An Overview of the 2007 Survey of Business Owners

The State of Minority Business Enterprises:

An Overview of the 

2007 Survey of Business Owners

U.S. Department of Commerce, 

Minority Business Development Agency

by

Sumiye “Sue” Obuko, Ph.D. and Mark Planting

Fiscal year 2015

The State of Minority 

Business Enterprises:

We would like to acknowledge Ivonne Cunarro, former MBDA Senior Program Manager for directing the development 

of this study, guidance and review; Adam Goldman, former MBDA Research Analyst, and Nicol Turner-Lee, Ph.D. 

Research Expert, for their thorough review and editing. We would also like to thank Kimberly R. Marcus, Associate 

Director for Legislative, Education and Intergovernmental Affairs, for her stewardship; and Bridget Gonzales, Chief for 

the Office of Legislative, Education & Intergovernmental Affairs, for her editing and guidance. MBDA acknowledges 

feedback and comments received from the staff from the Bureau of Economic Analysis, Sue Helper and Nikolas Zolas, 

and the U.S. Census Bureau, Katherine Russell and Anthony Caruso.

The State of Minority Business Enterprises

3

Table of Contents

FORWARD..............................................................................................................................................................4

LIST OF TABLES AND FIGURES ........................................................................................................................5

EXECUTIVE SUMMARY.......................................................................................................................................6

INTRODUCTION ................................................................................................................................................ 10

NATIONAL PICTURE......................................................................................................................................... 10

Growth in Number of Firms ............................................................................................................................ 10

Growth in Gross Receipts for All Firms, Employer and Non-Employer.......................................................... 13

Growth in Numbers of Firms, Gross Receipts and Employment for Employer Firms .................................... 13

Average Gross Receipts.................................................................................................................................. 15

Entrepreneurial Parity .................................................................................................................................... 16

GEOGRAPHIC PICTURE ................................................................................................................................... 21

Analysis by States........................................................................................................................................... 21

Growth in Number of Firms ............................................................................................................................ 25

Growth in Gross Receipts ............................................................................................................................... 25

Combined Statistical Areas ............................................................................................................................ 27

INDUSTRY PICTURE......................................................................................................................................... 29

Average Gross Receipts.................................................................................................................................. 34

MBDA STRATEGIC GROWTH INITIATIVE (SGI) FIRMS AND NON-SGI FIRMS ...................................... 36

Growth in Number of Firms ............................................................................................................................ 36

Growth in Gross Receipts ............................................................................................................................... 39

Average Gross Receipts.................................................................................................................................. 39

Growth in Paid Employees.............................................................................................................................. 39

CONCLUSIONS.................................................................................................................................................. 40

APPENDIX A: RESEARCH METHODOLOGY ................................................................................................. 41

APPENDIX B: RELATIVE STANDARD ERROR TABLES .............................................................................. 44

APPENDIX C: MAPS ......................................................................................................................................... 54

REFERENCES..................................................................................................................................................... 57

ABOUT THE MINORITY BUSINESS DEVELOPMENT AGENCY.................................................................. 58
The State of Minority Business Enterprises

4

Forward

The changing demographics and economic landscape are increasingly positioning minority business enterprises (MBEs) 

as important contributors to the economic growth and productivity of the United States. These businesses are creating jobs 

and supporting the economic development of their respective communities, while promoting the placement of their goods 

and services in both domestic and global markets.

This report, The State of Minority Business Enterprises: An Overview of the 2007 Survey of Business Owners examines 

minority businesses operating in 2007 and the growth of these firms since 2002. It does so by analyzing and comparing 

data from the U.S. Census Bureau’s 2002 and 2007 Survey of Business Owners (SBO) and identifies the economic conditions 

under which MBEs operated as well as economic and business changes that occurred during the interval. We pick up from 

the Minority Business Development Agency’s (MBDA) last report issued in 2006 and look forward to offering even greater 

insight as we await the upcoming release of the 2012 SBO this year. This report adds to the body of research to ensure that we 

continue to capture and analyze the data and factors that impact the growth and global competitiveness of MBE’s. 

Upon careful review of the data, some inspiring elements emerged. More minority-owned businesses were established at 

every level of the growth spectrum-from small lifestyle enterprises to high-growth companies in technology, manufacturing 

and other burgeoning industry sectors in 2007. These businesses created millions of jobs nationwide at a faster pace than 

their nonminority counterparts. According to the report, minority-owned firms generated more than $1 trillion in annual 

sales in 2007 and employed over 5.8 million workers during that same period-a 24 percent growth in employment since 2002. 

