Yet Revenues and Employment are Lower than Average

Release Date:  February 21, 2007
Washington, DC – Firms owned by women of color are growing at five times the rate of all privately-held U.S. firms, according to estimates released today by the Center for Women’s Business Research.  Between 1997 and 2006, the number of privately-held firms that are 51% or more owned by women of color grew at 120%, while all privately-held firms grew by 24%.

The biennial update, Businesses Owned by Women of Color in the United States, 2006, was underwritten by a consortium of corporations and non-profit organizations and is part of a comprehensive, multi-year research initiative launched by the Center for Women’s Business Research and The Center for Women’s Leadership at Babson College.

“Women of color are embracing entrepreneurship as a powerful path to economic independence,” said Margaret Smith, chair, Center for Women’s Business Research.  “The growth rates in sales (49% between 1997 and 2006) and employment (38% between 1997 and 2006) are phenomenal.  These figures confirm our research over the past several years documenting that women of color business owners have high aspirations for business growth.”

As of 2006, the 2.1 million businesses majority owned (51% or more) by women of color employ more than one million workers and generate more than $161 billion in sales.   These firms represent 21% of all privately-held women-owned firms in the U.S., which means that one in five women-owned firms is owned by a woman or women of color.

Between 1997 and 2006, firms majority owned by African-American women grew 147% in number of businesses, 20% in number of employees and 70% in sales.  The number of firms with employees grew by 63%.   During the same period, firms majority owned by Hispanic women grew 121% in number of businesses, 18% in number of employees and 33% in sales.   The number of firms with employees grew 26%.  Businesses majority owned by Asian American women grew 80% between 1997 and 2006, 77% in number of employees and 57% in sales.  The number of firms with employees grew 52%.

Between 1997 and 2006, the number of firms majority owned (51% or more) by women of color outpaced the growth in number of firms owned by men of color.  This was true for women of color as a whole (120% vs. 68%), as well as within each race/ethnic group (See chart at end of release). 

“Despite the tremendous growth rates, we still see that the average firm earnings and average number of employees in businesses owned by women of color are dramatically less than all firms,” said Sharon Hadary, executive director, Center for Women’s Business Research.  “This is true for the aggregate of women of color entrepreneurs as well as within each race and ethnic group.  Our new research initiative, Accelerating the Growth of Businesses Owned by Women of Color, is designed to explore the challenges and barriers faced by women of color in increasing revenues and employment and to develop with these women business owners the personal, community and national action plans to address the barriers.”

A consortium of prestigious corporations and non-profit organizations that are committed to the growth and success of women-owned businesses and especially businesses owned by women of color are sponsoring the research initiative, Accelerating the Growth of Businesses Owned by Women of Color.  Corporate sponsors are Wal-Mart, Inc./Sam’s Club, UPS Capital, Wells Fargo, American Airlines, Avaya, Best Buy, IBM, , MasterCard, Principal Financial Group, Verizon and Wachovia.  Association sponsors and affiliates are the National Women’s Business Council, Level Playing Field Institute, National Association of Women Business Owners, Women Presidents’ Organization, Women’s Business Enterprise National Council, Women’s Leadership Exchange, Association of Women’s Business Centers, American China International Foundation and the Women’s Business Development Center – Philadelphia.

The full report, Businesses Owned by Women of Color in the United States, 2006, is available from the Center for Women’s Business Research for $90. (Discounts are available for Center Corporate Partners and members of affiliate associations.)  For further information, contact: Center for Women’s Business Research, 1411 K Street, NW, Suite 1350, Washington, DC 20005-3407.  Phone: 202-638-3060, ext. 710.  Email: info@womensbusinessresearch.org, Web site: www.womensbusinessresearch.org.