When compared to their male counter parts, Minority Women Businesses are relatively more successful than are White Women, Part II

Minority women business owners are relatively more successful than are white women, when both are compared to men of their respective groups. In a previous post, we suggested that business analysts need to give more specific attention to the entrepreneurial dynamics of minority women – rather than lumping them into the category of all minorities. To support this claim, a new census survey shows that all women owned 20.5% of the nation’s 5.2 million employer-based firms in 2014. However, by racial comparison, minority women owned 26.8% of all minority firms and Black women owned 35.1% of all Black-owned firms. In contrast, white women owned just 19.6% of white-owned firms. This post highlights the fact that a similar trend exists when one compares the share of total revenue received by minority women in comparison to white women.

On September 1, 2016, the Census Bureau released a new survey entitled, Annual Survey of Entrepreneurs (ASE). The survey is based on data collected from a sample of approximately 290,000 employer-based businesses that operated during 2014. An employer-based business is defined as an enterprise with one or more full-time employees. In the future, the results will be released on an annual basis and will serve as a supplement to the Census Bureau’s five-year Survey of Business Owners. The ASE provides a timelier examination of the nation’s business owners specified by race, gender, and ethnicity.

The ASE illustrates some noteworthy dynamics on gender ownership characteristics by race and ethnicity. Across racial and ethnic groups, women owned 20.5% of all employer-based firms in 2014. Additionally, they received only 11.9% of all business revenue.However, within their own group, minority women were much more likely to be owners of employer-based businesses than were white women and to receive a larger share of their group’s revenue than did white women business owners. In particular, white women owned 19.6% of all white-owned employer businesses and received 11.4% of the revenue of white-owned businesses. In contrast, minority women owned 26.8% of all employer-based firms owned by minorities and received 18.2% of minority business revenue.

Black women in particular had the highest percentage ownership rates in comparison to other minorities and to white women. Black women owned 35.1% of all Black-owned employer-based firms and received 19.5% of Black business revenue. Their revenue share was only exceeded by Native Americans women. They owned 29.2% of all Native American-owned employer-based firms but received 25.0% of total revenue. Black women were followed closely by Asian women. They owned 27.1% of Asian businesses and received 19.5% of Asian business revenue. Finally, Hispanic/Latino women owned 24.3% of their group’s businesses and received 16.0% of the revenue.
White women not only had the lowest percentage ownership among racial and ethnic groups, 19.6%, they also received the smallest share of business revenue, 11.4%.
The table below illustrates the findings for revenue, while the preceding post listed the number of businesses. These findings suggest that policymakers and business analysts must start giving more attention to business dynamics among minority women. They must stop simply combining them into the category of all minorities. Instead, it is important to understand why minority women are relatively more successful as business owners.

2014 Gender and Race/Ethnic Revenue of Employer-based Firms (Annual Survey of Entrepreneurs)