The Number of Minority-Owned Businesses Expands
The number of businesses owned by Asians grew by 24 percent while African-Americans minority businesses grew by 45 percent. Hispanic minority businesses grew by 31 percent. Businesses owned by women increased by 20 percent to 6.5 million over the five-year period. The Census Bureau revealed the survey results at the National Urban League’s annual meeting.
“There have to be economies of scales to provide services competitively with other companies and minority-owned companies have to grow to compete,” said Marc H. Morial, the president of the National Urban League.
These numbers break down further into more positive results. While the number of minority-owned businesses with more than one employee increased by 4 percent over the period, minority businesses with a single employee grew at three times that rate. Within this number, African-American-owned businesses grew at 51 percent while Hispanic-owned small businesses grew at 39 percent. The Census Bureau cannot explain this growth but expects to make more detailed information next year with more sufficient analysis.
Other studies have examined minority-owned businesses also. A new study from Florida International University focused on South Florida businesses in operation for less than 3.5 years old and the people starting them. The study found that minority-owned businesses provide services more often than not while the owners had a brighter outlook on growth and hiring that the U.S. average. These business owners are mostly black and Hispanic. The majority of these business owners are poorer economically and less educated than the U.S. average.
“You can’t rely on MBAs to create your entrepreneurial activity. Most businesses are started by people who haven’t finished college so we need programs that provide help to a broad spectrum of people with a wide range of backgrounds,” said Paul Reynolds speaking with the Sun-Sentinel. Paul is a professor of management at Florida International University and oversaw the compilation of the study.
The conclusions of this study are also encouraging. The study found that about 1 in 8 people of working age are likely to start a business in South Florida. That translates to about 340,000 people currently. The study found that 61 percent of these owners were black or Hispanic against a national average of 23 percent. Although non-Hispanic white women are half as likely to start a business as black women in South Florida, about two in three owners are men, consistent with the national average. These results were reported by the Sun-Sentinel.
The study found that loans to start or expand a small business were an important factor but could be difficult to obtain. Marie Auguste is a registered nurse originally from Haiti with a Master’s Degree in business who started a health consultancy, Comprehensive Health Solutions Inc., three years ago in Miramar, Florida.
Her business assists hospitals, nursing homes, and other health organizations with government rules compliance and also provides compliance training. She started her business while working for a health-care company. It became her full-time business when her client load became more adequate.
She currently has three employees. She has been seeking loans to expand her business as she intends to employ up to ten employees in another five years. “The Small Business Administration does a great job of helping you develop your business but a lot of guarantee programs don’t fit the needs of the entrepreneur,” said Auguste speaking with the Sun-Sentinel. “It’s almost like you have to be dirt-poor to get a guarantee, but not so poor that you can pay the loan back.”