Employment by nonminority-owned firms by comparison was flat during the same period. These trends are not surprising 

given the fact that the 2007 national economy was still relatively robust despite the start of an economic recession. 

In addition, larger minority businesses with annual gross receipts of $500,000 or more represented over 77 percent of all 

minority-owned firms’ gross receipts and 75 percent of all their employment in 2007. These firms provided millions of people 

with steady income jobs, and contributed to the nation’s economic vitality. 

Despite the growth in the number of MBEs, entrepreneurial parity was not achieved in 2007. Nonminority businesses still 

outpaced minority-owned firms in average gross receipts across all industry sectors, with the notable exception of minorityowned firms in the management of companies and enterprises (accounting, administration, operations, and finance). 

Improved access to capital and new markets continues to be an essential tool for minority-owned businesses to start, expand 

and reach their full potential.

As seismic national and global demographic shifts unfold, the face of American business is changing. If the U.S. is 

to remain globally competitive, it has to leverage these new levels of diversity as it gives American businesses a strategic 

advantage around the world. Engaging minority-owned firms is no longer an ethical imperative; it is also a commercial and 

economic one. Minority-owned businesses are a vital part of the economic engine of our country. As minority firms continue 

to grow in size, scale and capacity, we anticipate even greater opportunity for them in the global marketplace. 

MBDA is committed to the growth, expansion and support of minority-owned businesses and promoting awareness of 

the critical importance of these firms to U.S. global competitiveness. At MBDA, we understand the importance of not just 

capturing data, but the need to analyze and disseminate information to a broad group of stakeholders. We are excited to 

share this information as we endeavor to shape public policy and to educate local, state and federal decision-makers, while 

engaging MBEs to grow their businesses in size, scale and impact. We hope that this report proves useful and we look forward 

to continuing to provide the best information available to empower existing and emerging minority-owned firms.

Alejandra Y. Castillo

National Director

Minority Business Development Agency
The State of Minority Business Enterprises

5

List of Tables & Figures

List of Tables 

Table 1: Growth in Number of Firms and Receipts for Employer and Non-Employer Firms, 2002- 2007

Table 2: Growth in Number of Firms, Receipts and Employees for Employer Firms, 2002-2007

Table 3: Change in Average Gross Receipts for Employer and Non-Employer Firms by Minority Group, 2002-2007

Table 4: Top Five States for Minority Firms (Employer and Non-Employer) by Minority Group, 2007

Table 5: Share of Minority Firms (Employer and Non-Employer) and Minority Population by State, 2007

Table 6: Minority Firms (Employer and Non-Employer) by State and Minority Group, 2007

Table 7: Change in Employer and Non-Employer Minority Firms and Gross Receipts for All Firms and Population, 2002-

2007

Table 8: Top Five Combined Statistical Areas for Minority Firm (Employer and Non-Employer) Concentration, 2007

Table 9: Top Five Industry Sectors for Minority Firm (Employer and Non-Employer) Concentration, 2007

Table 10: Number of Firms (Employer and Non-Employer) by Industry Sector, 2007

Table 11: Distribution of Firms (Employer and Non-Employer) by Group and Industry, 2007

List of Figures

Figure 1: Change in Number of Firms and Gross Receipts for Employer and Non-Employer Firms, 2002-2007

Figure 2: Number of Minority Firms, Total Receipts, and Paid Employment Compared to Parity Estimates, 2007

Figure 3: Percentage of Minority Population, Number of Employer and Non-Employer Firms and Gross Receipts by 

Minority Group, 2007

Figure 4: Parity Comparison for Number of Employer and Non-Employer Minority Firms, 2002 and 2007

Figure 5: Parity Comparison for Total Receipts for Employer and Non-Employer Minority Firms, 2002 and 2007

Figure 6: Parity Comparison for Paid Employment for Employer Minority Firms, 2002 and 2007

Figure 7: Distribution for Minority-Owned Firms (Employer and Non-Employer) by Industry, 2007

Figure 8: Distribution of Nonminority Firms (Employer and Non-Employer) by Industry, 2007

Figure 9: Industries with the Highest Average Gross Receipts for Minority Firms and Nonminority Firms (Employer and 

Non-Employer), 2007

Figure 10: SGI and Non-SGI Firms as a Percentage of Minority Firms, 2007

Figure 11: Change in the Number of Firms, Gross Receipts and Paid Employment for All Minority and All Nonminority 

Firms, 2002-2007

Figure 12: U.S. Map of Minority Firms (Employer and Non-Employer), by State Concentration, 2007

Figure 13: U.S. Map of Change in Concentration of Minority Firms (Employer and Non-Employer) by State, 2002-2007

Figure 14: U.S. Map of Change in Gross Receipts of Minority Firms (Employer and Non-Employer) by State, 2002-2007
The State of Minority Business Enterprises

6

This report, The State of Minority Business Enterprises: An 

Overview of the 2007 Survey of Business Owners, provides 

an overview of minority business enterprises (MBEs) 

operating in 2007 and the growth of these firms since 2002. 

