An overview of Black-owned businesses in the United States by industry, state and more

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The owner of Marcus Book Store, the oldest Black-owned bookstore in the United States, speaks with her employee about a display at a store in Oakland, California, in December 2021. (Amy Osborne/The Washington Post via Getty Pictures)
The owner of Marcus Book Store, the oldest Black-owned bookstore in the United States, speaks with her employee about a display at a store in Oakland, California, in December 2021. (Amy Osborne/The Washington Post via Getty Pictures)

More than one in five black adults in the United States say owning a business is essential to financial success, a study finds. September 2023 Pew Research Center survey. Even though Black-owned businesses have grown significantly in the United States in recent years, they still represent only a small share of total businesses and revenues, according to our analysis of federal data.

The Pew Research Center conducted this analysis to examine the characteristics of Black-owned businesses in the United States. The analysis is mainly based on data for the year 2022 Annual business survey (ABS), conducted by the US Census Bureau and the National Center for Science and Engineering Statistics of the National Science Foundation.

The survey — conducted annually since 2017 — includes all U.S. nonfarm businesses with paid employees and revenues of $1,000 or more in 2021. Businesses are defined as businesses “composed of one or more domestic establishments under their ownership or control. The survey characterizes majority ownership of a company as owning 51% or more of the company’s stock or equity. The Census Bureau counts multiracial business owners in all racial categories with which they identify; Hispanic business owners can be of any race. Learn more about the ABS methodology.

A bar chart showing that approximately 3% of U.S. businesses were owned by Black or African Americans in 2021.

In 2021, there were 161,031 American companies with majority black or African-American participationcompared to 124,004 in 2017, according to the latest estimates from the Annual business survey (ABS), conducted by the US Census Bureau and the National Science Foundation. Gross revenues for Black-owned businesses jumped 43% during this period, from an estimated $127.9 billion in 2017 to $183.3 billion in 2021.

Despite this growth, majority Black-owned businesses accounted for only about 3% of all U.S. businesses classifiable by the race and ethnicity of their owners in 2021. And they accounted for just 1% of gross revenue of all classifiable companies that year. For comparison, in 2021, about 14% of all Americans were black.

As did this has been the case for a long timeMajority-white-owned businesses accounted for the largest share of classifiable businesses (85%) and revenue (93%) in 2021. About one in ten classifiable businesses (11%) were majority-owned by Asian Americans , and none. more than 7% were majority owned by someone from another racial and ethnic group.

A note on classifiable societies

The Annual Business Survey classifies businesses as “majority black or African American owned” if a black owner owns at least 51% of the company’s equity. The same standard applies to business owners of other racial and ethnic backgrounds. The US Census Bureau counts multiracial business owners in all racial categories with which they identify; Hispanic business owners can be of any race.

Not all American businesses can be categorized by the race or ethnicity of their owners. In 2021, approximately 4% of all businesses in the United States were not classifiable by the race and ethnicity of their owners – although these businesses accounted for 61% of total revenue. The ownership and revenue figures in this analysis are based on the approximately 5.7 million businesses that were classifiable by the race and ethnicity of their owners in 2021, most of which are small businesses.

How many workers do black-owned businesses employ?

Companies with majority Black or African American ownership provided income to approximately 1.4 million workers in 2021. Their annual payroll was estimated at $53.6 billion.

Yet most Black-owned businesses tend to be smaller businesses. Two thirds had fewer than 10 employees in 2021; 13% had between 10 and 49 employees and only 3% had 50 or more. Another 16% said they had no employees. (The ABS determines job size based on the number of workers paid in the March 12 pay period.)

What is the most common industry for black-owned businesses?

By far, health care and social assistance. About 45,000 of the approximately 161,000 U.S. companies with majority Black or African American ownership, or 28% of the total, were in this sector in 2021.

Looked at in a different way, 7% of all U.S. businesses classifiable in the health care and welfare sector were majority black-owned that year..

A chart showing that health care and social assistance is the most common industry among black- or African-American-owned businesses.

Other common areas that year included:

  • Professional, scientific and technical services (accounting for 14% of all Black-owned businesses)
  • Administrative and support services as well as waste management and sanitation (8%)
  • Transportation and warehousing (8%)
  • Retail (6%)
  • Construction (6%)

Where are the black-owned businesses located?

A map showing that Black- or African-American-owned businesses made up the largest share of businesses in the District of Columbia, Georgia, and Maryland in 2021.

Most businesses with majority Black or African American ownership (87%) are located in urban areas. Only 5% are in rural areas, that is, areas with fewer than 2,500 inhabitants. the Census Bureau definition.

Some of the most populous states also have the highest number of majority Black-owned businesses. Florida had 18,502 such businesses in 2021, California had 15,014, and Georgia had 14,394.

Black-majority businesses accounted for the largest share of all classifiable businesses in the District of Columbia (15%), Georgia and Maryland (8% each).

Who are the black business owners?

  • These are more often men than women. In 2021, approximately 53% of Black-owned businesses had men as majority shareholders, while 39% had women as majority owners. Another 8% had equal ownership between men and women. The gender gap is wider among classifiable U.S. companies overall: 63% were majority-owned by men in 2021, 22% were majority-owned by women, and 14% had equal ownership between men and women.
  • They tend to be middle-aged. About half (49%) of Black or African American business owners who reported their age group were ages 35 to 54 in 2021. Another 28% were ages 55 to 64 and only 7% were under 35 years old.
  • The majority have a university degree. Among owners who reported attaining their highest level of education, 27% held a bachelor’s degree and 34% had a graduate or professional degree in 2021.

What motivates black entrepreneurs?

When asked to choose from a list of reasons why they opened their business, about nine in ten majority Black or African American owners who responded said an important reason was the opportunity to earn income higher ; a desire to be one’s own boss; or want the best avenue for their ideas, goods and services. Work-life balance (88%) and flexible hours (85%) are also frequently cited.

For most majority black or African-American homeowners, their business is their main source of income. Seven in ten people reporting income information in 2021 said this was the case.

Note: This is an update to an article originally published on February 21, 2023.

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