5 Little Known Facts About Black Entrepreneurship

5 Little Known Facts About Black Entrepreneurship

It’s Black History Month, and if you’re into entrepreneurship, you’ll probably come across a quite a few articles or videos sharing statistics about Black entrepreneurship. But, you probably haven’t come across any of the 5 surprising facts below.

Much of the content out there about Black owned businesses paints a bleak picture. Statistics tend to focus on what Black entrepreneurs don’t have access to, what they aren’t achieving, etc. However, we did a little research and found 5 little known facts that show that, collectively, Black-owned businesses have a bright future.

1. Black entrepreneurs have a strong desire to empower their communities.

Based on a study conducted by the Brookings Institute, roughly 75% of Black business owners with at least one employee cite a desire to help their community as an important factor in their decision to start a business. This is 15% higher than the average among similarly situated business owners. Even more interesting, the study found that Black women were almost twice as likely as the average entrepreneur to cite community impact as a key factor in their decision to launch a business.

This shows the strong bonds that Black owned businesses have with the communities they serve. The average Black entrepreneur isn’t simply concerned with how much money they can make. They are also thinking about how they can uplift their communities.


2. Healthcare is the most common sector for Black owned businesses.

Hov may have been yelling “All us blacks got is sports and entertainment” back in 1996, but according to the Pew Research Center less than 3% of Black owned businesses are in the entertainment industry. Meanwhile the majority of Black-owned businesses are in:

  • Health care and social assistance – 27.5%
  • Professional, scientific, and technical services – 13.9%
  • Administrative and support, and waste management services – 9.0%

[Source: Pew Research Center]

Black entrepreneurs are also making moves in the Construction, Transportation, and Retail Trade Industries as well. This data shows that Black entrepreneurs can thrive in any field, not just the entertainment industry.


3. Black entrepreneurs are better educated than their peers.

Based on data from 2020 published by the US Census Bureau, Black business owners who employ someone other than themselves are 7% more likely than their peers to have at least an associates degree, and 10% more likely to have an advanced degree. This data likely contradicts the image that many draw in their minds when it comes to Black business owners.

It’s difficult to draw any direct conclusions from this data. However, it is interesting in light of the fact that Black entrepreneurs are less likely to receive funding in the form of loans or venture capital investment than their peers. Now we can see that this lack of funding occurs despite Black entrepreneurs having higher levels of formal education on average.


4. Black entrepreneurs are younger than their peers

According to US Census Bureau data (2019), a majority of Black entrepreneurs are under 45. And as a group, Black business owners are younger than their peers.

It may be a push-pull effect that is leading Black Americans to start businesses at a younger age than their peers. Many Black Americans don’t feel that their value is sufficiently recognized in traditional work environments, especially in corporate America. Meanwhile, they are drawn towards the freedom that entrepreneurship offers.

Whatever the reason, with so many Black millennials and Gen Z’ers starting businesses, the future of Black entrepreneurship is bright.


5. Black business owners are much more likely to be solopreneurs

Census Bureau data (2019) also shows that Black entrepreneurs are much less likely to have employees than their peers. Less than 4% of Black owned businesses employ someone other than the owner. Meanwhile, the number for businesses across the US is 17.6%.

These numbers indicate that Black owned businesses need access to greater resources in order to scale. With the proper support, it is estimated that helping just 15% of Black solopreneurs scale their business would add $55 billion to the US economy.


The State of Black Entrepreneurship

Black entrepreneurs are just beginning to scratch the surface of their potential. Without a doubt, there’s reason to be optimistic about the future of Black entrepreneurship. The resilience and innovation displayed by Black entrepreneurs past and present inspire not only individual achievement, but also contribute to the broader economic empowerment of the community in general.

As a Black-owned law firm, we understand the nuances of this journey and stand ready to support you in navigating the legal landscape. Reach out to us today, and let’s build a foundation that not only protects your enterprise but also propels it to new heights. Together, we can cultivate a future where Black-owned businesses not only survive but thrive.