The report is part of the research generated by the Minority 

Business Development Agency (MBDA) to understand 

factors that impact a firm’s performance in order to develop 

strategies and programs that promote the growth and 

global competitiveness of MBEs. 

The data presented in this report is based on the 2007 

Survey of Business Owners (2007 SBO) and the 2002 

Survey of Business Owners (2002 SBO) published by the 

U.S. Census Bureau. Data in this report include statistics 

for employer firms, those with paid employees; and nonemployer firms, those without paid employees. 

Trends in the growth of minority-owned firms, both 

large and small, are presented in this report through 

comparisons between all U.S. firms and nonminorityowned firms, taking into consideration the market share 

of the U.S. minority population. This report also assesses 

the entrepreneurial parity of these firms, measured by the 

percentage share of minority-owned firms, their gross 

sales and paid employees, relative to the share of the U.S. 

minority population ages 18 and older. The data indicates 

both positive and negative trajectories as the U.S. economy 

grew, while homes sales and personal wealth were on the 

decline.

Key Findings

Minority-owned businesses continued to 

outpace the growth of nonminority firms in the 

number of firms and gross receipts between 

2002 and 2007. 

•	 In 2007, MBEs represented 21.9 percent (5.8 million) 

of all classifiable firms.1

 MBEs grossed 9.4 percent 

($1 trillion) of all annual gross receipts generated 

by classifiable firms, and MBEs with employees 

represented 10.3 percent (5.8 million) of all paid 

employees of classifiable firms.

•	 The number of minority-owned firms grew at a pace 

more than four times that of nonminority firms2

 from 

2002 to 2007. Minority-owned firms increased 45.5 

percent, from 4 million in 2002 to 5.8 million in 2007. 

Nonminority firms increased at a rate of 10.9 percent, 

rising from 18.5 million firms in 2002 to 20.5 million 

firms in 2007. 

•	 Between 2002 and 2007, gross receipts of minorityowned firms grew 55 percent (from $661.1 billion 

to $1 trillion), which was more than double that of 

nonminority firms at 22.2 percent (from $8.1 trillion to 

$9.9 trillion). 

•	 Regardless of size, minority-owned firms also outpaced 

the growth of nonminority firms in the number of 

firms, gross receipts and employment among larger 

firms (with receipts of $500,000 or more), and smaller 

firms (under $500,000 in receipts). 

•	 The number of larger minority firms (with receipts of 

$500,000 or more) increased 42.1 percent between 2002 

and 2007, while nonminority firms of comparable size 

grew 9.8 percent. 

•	 Gross receipts of larger minority firms increased 

59.2 percent, more than 2.5 times faster than the 

22.2 percent growth of all nonminority firms’ gross 

receipts.3

•	 Larger minority firms increased their number of 

employees by almost 27 percent, while similarly sized 

nonminority firms experienced a 7.7 percent reduction.

Executive Summary

1 “Classifiable firms” are all U.S. firms less publicly held, foreign-owned, nonprofit and other firms whose ownership cannot be classified by race, ethnicity, or 

gender. Classifiable firms include minority and nonminority owned firms. 

2 In this report, “nonminority firms” are defined as all firms less publicly held, 

not-for-profit or foreign-owned firms, and less minority firms. This definition 

differs from the U.S. Census definition of “nonminority firms” that excludes firms 

which are owned equally by minority and nonminority owners. The definition 

used in this report includes firms owned equally by minority and nonminority 

owners in the nonminority totals. The definition used in this report is consistent 

with definitions for 2002 data used in this and prior MBDA reports. 

3 Data for larger nonminority firms were unavailable for comparison. The 

difference between the growth in gross receipts for larger minority firms and all 

nonminority firms suggests that the growth in gross receipts of larger minority 

firms would have outpaced that of larger nonminority firms with sales of $500,000 

or more.
The State of Minority Business Enterprises

7

•	 Compared to the 1997-2002 period, the 2002-2007 

performance of minority-owned firms (for both 

employer and non-employer firms) showed more 

rapid growth in numbers of firms and gross receipts, 

than nonminority firms.4

 The data indicates sustained 

improvement in the growth and performance of 

minority-owned firms since 1997.

Average gross receipts of minority-owned 

businesses remained smaller compared to 

nonminority firms in 2007. 

