Research Summary

Minority Women-Owned Firms Thriving

Center for Women’s Business Research  ·  June 25, 1997

Growth is triple the rate of overall business growth

IBM sponsored the NFWBO report the first detailed, up-to-date study of businesses owned by women of color.

The NFWBO report, “1996 Facts on Women-Owned Businesses: Trends Among Minority Women-Owned Firms,” shows that between 1987 and 1996, the number of minority women- owned firms increased by 153%, employment grew by 276%, and revenues rose by 318%. During this nine-year period, the number of Hispanic women-owned firms more than tripled (206%), the number of Asian/American Indian/Alaska Native women-owned firms more than doubled (138%), and the number of Black women-owned firms more than doubled (135%).

“One in eight (13%) of the nearly eight million women-owned businesses in the United States is owned by a woman of color,” noted Susan Peterson, NFWBO Chair and President of a Washington, DC-based communication training firm. These minority women-owned firms which number 1,067,000 employ nearly 1.7 million people and generate more than $184 billion in sales. “This information will help everyone who works with and serves the women-owned business market,” said Micki Napp, National Manager, Women in Business, IBM. “ For almost a decade, IBM has supported NFWBO research which has brought new visibility to the economic force of women-owned businesses and helps ensure they are taken seriously. The new report expands our knowledge by providing the most current data on the fastest growing women-owned businesses those firms owned by minority women entrepreneurs.”

The report based on the NFWBO’s detailed analysis of U.S. Census Bureau information estimates that in 1996, 37% of minority women-owned firms are owned by Blacks (405,200), 35% are Hispanic-owned (382,400), and 28% are owned by women of Asian, American Indian or Alaska Native heritage (305,700).

The new NFWBO report also documents that the greatest growth in the number of minority women-owned firms in recent years has been in non-traditional sectors. Between 1987 and 1996, the number of minority women-owned firms has grown by 319% in construction, 276% in wholesale trade, and 253% in transportation/communications/public utilities. “For the first time, we now have up-to-date information on firms owned by minority women, which demonstrates our importance to the economy,” said Phyllis Hill Slater, National Association of Women Business Owners president-elect and president of Hill Slater, Inc., a Long Island, NY-based engineering and architectural company. “This is a big step forward for women of color who own a business or are considering owning a business.”

The top 10 states for minority women-owned firms, based on an average ranking of number of firms, employment and sales, are: California; Texas; Florida; New York; Illinois; Virginia; Maryland; New Jersey; Hawaii; and Washington. The top 10 metropolitan areas, using the same formula, are: Los Angeles, CA; Miami, FL; New York, NY; Chicago, IL; Houston, TX; Washington, DC; Orange County, CA; San Francisco, CA; Oakland, CA; and Honolulu, HI.

“At IBM, we recognize women-owned businesses as a unique market segment that is growing faster than the economy in general,” commented Napp. “We have a high-caliber team addressing this market with IBM solutions, including hardware, software, services and support all aimed at helping women entrepreneurs compete more effectively.”

“As we increase in numbers and economic power, women-owned enterprises are beginning to resemble the profile of all U.S. businesses in size, age, creditworthiness, and industry distribution,” observed Peterson, NFWBO Chair. “But our research documents that these women business owners differ from their male counterparts in many ways, including how they manage, make decisions, select vendors, and use credit,” Peterson explained. “As women-owned firms continue to become more prominent in our economy, it is increasingly valuable for all businesses to understand, and benefit from these differences.”

Charts

Minority Women-Owned Businesses Growing Faster Than All Firms

Number of Asian, Black and Hispanic Women-Owned Businesses Has Increased Significantly in Last 9 YearsThere are Currently 1,067,000 Minority Women-Owned Firms in the U.S.The Top Ten States for Minority Women-Owned Firms, 1996

The comprehensive “1996 Facts on Women-Owned Businesses: Trends Among Minority Women- Owned Firms” includes four sets of fact sheets and accompanying tables: trends among all minority women-owned firms and among Asian/Other, Black, and Hispanic women-owned firms. Information includes the number, employment and sales revenues of minority women-owned firms, rankings by state, and growth by state and industry. The report is available for $130.00 (Discounts are available for NAWBO members and NFWBO corporate partners.)

The National Foundation for Women Business Owners (NFWBO) is a nonprofit research and leadership development foundation affiliated with the National Association of Women Business Owners (NAWBO). NFWBO’s mission is to strengthen women business owners and their enterprises by conducting research, sharing information, and increasing knowledge.

The sponsor of “1996 Facts on Women-Owned Businesses: Trends Among Minority Women- Owned Firms” is IBM, which is committed to meeting the business and working needs of today s women. As evidence of this commitment to women in business, the company has identified women in business as one of its 13 General Business segments, alongside such traditional industries as manufacturing, finance, retail and wholesale distribution.

Methodology Note: The 1996 estimates are derived by analyzing 1987 and 1992 data published by the U.S. Bureau of the Census and projecting these trends forward to 1996. Both the ethnic groupings and their names are taken directly from Census Bureau definitions.

The following general assumptions were made: 1) the growth rates between 1987 and 1992 would continue at the same rate through 1996; 2) the increase in the number of firms, employment and sales found by the addition of C corporations in 1992 at the state level would be the same among each minority group, both at the national and industry level; 3) the increases in number of firms, employment and sales accounted for by C corporations at the national level is also applied at the same rate at the state level.

The National Foundation for Women Business Owners (NFWBO) publishes a wide range of research studies, reporting on statistical trends among women-owned firms (nationally, state-by- state, in the 50 top metropolitan areas, and among minority women-owned firms) and documenting ways in which women business owners define success, finance their businesses, seek purchasing information and financial advice, meet the challenges of business ownership, provide benefits for their employees, use technology in the workplace, engage in volunteer activities, and take their firms global.

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