Minority small business owners have increased greatly over the past 40 years.
The Small Business Administration (SBA) serves minority and special audiences through several programs to assist disadvantaged business owners to obtain business planning, financial assistance, business management training and government contracting. Since the early 1980s, the SBA, in conjunction with smaller minority group advocacy programs, has helped bridge the gap that has faced many minority small business owners.
History
In 1980, the SBA awarded a research contract to the University of Georgia's College of Business Administration to investigate the problems that minority contractors faced. They concluded "The author found that these minority- owned firms were generally less profitable, smaller in size, less effective in the utilization of their assets, and more highly leveraged than the non-minority sample firms." They recommended that the SBA redirect fuller attention and funding to minority owned businesses.
Significance
The result of the SBA putting more of a focus on minority owned businesses was programs such as the HUBZone program, and 8(a) business development. Minority owned small businesses grew 46 percent between 2002 and 2007, according to the U.S. Census Bureaus survey of small business owners. The SBA continues it's efforts to close the gap between minority owned businesses, which averaged an annual revenue of $179,000, compared to the average revenue of white-owned businesses annual revenue of $490,000.
Groups
Groups that the SBA monitors and assists as minority ethnic groups include African-American or Black, Hispanic or Latino, Asian, American Indian and Pacific Islander. Other groups include women and veterans as minorities as well. These groups have been unidentified as typically being smaller, having smaller receipts, and more economically disadvantaged than the U.S. firm's most popular business owner being a white male.
Time Frame
The time frame of these studies have been recorded since 1970 by the U.S. Census Bureau, and several smaller surveys have been conducted by contracted firms for more specific information gathering over the years. The studies have resulted in more minority based programs being targeted for assistance and priority for government contracting, which aided in the 46 percent increase of minority owned businesses between 2002 and 2007.
Speculation
A lack of access to adequate business funding is higher for minority business owners, which has an even larger impact while reconstructing from an economic crisis. According to a survey conducted by the Foster School of Business at the University of Washington, the confidence index of business prospects reported that over half small business owners felt that their businesses would improve over the next few months, with nearly a quarter of these reporting that they are confident in increased sales. These numbers are encouraging considering that economic distress disproportionately affects minority small business owners.
Tags: business owners, small business owners, minority owned businesses, owned businesses, small business, have been, 2002 2007
