The number of African American small business owners in the United States has increased by a staggering 400% in just a year. This was the finding of a survey from the small business financing company, Guidant Financial.
The State of a Small Business survey interviewed more than 2,600 small business owners and entrepreneurs, both male and female.
African American Small Business Statistics
The survey found that in 2018, 45% of small business owners were minority ethnic groups. This was already a dramatic increase from 2015, when the amount of minority business owners was just 15%. The biggest increase among minority small business owners however has been the huge increase in the number of African American small business owners year over year 400% increase in a year-over-year period between 20017 and 2018.
Following African Americans, Hispanics were the next largest group of minority small business owners representing 14% of the business owners interviewed for the survey. Meanwhile, Asians made up 8% of the business owners surveyed while Native Americans made up 4%.
David Nilssen, CEO of Guidant Financial, shared his enthusiasm over the rise in minority small business ownership in the United States in an announcement announcing the guidelines.
In the release, Nilssen said, “It is exciting to see the growth in minority-owned small businesses, a trend that has steadily been rising since we began our survey in 2015.
he added “Growth amongst all minorities including women is promising in America as small business ownership becomes more favorable and easier to attain. We anticipate and hope to see a continued increase as the impact of tax reform and economic growth shape small business ownership moving forward.”
The research also showed some of the reasons behind the prolific growth of minority small business ownership. Specifically, 62% of African American small business owners cited their desire to pursue their passion as the reason for starting a business. Another 53% of African American business owners said they were ready to be their own boss, and 30% said they decided to become a small business owner because an “opportunity presented itself.”
Business services have been one of the leading types of businesses African Americans have embarked on in recent years, with 13% of the participants saying they operate a business services venture. Health, fitness and beauty is another popular business niche for African American entrepreneurs, with 9% of small business owners saying they operrated this type of business.
The survey found 66% of African American business owners are looking to grow their current location.
Hispanic Small Business Owners
When it comes to Hispanic business owners, the second largest minority business ownership group in the United States, Guidant Financials’ Hispanic Business Owners 2018 Small Business Trends research revealed that 51% of Hispanic business owners were motivated into open their own business because they felt ready to be their own boss.
Entering the restaurant and food industry is a popular business venture for the Hispanic community with 11% of Hispanic small business owners operating a business in this sector. Like the African American community of small business owners, business services is another leading sector for Hispanic business owners.
On a scale of ten, with ten being the highest, Hispanics ranked their happiness at running their own business at nine. This is slightly higher than African American business owners, who ranked their happiness for having their own small business in the United States at eight.
Photo via Shutterstock
I think that the nationality can only speak so much. It is more about the person’s abilities that allow them to be successful.
The nationality in this instance is an important part of economic development within traditional black communities. Monitoring how well businesses are developed and how the economic dollar circulates within the community is essential to ensure not only community stability for growth but also an economic step in addressing racial inequality as well.
Couldn’t agree more. Further, this research is important when taking into consideration the barriers in racial and gender-based lending inequality: “Research shows women and entrepreneurs of color struggle more to access credit and gain access to mentoring and networking opportunities. For example, women account for only 16% of conventional small business loans and 17% of SBA loans even though they represent 30% of all small companies. Similarly, African-American businesses received 2.3% of SBA loans in 2013, down from 11% in 2008.” -www.smallbusinessmajority.org
Look I’m as enthusiastic about aa entrepreneurship add the next guy or maybe mute do, but 400% in one year? Come on……
The 400% could not only reflect the lower numbers in the past or the underreported numbers. The opportunities with the digital age could represent a new boldness or playing field being leveled. Irrespective of the number of optimistic start ups the revenues still represent the racial wealth gap.
Great to see the increase in diversity. Hopefully each SMB owner is able to find an underserved customer base and get them what they want. That will enable these new businesses to be successful.
It’s an interesting study – there had been reports of more women than men among African American entrepreneurs, so I am interested in seeing the detail behind the numbers (as well as what was identified at other)
It is June of 2021, this story has been proven to be PURE FICTION! trump in fact De Funded Black businesses. Apparently this reporter is yet another trump psychophant.