U.S. Black-Owned Businesses: Pre-Pandemic Trends & Challenges

10 Pages Posted: 7 May 2021

See all articles by Inara Tareque

Inara Tareque

Columbia Business School

Marlene Orozco

Stanford University

Paul Oyer

Stanford Graduate School of Business; National Bureau of Economic Research (NBER)

Jerry Porras

Stanford Graduate School of Business

Date Written: May 6, 2021

Abstract

This research brief leverages multiple datasets from the U.S. Census Bureau to provide a summary of the state of Black-owned businesses in the United States. It is important to understand and measure these pre-pandemic trends in order to pinpoint ways to truly build back better and address gaps in entrepreneurship. This research brief explores the challenges and opportunities facing Black entrepreneurs.

Some key findings include:

- Black individuals in the U.S. own businesses at a significantly lower rate than the White population, but at a similar rate to Latinos.

- Black-owned firms tend to be significantly smaller than White-owned firms.

- Despite the large scale-up gap, the number of Black-owned employer businesses grew at a higher rate than the U.S. average between 2012 and 2017.

This research brief also explores several potential factors, including the lack of access to and the cost of financial capital, that likely contributes to the scale-up gap experienced by Black-owned businesses.

Keywords: Entrepreneurship, Black Businesses, Black entrepreneurs, Finance, Debt, COVID-19, U.S. Census Bureau

Suggested Citation

Tareque, Inara and Orozco, Marlene and Oyer, Paul and Porras, Jerry, U.S. Black-Owned Businesses: Pre-Pandemic Trends & Challenges (May 6, 2021). Tareque, I.S., Orozco, M., Oyer, P., and Porras, J.I. (2021). U.S. Black-Owned Businesses: Pre-Pandemic Trends & Challenges. Center for Entrepreneurial Studies, Stanford Graduate School of Business. , Available at SSRN: https://ssrn.com/abstract=3841149

Inara Tareque (Contact Author)

Columbia Business School ( email )

New York, NY 10027

HOME PAGE: http://https://www.gsb.stanford.edu/contact/inara-s-tareque

Marlene Orozco

Stanford University ( email )

Stanford, CA 94305
United States

Paul Oyer

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States
650-736-1047 (Phone)
650-725-0468 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Jerry Porras

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

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