September 1, 2015

Businesses owned by women, minorities lag in revenue share

Businesses Owned by Women, Minorities Lag in Share of RevenueWomen, blacks, Asians and Hispanics have built up substantial positions as business owners in several sectors of the U.S. economy. But based on revenue, those businesses are on average considerably smaller than white- or male-owned firms, according to a Pew Research Center analysis of recently released data from the U.S. Census Bureau.

Overall, men owned more than half of the nation’s 27.6 million firms in 2012, according to preliminary results from the Survey of Business Owners, and women owned more than 9.9 million businesses, about 36% of the total. The remaining 10% of firms were either jointly owned by men and women or could not be categorized by gender because they were publicly traded companies or have large, diverse ownership groups.

The data for the Census Bureau’s twice-a-decade survey includes all firms — incorporated or not, with and without paid employees — with receipts of $1,000 or more in 2012. A handful of firm types are excluded, including farms, railroads, funds and trusts, churches, foundations, civic groups and professional organization, the Postal Service and the Federal Reserve. About two-thirds of the 1.75 million businesses in the survey sample responded.

Women-owned firms made up sizable shares of some industries. For example, more than half of all firms in the health care/social assistance and educational services industries were owned by women in 2012. Women also owned more than half of the businesses in the miscellaneous “other services” category.

But women-owned firms didn’t earn a proportionate share of industry revenues. (The analysis is complicated by the fact that well over half of all business revenues go to a relatively small number of publicly held companies and other firms that aren’t classifiable by gender, race or ethnicity. For that reason, the sales comparisons that follow refer only to the 27.5 million firms that are classifiable in those ways.)

The combined sales of all women-owned firms in the country, for instance, were $1.6 trillion in 2012 – 11.3% of the $14.3 trillion in total receipts reported that year by all classifiable firms. Male-owned firms had 79.2% of total classifiable sales; those whose ownership was equally male and female had 9.5%.

Although 64.5% of classifiable health care and social assistance firms were owned by women in 2012, those firms received just 19.9% of that industry’s $703.5 billion in total classifiable revenues. Among classifiable educational-services firms, 56.9% were women-owned but they took in only 28.1% of the industry’s classifiable revenues. Mining, quarrying and oil and gas extraction stood out among the major industry groups: Women-owned businesses in that industry had a greater share of classifiable revenues (18.8%) than they represented as a share of all classifiable firms (17.7%).

Overall, about 29% of firms (nearly 8 million) were owned by blacks or Asians. About 12% were owned by Hispanics, who can be of any race.

Sales at minority-owned businesses as a group totaled nearly $1.6 trillion in 2012, or 10.9% of all classifiable revenues. About half of those sales went to Asian-owned firms, who accounted for 5.5% of classifiable sales and 7.1% of classifiable businesses. The 12.1% of classifiable businesses with Hispanic ownership received only 3.6% of classifiable sales, or $517.4 billion.

The data show that some sectors more than others have a significant share of minority-owned firms. Nearly a fifth of health care/social assistance businesses and about 15% of transportation/warehousing businesses were owned by blacks. Asian Americans owned about 19% of firms in the accommodation and food services industry. (Note: The SBO defines “ownership” as having 51% or more of the stock or equity in the business. Also, all findings are based on preliminary data and may change when the Census Bureau releases final data in December.)

Fewer than one-in-five of all firms (19.6%) had paid employees in 2012, and those that did were considerably larger (averaging nearly $6 million in annual sales, versus less than $48,000 for firms with no paid employees). Among firms with employees, women-owned firms employed fewer people on average than male-owned firms (8.5 versus 13.5); minority-owned firms had smaller payrolls (8.4 employees on average) than non-minority-owned firms (12.6 employees).

Topics: Business and Labor, Economic and Business News, Gender, Race and Ethnicity, U.S. Census

  1. Photo of Drew DeSilver

    is a senior writer at Pew Research Center.

2 Comments

  1. Mark Kelly12 months ago

    Women’s businesses are why women only make 80% of what men make. Women start restaurants, book stores, curio shops and bakeries. Their businesses are small and pay minimum wage all too often. Not all that many large firms at all. No Orange started by Sherrie Jobs and Sally Wozniak. No large manufacturing concerns. …same with the Minorities. Ethnic restaurants, landscaping companies and roofers. …Isn’t it amazing that despite all of the roadblocks set up to hinder White men, that they still dominate the new startups? You can’t legislate creativity.

    1. Dorothy12 months ago

      Hi Mark; I don’t believe anything is set up to “hinder” anyone. It is set up to assist those who may be in need of assistance. There is room in this country and in this world to help each other, and it makes for a learning experience both ways. I just started my own business, I am a female and African American. I am doing OK, however I recently realized that there is a “niche” that I should tap into for growth. This “niche” is predominantly male oriented. Do you think if I reached out to male counterparts (race doesn’t matter here) for advice on how to penetrate the market that someone would give me some insight? Would you?