•	 Despite the significant growth of minority-owned 

firms, these firms had smaller average gross receipts 

($178,000) compared to nonminority firms ($483,000) 

operating in 2007. 

•	 Average gross receipts of minority-owned firms grew 

slower than those of nonminority firms, 6.5 percent 

and 10.2 percent, respectively between 2002 and 2007. 

Minority employer firms outpaced the growth 

in firms, gross receipts and employment – while 

employment at nonminority employer firms 

remained flat between 2002 and 2007. 

•	 The number of minority-owned firms with employees 

(“minority employer firms”) grew at a significantly 

higher rate, 21.7 percent, than nonminority employer 

firms, that declined by 2.6 percent between 2002 and 

2007. 

•	 Gross receipts of minority employer firms increased by 

54.3 percent compared to 22.4 percent for nonminority 

employer firms.

•	 Between 2002 and 2007, paid employment grew faster 

at minority firms (24.4 percent) compared to that of 

nonminority firms (0.2 percent), all U.S. firms (5.9 

percent), and publicly held firms (9.5 percent). 

Entrepreneurial parity for minority-owned firms 

was not reached in 2007 when compared to the 

size of the U.S. minority population. 

Entrepreneurial parity is a measure used to determine the 

level of minority business participation at a rate comparable 

to their proportion of the U.S. population. Parity would be 

reached when the share of the number of minority-owned 

firms, gross receipts and employment is equivalent to the 

percentage share of the minority population 18 years old 

and older.5

 

•	 In 2007, the adult minority population6 represented 

31.5 percent of the U.S. population 18 years old and 

older (71.5 million), up from 29 percent in 2002 (62.5 

million). 

•	 Although the minority adult population represented 

31.5 percent of the U.S. population in 2007, minorityowned businesses (5.8 million) accounted for only 21.9 

percent of all classifiable firms (26.3 million) in 2007, 

generated 9.4 percent (about $1 trillion) of classifiable 

firms’ gross receipts of $10.9 trillion, and employed 

10.3 percent (5.8 million) of all classifiable firms’ paid 

employees (56.6 million). 

•	 The gap in entrepreneurial parity for minority-owned 

firms narrowed in terms of number of firms between 

2002 and 2007, but widened slightly for paid employees 

and for gross receipts. Minority-owned firms 

represented 21.9 percent of all classifiable firms in 2007, 

up from 17.6 percent in 2002. The difference in share 

of the number of firms (4.3 percent) between 2002 and 

2007 was greater compared to the difference in share of 

the minority adult population (2.5 percent), for which 

the parity gap narrowed. 

•	 The share of minority gross receipts increased from 

7.6 percent in 2002 to 9.4 percent in 2007, and paid 

employees from 8.5 percent to 10.3 percent. Parity 

in gross receipts would have required an additional 

$2.4 trillion in 2007, compared to $1.8 trillion in 

4 See U.S. Department of Commerce, Minority Business Development Agency, 

The State of Minority Business Enterprises: An Overview of the 2002 Survey of 

Business Owners. Washington D.C., August 2006. See more in Appendix A 

regarding comparisons. 

5 U.S. Department of Commerce, Minority Business Development Agency, The 

State of Minority Business Enterprises: An Overview of the 2002 Survey of Business 

Owners (2006), 12-14. 

6 Minority population is calculated from the U.S. Census Bureau population 

estimates as total population less non-Hispanic white population. 
The State of Minority Business Enterprises

8

2002. Parity in paid employees would have required 

12 million more employees in 2007, compared to 11.4 

million in 2002. 

•	 According to the data, no minority-owned firms, 

despite their general growth, reached parity in gross 

receipts and employment compared to that of all 

classifiable firms, except for Asian-owned firms.7

 These 

firms exceeded parity in number of firms compared to 

their adult population share in 2002.

States showing the fastest growth in MBE gross 

receipts in 2007 included Vermont, Washington, 

Utah, Nevada and Missouri suggesting growth 

beyond the most concentrated MBE states 

(California, Texas, Florida, New York and 

Georgia).

•	 Minority firms did not approach parity in any state, 

and the gap was wide for all states, except for Florida. 

•	 In 2007, minority-owned firms were most concentrated 

in five states: California (1,220,580); Texas (723,057); 

Florida (680,069); New York (537,544); and Georgia 

(263,356). These five states represented 59.5 percent 

of all MBEs in the U.S. and 50.9 percent of the nation’s 

total minority population. 

