As the nation celebrates Black History Month in February, there is good news for African-American women who aspire to become entrepreneurs.
The number of U.S. businesses owned by black women increased nearly 300% between 1997 and 2014, the fastest rate of growth for any category of minority women. By comparison, the number of firms owned by nonminority women grew 37% over the same period.
Those are among the findings of the 2014 State of Women-Owned Businesses Report, which was written by Womenable, a research and advocacy firm supporting women-owned enterprises worldwide.
In all, the number of U.S. companies owned by minority women grew from about 929,000 in 1997 to 2.9 million in 2014. Of those, African-Americans owned the largest share – 1.2 million – followed by Latinas who owned 1 million businesses and Asian-Americans who owned about 676,000.
Combined, businesses owned by black women employed more than 287,000 workers and had annual revenues estimated at $49.5 billion in 2014. In addition to the 296% boost in the number of firms owned by African-American women, their revenues have increased 265% and their payrolls by 70% since 1997.
Commissioned by American Express OPEN, the report found business ownership is growing faster for minority women than for all women in terms of revenue and the number of companies and employees. Minority women now are at the helm of 32% of women-owned firms in the United States. In 1997, they accounted for 17% of female business owners.
Since 1997, the number of businesses owned by Latinas has jumped 206%, while there has been a 247% increase for Native Hawaiian/Pacific Islander women, a 179% increase for Asian-American women and a 124% jump for Native American/Alaska Native women, the report found.
Nationwide, the number of female-owned companies is up 68%, with the fastest growth in Georgia, Texas, North Carolina, Nevada and Mississippi.
According to the National Women’s Business Council, African-Americans comprise about 12 percent of all women-owned businesses nationwide, with nearly one-third of the firms in the healthcare and social assistance sector.
Increasingly, however, female entrepreneurs are entering new areas of businesses. Among the top 13 industries, women-owned firms are leading the growth in eight of them, including real estate, finance/insurance and wholesale trade, the Womenable report found.
Despite the proliferation of women-owned businesses, there is still room to grow. Female-owned businesses account for just 6% of employees nationwide and less than 4% of total business revenues – largely unchanged since 1997.
“The real issue at hand is not getting more women to start business, but rather providing support to women who are already in business to enable them to grow their enterprises to the next level,’’ the report notes.
To help businesses owned by women and minorities, the U.S. Small Business Administration (SBA) provides loans and other financial assistance to entrepreneurs. In fiscal year 2014, the SBA approved more than 15,600 loans totaling $6.5 billion for minority-owned businesses. Among African-Americans, the number of SBA loans was up 36%; for Hispanics and women, loans were up 14% over the previous year.
“I’m determined to get more loans and federal contracts into the hands of entrepreneurs who reflect the diversity of America,’’ SBA Administrator Maria Contreras-Sweet said in a December 2014 statement.