments, 1997-2001 include:
* During 1997-2001, 27.4 percent of non-minority owned establishments expanded. At the same time, 34 percent of Hispanic-owned establishments expanded, 32.1 percent of Asian and Pacific Islander-owned establishments expanded, 27.8 percent of American Indian and Native Alaskan-owned establishments expanded, and 25.7 percent of Black-owned establishments expanded.
* The four-year survival rate for non-minority owned businesses establishments was 72.6 percent. The survival rates for minority-owned businesses were lower, including Asian and Pacific Islander-owned at 72.1 percent, Hispanic-owned at 68.6 percent, American Indian and Native Alaskan- owned at 67 percent, and Black-owned at 61 percent.
* States with the highest survival rates for minority-owned businesses during 1997-2001 were Delaware for American Indian and Native Alaskan-owned establishments (93.8 percent), Wyoming for Black-owned establishments (93.5 percent), South Carolina for Hispanic-owned establishments (88.6 percent), and New Mexico for Asian and Pacific Islander-owned establishments (84.6 percent).
Special tabulations tracking a subset of the 1997 Survey of Minority-Owned Businesses by the Census Bureau, with funding from the Office of Advocacy, provided data for the report. While comprehensive, the dataset does not include the two million new businesses started in 1997- 2001, or the jobs they created.
The Office of Advocacy, the “small business watchdog” of the government, examines the role and status of small business in the economy and independently represents the views of small business to federal agencies, Congress, and the President. It is the source for small business statistics presented in user-friendly formats and it funds research into small business issues. For a copy of the report, visit www.sba.gov/advo.