•	 States showing the fastest rates of growth in gross 

receipts were: Vermont with 193.1 percent growth; 

Washington with 142.5 percent; Utah with 101.5 

percent; Nevada with 99.4 percent; and Missouri with 

82.7 percent. Only Nevada ranked among the top 

five states with highest rates of growth in both the 

number of minority-owned firms and in gross receipts. 

Twenty-eight of the 50 states also had percentage 

changes in gross receipts greater than in the number 

of firms, suggesting improved overall performance of 

minority firms in these states. 

•	 The number of minority-owned firms also grew fastest 

in five states: 91.3 percent in Georgia; 87.2 percent 

in Nevada; 84.5 percent in Alabama; 66.1 percent in 

North Carolina; and 66 percent in Florida.

Minority-owned firms were widely distributed 

among all 19 industry sectors in 2007.8

•	 Minority-owned firms were most concentrated in 

the following industry sectors: health care and social 

assistance; administrative and support and waste 

management and remediation services; professional, 

scientific, and technical services; and other services.9 

•	 Average gross receipts of minority-owned firms by 

industry sector were smaller compared to those of their 

nonminority counterparts, except for minority-owned 

firms in the management of companies and enterprises 

industry sector. Average gross receipts for MBEs in the 

management of companies and enterprises industry 

sector were $2.3 million compared to $1.8 million for 

nonminority firms in 2007. The difference between 

the two groups of firms in this industry increased 

from that in 2002, when the average gross receipts for 

nonminority-owned firms was $1.2 million and for 

minority firms, $1.3 million.10

Conclusion

Minority-owned enterprises grew in number of firms 

at a much faster pace than their gross receipts, average 

gross sales, or paid employment between 2002 and 2007. 

The data also demonstrate that minority-owned firms 

outperformed the growth of nonminority-owned firms in 

all four measures during the same period. Despite these 

gains, however, gross receipts and average sales of minorityowned firms remained lower than those of nonminority 

firms. While entrepreneurial parity narrowed, in terms of 

7 Asian firms do not include firms owned by Native Hawaiians and Other Pacific 

Islanders. Parity may have not been reached by all ethnic groups within the 

category of Asian-owned firms. 

8 The North American Industry Classification System (NAICS) is the standard 

used by federal statistical agencies in classifying business establishments for the 

purpose of collecting, analyzing, and publishing statistical data related to the U.S. 

business economy. The NAICS contains 19 industry sectors at the two-digit code 

level.

9 The category of “Other Services” includes establishments not provided for 

elsewhere in the classification system that are engaged in activities such as 

equipment and machinery repairing, promoting religious activities, grant-making, 

advocacy, providing dry-cleaning and laundry services, personal care services, 

and dating services. It does not include public administration.

10 MBDA utilized a combination of 2002 Survey of Business Owners (SBO) 

releases for this calculation. The most recent SBO estimate for minorityowned receipts in NAICS 55 is withheld to avoid disclosing data for individual 

companies. See Survey of Business Owners (SBO): Company Statistics Series: 

Statistics for Minority-Owned Firms by State, Selected Metropolitan Statistical 

Area, and Kind of Business, 2002.
The State of Minority Business Enterprises

9

the numbers of minority-owned businesses between 2002 

and 2007, the gap widened slightly for paid employment 

and gross receipts. MBEs did not close the parity gap 

in terms of number of firms, gross receipts and paid 

employment when compared to their share of the U.S. adult 

population. 

Minority-owned employer firms continued to be an engine 

of job opportunities between 2002 and 2007, despite the 

above mentioned disparities in parity. As the data suggest, 

minority-owned firms contributed to the U.S. economy 

with positive growth in employment regardless of firm size, 

while nonminority-owned firms experienced a decline in 

employment among their larger firms, along with a very 

modest increase in employees among their smaller firms. 

The data in the report indicates that advancing the 

economic and financial performance of minority-owned 

businesses must be a national priority. The state of minority 

businesses in 2007 suggests this will require expanding 

opportunities for these firms and convening government, 

educational institutions and the private sector to develop 

solutions that effectively enable MBEs to be successful, 

while addressing barriers to market entry.

The data in this report also surfaces the importance of 

these strategies for increasing average gross receipts, 

enabling these firms to hire workers, and, in turn, build 

more sustainable communities, cities, and states. Moving 

forward, research that builds upon the state of minority 

businesses could explore more opportunities to help these 

firms enhance capacities, increase access to capital and 

strive towards greater economic parity.
The State of Minority Business Enterprises

10

This report, The State of Minority Business Enterprises: An 

Overview of the 2007 Survey of Business Owners, provides 

an overview of minority-owned businesses operating in 

2007 and the growth of these firms since 2002. The report 

is part of the research generated by the Minority Business 

Development Agency (MBDA) to understand factors that 

impact a firm’s performance in order to develop strategies 

and programs that promote the growth and survival of 

minority business enterprises (MBEs). Trends in the 

growth of minority-owned firms, both in number and 

gross receipts, are also presented in this report.11 These 

trends are based on comparisons between all U.S. firms 

and nonminority-owned firms, taking into consideration 

the market share of the U.S. minority population. In the 

end, this report assesses the entrepreneurial parity of these 

firms, measured by the percentage share of minority-owned 

firms, their gross sales and paid employees, relative to the 

share of U.S. minority population age 18 and older.

