The United States is home to more than two million black-owned businesses, according to the most recent data available from the census. This number is growing, with many commentators linking the rise of black entrepreneurship to job losses for black workers, along with the provision of new opportunity stimulus checks. August is Black Business Month, a designation that began in 2004 to draw attention to black-owned businesses in the US. To reach this conclusion, analysts first found that 50 US metros had the most black-owned businesses.
They then compared those numbers to the total number of businesses within each metro to get the percentage of businesses owned by black. Researchers also looked at industries to see where black-owned small businesses are most prominent. Unlike black-owned businesses, 86.5% of all businesses are white-owned, even though whites account for only 72.0% of the US population. Nine of the top 10 metropolitan areas with the highest percentage of black-owned businesses are in the South.
In each of the nine metros, at least 25% of the metro's population is black. Fayetteville, North Carolina has the highest percentage of black-owned businesses at 37%. Within the metro, blacks represent 33% of the population, the seventh highest among 50 metros. The percentage of metro businesses owned by blacks is closer to parity with the percentage of African-Americans in the US.
Washington, DC has a quarter (25%) of its population as black, the lowest among any of the southern metros within the top 10 only St. Louis, in the Midwest, is down by 18%. The Richmond, VA metro has three out of 10 Richmond residents as black, compared to 35% in Atlanta, sometimes referred to as the “Black Mecca”. A common characteristic among the 10 poorest is a lower percentage of black residents compared to the US average (12.8%).
Except for Milwaukee, each of the metropolitan areas had black populations below 10%. As mentioned above, blacks account for 12.8% of the US population, so places with fewer black-owned businesses also have fewer black residents. Pittsburgh's black population, for example, is 8%. As the lowest metro, only 1% of its businesses are black owned.
The San Diego metro, which has the lowest percentage of black residents among the 50 tested at 5%, ranks 49th for its percentage of black-owned businesses at 1.1%. The higher the percentage of black residents in a metro does not necessarily mean that you will have a higher percentage of black-owned businesses. St. Louis and Milwaukee have an approximately comparable percentage of black residents (16% and 18%, respectively).
However, with only 1.8% of its black-owned businesses, Milwaukee ranks 41st for its share of black-owned businesses, while St. Louis ranks fourth with 24%. Birmingham, AL has 31% of its residents as black, making it the eighth highest metro in terms of black population. However, only 3.5% of its businesses are black-owned, placing the metropolitan area at No.
22 on our list. Compared to national averages, black-owned businesses are more likely to be in healthcare and welfare, transportation and storage industries. These two industries account for 36% of all black-owned businesses. At a national level, only about 14.7% of companies regardless of race belong to one of these two industries.
The transport and storage industry is made up of 11 sectors from air transport to rail transport postal service couriers and messengers etc. Amongst all black-owned businesses companies in healthcare industry again account for largest percentage comprising 29.5% all black companies while companies in professional scientific and technical services industry represent second largest number with 13.3%, construction remains in third place with 7.9%. Although just over 1 in 5 (or 20.9%) all companies in US are women owned 35.4% all black owned businesses are women owned by blacks. This means that black owned businesses are more likely to be women owned than national average and women owned business are growing at faster rate than national average so this may be representative broader national trend women's business growth. The MBDA has several key initiatives designed to promote and support minority-owned businesses while equity is not systematically incorporated into infrastructure bill consequently states will vary their attempts address past inequality and boost capital to black owned businesses. These statistics show how deep inequality is while illuminating how much hope there is in the Black business community.
