The performance of small businesses owned by Black Americans was below that of all US small businesses between 2007 and 2010 — a time period that corresponds to the start of the last recession and extends one year after the recovery began.
During the four year time period, Black business revenue grew by 26.5% and employment grew by 6.3%. In comparison, among all small businesses, revenue grew by 39% and employment increased by 11% on average.
Across industries, Black businesses performed best in wholesale trades industries where revenue increased by 97.2%. This was followed by heavy and civil engineering construction (85.8%).
The lowest performing industries for Blacks, in relation to revenue were manufacturing (revenue declined by -4.7%) and computer and electronic manufacturing (revenue grew by 8.2%).
Note that Gazelle Index publishes information separately on all minority groups. As such, we distinguish the groups as follows:
Subcontinent Asian or Asian Indian Americans – A U.S. citizen whose origins are from India, Pakistan and Bangladesh);
Asian and Pacific American (sometimes referred to as Asian and Pacific Islanders) – A U.S. citizen whose origins are from Japan, China, Indonesia, Malaysia, Taiwan, Korea, Vietnam, Laos, Cambodia, the Philippines, Thailand, Samoa, Guam, the U.S. Trust Territories of the Pacific or the Northern Marianas;
Black American or African Americans) – A U.S. citizen having origins in any of the Black racial groups of Africa
Latino/Hispanic American– A U.S. citizen of Hispanic heritage from any of the Spanish-speaking areas of Mexico, Central America, South America and the Caribbean Basin only
Native American/American Indians – Group of native people who are indigenous to the continental United States; American Indian, Eskimo, Aleut or Native Hawaiian, and regarded as such by the community of which the person claims to be a part.
Mission of the Gazelle Index
The Gazelle Index’s mission is to provide timely information that helps improve the performance of minority and small businesses. Consistent with that mission, this article focuses on the performance of African American-owned businesses between 2007 and 2010; a period that encompassed the recession and first year of the recovery.
Results for Black American Business Performance, 2007 – 2010
Our results are based on a sample of Black American small business federal contractors for which two year observations were available, 2007 and 2010. The sample included 1354 businesses. The information below summarizes the four tables at the end of this article. EuQuant, which powers the Gazelle Index, provided the analytics on the data.
Two industries with the largest concentration of firms (see industry table below)
- Professional, scientific/technical services; 41.4%
- Construction of buildings, 18.4%
Two industries with the largest average firm revenue in 2010: (see revenue table below)
- Internet Publishing, Telecommunications and ISP, $33.5 million
- Wholesale Trade-Durable and Non-Durable Goods,
Two industries with the largest average employment in 2010: (see employment table below)
- Internet Publishing and Telecommunications; 34
- Computer and electronic manufacturing; 27
Two industries with the fastest revenue growth between 2007 and 2010: (see revenue and employment growth table below)
- Wholesale Trade-Durable and Non-Durable Goods; 97.2%
- Heavy and Civil Engineering Construction; 85.8%
Two industries with the fastest employment growth between 2007 and 2010: (see revenue and employment growth table below)
- Professional, Scientific and Technical Services; 16.7%
- Wholesale Trade-Durable and Non-Durable Goods; 16.7%
Growing Importance of Minority-Owned Businesses
According to the Census Bureau, minority businesses now comprise 21% of all small businesses and employ about 5% of the total workforce. Between 1982 — 2007 (the latest date for which census data is available) businesses owned by African Americans increased from 308,260 to 1.9 million or by 523%. The growth in the number of Asian-American businesses was slightly greater than was the growth of African American-owned businesses; they increased from 241,806 to 1.6 million or by 545%. Hispanics and Latinos businesses grew fastest among all minority groups (with the exception of Native Americans) – from 284,011 in 1982 to 2.3 million in 2007, or by 696%. Woman-owned businesses also increased significantly, but lagged behind the increase in minority-owned businesses; they grew from 2.6 million to 7.8 million or by 198%.