The findings presented in this report are based on data 

from the 2007 Survey of Business Owners (2007 SBO) and 

the 2002 Survey of Business Owners (2002 SBO) published 

by the U.S. Census Bureau. Data in this report include 

statistics for employer firms, those with paid employees; 

and non-employer firms, those without paid employees. 

A more detailed research methodology is included in 

Appendix A of the report.

National Picture

In this report, “classifiable firms” refer to all U.S. firms less 

publicly held, foreign-owned, non-profit and other firms 

whose ownership cannot be classified in terms of race, 

ethnicity or gender. In 2007, MBEs in the United States 

represented 21.9 percent (5.8 million) of all classifiable 

firms. MBEs grossed 9.4 percent ($1 trillion) of all annual 

gross receipts generated by classifiable firms, and MBEs 

with employees represented 10.3 percent (5.8 million) of 

all paid employees of classifiable firms. These positive 

trends for MBEs are significant given the 2007 national 

economic profile where some businesses managed to 

flourish in the midst of declining home sales and personal 

wealth.

Growth in Number of Firms

The number of minority-owned firms grew at a pace more 

than four times that of nonminority firms from 2002 to 

2007. 12 Minority-owned firms increased 45.5 percent, 

from 4 million in 2002 to 5.8 million in 2007. Nonminority 

firms increased at a rate of 10.9 percent, rising from 18.5 

million firms in 2002 to 20.5 million firms in 2007 (Table 1). 

11 In this report, the terms “minority business enterprises” (MBEs) and minorityowned firms will be used interchangeably.

12 In this report, “nonminority firms” are defined as all firms less publicly held, 

not-for-profit or foreign-owned firms, and less minority firms. This definition 

differs from the U.S. Census definition of “nonminority firms” that excludes firms 

which are owned equally by minority and nonminority owners. The definition 

used in this report includes firms owned equally by minority and nonminority 

owners in the nonminority totals. The definition used in this report is consistent 

with definitions for 2002 data used in this and prior MBDA reports. 

Introduction
The State of Minority Business Enterprises

11

Table 1: Growth in Number of Firms and Receipts for Employer and Non-Employer Firms, 2002-2007

Group Year Number of All 

Firms

Percent 

Change

Annual Gross Receipts 

for All Firms ($1,000s)

Percent 

Change

African American

2007 1,921,864

60.5%

$135,739,834

53.1%

2002 1,197,567 $88,641,608

American Indian and Alaska 

Native

2007 236,691

17.5%

$34,353,842

27.8%

2002 201,387 $26,872,947

Asian

2007 1,549,559

40.4%

$506,047,751

54.9%

2002 1,103,587 $326,663,445

Hispanic

2007 2,260,269

43.6%

$350,661,243

58.0%

2002 1,573,464 $221,927,425

Native Hawaiian and Other 

Pacific Islander

2007 37,687

30.2%

$6,319,357

47.7%

2002 28,948 $4,279,591

Total Minority

2007 5,759,209

45.5%

$1,024,801,958

55.0%

2002 3,958,610 $661,148,403

Nonminority

2007 20,535,651

10.9%

$9,924,659,916

22.2%

2002 18,521,646 $8,122,392,743

All Classifiable Firms

2007 26,294,860

17.0%

$10,949,461,874

24.7%

2002 22,480,256 $8,783,541,146

Publicly Held and Other 

Firms

2007 798,048

61.4%

$19,082,058,036

38.1%

2002 494,399 $13,820,117,758

All Firms

2007 27,092,908

17.9%

$30,031,519,910

32.9%

2002 22,974,655 $22,603,658,904

Sources: Survey of Business Owners (SBO); Geographic Area Series: Economy-Wide Estimates of Business Ownership by Gender, Hispanic or 

Latino Origin, and Race, 2002; Statistics for All U.S. Firms by Industry, Gender, Ethnicity, and Race for the U.S., States, Metro Areas, Counties, and 

Places, 2007. RSEs are available in Appendix B.

