In this post, I have gathered Black-owned business statistics from some of the most authoritative organizations in the space to give you an accurate view of the state of Black-Owned businesses in the United States of America.
Before I get into the statistics I think it’s important to get on the same page in regards to what a Black-Owned business is.
What do I mean when I say a business is black-owned?
In most of the studies, I found it acknowledged that not all businesses are classifiable by the race or ethnicity of their owners.
The only companies that were truly acknowledged as black-owned businesses were those where the owner had at least 51% equity in the firm.
So for this study, we will adhere to those terms when we mention a black-owned business.
How many black-owned businesses are there in the US?
According to the most recent data from the U.S. Census Bureau, there are an estimated 3,115,000 African-American or Black-owned businesses in the United States.
This number is reinforced by a study done by the US Small Business Administration its office of advocacy.
In its latest infographic spotlighting Black-owned businesses. Black business owners own over three million businesses and employ almost 1.2 million people.
Growth of Black-owned businesses in the US
The number of black-owned businesses has increased a lot in recent years. Its most noteworthy increase was between 2017 and 2020 during the COVID-19 pandemic.
In 2017, there were an estimated 124,004 U.S. firms with majority Black or African American ownership (127,1 billion in gross revenue)
In 2020, there were an estimated 140,918 U.S. firms with majority Black or African American ownership ( $141.1 billion in gross revenue)
This is a 14% increase in the number of firms
This is an 11% increase in gross revenue
This is the latest available data from the Census Bureau’s Annual Business Survey (ABS)
Percentage of black-owned businesses
Studies have clearly shown that more black people have decided to dive into entrepreneurship in the last few years but it still is a small number when you compare it to all the active businesses in the United States of America.
Black-owned businesses only account for 3% of all firms in the United States and they only produce 1% of all revenue while 13.6% of the citizens in the United States of America are back adults.
Black-owned businesses are more common in the healthcare sector and in certain states
There seem to be 2 sectors that possess the most Black-owned businesses.
These 2 sectors are healthcare and the social assistance sector. These also seem to be the sectors with the least amount of business failure according to statistics.
According to the most recent studies, more than 38,000 of the nearly 141,000 U.S. companies with majority Black or African American ownership, or 28% of the total, were in this sector.
The second most common sector that possessed 14% of all Black-owned businesses was Professional, scientific, and technical services.
Other sectors after that were administrative and support, waste management, and remediation services which in total consist of 9%, and constriction which accounted for 7% of all black-owned businesses in the United States.
Areas with the highest number of black-owned businesses
Here’s a list of the top 5 areas in the United States with the highest number of Black-owned businesses.
New York – Newark – Jersey City, NY – NJ – PA Metro Area
14,265 businesses in New York are Black-Owned
Atlanta-Sandy Springs- Roswell, GA metro Area
8,663 businesses in New York are Black-Owned
Washington – Arlington – Alexandria, DC VA MD WV Metro Area
7,933 businesses in New York are Black-Owned
Miami-Fort Lauderdale- West Palm Beach, FL Metro Area
7,072 businesses in New York are Black-Owned
Los Angeles – Long Beach – Anaheim, CA Metro Area
6,864 businesses in New York are Black-Owned
Areas with the highest percentage of black-owned businesses
The number of black-owned businesses in the US has kept rising ever since 2017 but these are the top 5 areas with the highest percentage of Black-owned businesses.
Atlanta-Sandy Springs- Roswell, GA metro Area
7,42% of the businesses in this area are Black-owned.
Washington – Arlington – Alexandria, DC VA MD WV Metro Area
7,01% of the businesses in this area are Black-owned.
Virginia Beach – Norfolk – Newport News, VA – NC – Metro Area
6,83% of the businesses in this area are Black-owned.
Columbus, GA – AL Metro Area
6,72% of the businesses in this area are Black-owned.
Memphis, TN – MS – AR Metro Area
6,42% of the businesses in this area are Black-owned.
Black-owned businesses by gender and age
There does seem to be a difference when it comes to the percentage of Black-owned businesses when we categorize it through gender.
According to the most recent studies done by Pew Research, 55% of Black-owned businesses had male owners while 37% of Black-owned businesses were owned by women. The remaining 8% have equal black male-female ownership.
It seems black business ownership isn’t a young man’s game. 52% of Black or African American business owners were in the age group 35 to 54. After that, 25% of black owners were in the age group 55 to 64.
Most of these business owners had an educational background consisting of acquiring an undergraduate, bachelor’s degree, or another type of degree beyond a bachelor’s.
Final Words
It seems Black-owned entrepreneurship is going in the right way in the United States of America.
The number of black-owned businesses does seem to be increasing every year so if you’re trying to get into this category I hope this encourages you to take the jump.
That being said, it’s important to be realistic about your chances.
This is why I’d recommend also looking at my page about small business failure and survival to get a good idea of your chances and in which sectors you’re the most likely to succeed.
That’s all for today.
I hope this information was of value to you and hopefully I’ll you’ll stay around to read some more of my content.
Sources
United States Census Bureau
United States Census Bureau Annual Survey
Pew Research
Brookings
Black Demographics
Small Business Association