Between 2002 and 2007, the data reveal that the number of African American firms grew the fastest at 60.5 percent, 

followed by Hispanic firms at 43.6 percent, and Asian firms at 40.4 percent. The growth in number of Native Hawaiian and 

Other Pacific Islander firms and American Indian and Alaska Native firms, was 30.2 percent and 17.5 percent, respectively 

(Figure 1). 
The State of Minority Business Enterprises

12

Figure 1: Change in Number of Firms and Gross Receipts for Employer and Non-Employer Firms, 

2002-2007

Source: Statistics for All U.S. Firms by Industry, Gender, Ethnicity, and Race for the U.S., States, Metro Areas, Counties, and Places, 2007. 

0

10

20

30

40

50

60

70

80

Number of Firms Gross Receipts

Percenttag

e

African 

American

60.5%

58.1%

17.5%

27.8%

40.4%

54.9%

43.6%

58.0%

30.2%

47.7% 45.5%

55.0%

10.9%

22.2%

61.4%

38.1%

32.9%

17.9%

American

Indian

and

Alaska 

Native

Asian Hispanic Native

Hawaiian

and

Pacific

Islander

Total

Minority

NonMinorityPublicly 

Held and 

Other 

Firms

All Firms
The State of Minority Business Enterprises

13

Growth in Gross Receipts for All Firms, Employer 

and Non-Employer

A key indicator of minority business growth can be 

found in the assessment of firms’ gross receipts. MBEs 

experienced a 55 percent increase in gross receipts between 

2002 and 2007, which was more than double that of 

nonminority firms at 22.2 percent. In 2002, gross receipts 

of minority firms were $661.1 billion and $1 trillion in 

2007. During this same time period, nonminority firms 

had sales of $8.1 trillion in 2002 and $9.9 trillion in 2007. 

Compared to the 1997-2002 period, the data demonstrate 

an increase in the number of firms and gross receipts 

between 2002 and 2007. During the latter period, the rise 

in the number of minority-owned firms (both employer 

and non-employer) was significant, 45.5 percent compared 

to 35 percent between 1997 and 2002. Moreover, gross 

receipts for minority businesses increased by 55 percent 

during the same period, much higher than the 13 percent 

growth of the previous five-year period.13 

Among minority firms, the gross receipts of Hispanic firms 

grew the fastest at 58 percent, followed by Asian firms at 

54.9 percent, and African American firms at 53.1 percent 

between 2002 and 2007.14 In 2002, Asian firms generated 

$326.7 billion compared to $506 billion in 2007. Hispanic 

firms had gross receipts of $221.9 billion in 2002 and $350.7 

billion in 2007. African American firms were at $88.6 

billion and $135.7 billion in 2002 and 2007 respectively. 

While gross receipts of Native Hawaiian and Other Pacific 

Islander firms and American Indian and Alaska Native 

firms grew at a slower pace between 2002 and 2007, at 47.7 

percent and 27.8 percent, respectively, their pace of growth 

was still higher than that of nonminority firms during the 

same period.15

Growth in Numbers of Firms, Gross Receipts and 

Employment for Employer Firms

The number of minority-owned firms with employees 

also experienced an increase in gross receipts and paid 

employment compared to those of nonminority-owned 

employer firms. Minority employer firms grew at a 

significantly higher rate, 21.7 percent, than nonminority 

employer firms, which declined by 2.6 percent between 

2002 and 2007. This rapid growth aligned with the increase 

in number of employees in minority firms, 24.4 percent. 

Nonminority firms during the same period only increased 

their paid employees by 0.2 percent (Table 2).

13 U.S. Department of Commerce, Minority Business Development Agency, 

The State of Minority Business Enterprises: An Overview of the 2002 Survey of 

Business Owners. Washington D.C., August 2006. Please note that the numbers 

in Table 1 are not completely comparable due to differences in the 2002 Survey 

of Business Owners and 2007 Survey of Business Owners. See more in Appendix 

A regarding comparisons. 

14 The growth rates for Hispanics, Asians, and African Americans were not 

significantly different at the 90 percent confidence interval.

15 The growth rate for Native Hawaiians and Other Pacific Islanders was not 

significantly different from the rates for African Americans, Asians or Hispanics 

at the 90 percent confidence interval.
The State of Minority Business Enterprises

14

Table 2: Growth in Number of Firms, Receipts and Employees for Employer Firms, 2002-2007

Group Year

Number of 

Employer 

Firms

Percent 

Change

Annual Gross 

Receipts 

($1,000s)

Percent 

Change

Number of 

Employees 

of Employer 

Firms

Percent 

Change

African American

2007 106,566

12.7%

$97,144,898

47.6%

909,552

20.6%

2002 94,518 $65,799,425 753,978

American Indian 

and Alaska Native

2007 23,662

-3.4%

$27,494,075

25.0%

185,037

-3.3%

2002 24,498 $21,986,696 191,270

Asian

2007 397,426

24.4%

$453,574,194

55.8%

2,807,771

26.8%

2002 319,468 $291,162,771 2,213,948

Hispanic

2007 248,852

24.7%

$279,920,707

55.9%

1,908,161

24.2%

2002 199,542 $179,507,959 1,536,795

Native Hawaiian 

and Other Pacific 

Islander

2007 4,151

**12.4%

$5,250,301

49.9%

37,801

28.9%

2002 3,693 $3,502,157 29,319

Total Minority

2007 766,533

21.7%

$860,492,119

54.3%

5,816,114

24.4%

2002 629,831 $557,774,029 4,675,382

Nonminority

2007 4,423,435

-2.6%

$9,154,650,843

22.4%

50,810,440

0.2%

2002 4,542,233 $7,481,478,680 50,692,834

All Classifiable Firms

2007 5,189,968

0.4%

$10,015,142,962

24.6%

56,626,554

2.3%

2002 5,172,064 $8,039,252,709 55,368,216

Publicly Held and 

Other Firms

2007 545,594

54.7%

$19,043,685,514

38.0%

60,683,564

9.5%

2002 352,720 $13,796,996,645 55,398,389

All Firms

2007 5,735,562 3.8% $29,058,828,476 33.1% 117,310,118 5.9%

2002 5,524,784 $21,836,249,354 110,766,605

Sources: Survey of Business Owners (SBO): Geographic Area Series: Economy-Wide Estimates of Business Ownership by Gender, Hispanic or 

Latino Origin, and Race, 2002; Statistics for All U.S. Firms by Industry, Gender, Ethnicity, and Race for the U.S., States, Metro Areas, Counties, and 

Places, 2007. Note: The ** denotes that the value is not significantly different from zero at the 90 percent confidence interval. RSEs are available 

in Appenidix B.

As shown in Table 2, the growth rate of gross receipts of minority employer firms was more than double that of 

nonminority employer firms, at 54.3 percent and 22.4 percent, respectively. Hispanic and Asian firms grew the fastest by 

24.7 percent and 24.4 percent, respectively, during the same period.16 Growth of other minority firms was slower with 

African American firms only growing at a rate of 12.7 percent, and American Indian and Alaska Native firms declining 3.4 

percent during the same period.

16 The growth rates for Hispanic and Asian firms are not significantly different 

from each other at the 90 percent confidence interval.
The State of Minority Business Enterprises

15

Hispanic and Asian employer firms grew faster than all 

other racial/ethnic firms in gross receipts at 55.9 percent 

and 55.8 percent respectively between 2002 and 2007.17

Gross receipts of Hispanic firms were $179.5 billion in 2002 

and $279.9 billion in 2007. Asian firms grew from $291.2 

billion in 2002, to $453.6 billion in 2007. Gross receipts of 

Native Hawaiian and Other Pacific Islander firms increased 

by 49.9 percent, and African American firms grew by 47.6 

percent during the same period.18 The growth in gross 

receipts of American Indian and Alaska Native firms was 25 

percent, despite the decline in their number of firms, from 

24,498 to 23,622.

Between 2002 and 2007, the rate of hiring of minority 

employer firms outpaced that of nonminority firms. The 

percentage increase in employees of minority-owned firms 

was 24.4 percent, while that of nonminority firms was 

only 0.2 percent and that for all U.S. firms, 5.9 percent. 

Paid employment increased at Native Hawaiian and Other 

Pacific Islander firms from 29.3 thousand in 2002 to 37.8 

thousand in 2007, or 28.9 percent.19 The growth rate in 

employment for Asian firms was 26.8 percent, from 2.2 

million to 2.8 million in 2007, followed closely by Hispanic 

firms at 24.2 percent, from 1.5 million to 1.9 million in 

2007. African American firms increased employment by 

20.6 percent. American Indian and Alaska Native firms 

showed a decline in employees of 3.3 percent, reflecting a 

decrease in the number of firms over this period. 

Although minority-owned firms average smaller gross 

receipts and employment compared to nonminority firms, 

the findings indicate that minority-owned firms employ 

a greater number of workers per dollar of sales generated 

by their firms compared to nonminority and all U.S. firms. 

While gross receipts generated by minority-owned firms 

represented about 8.6 percent of all classifiable firms’ gross 

receipts and three percent of the receipts generated by all 

U.S. firms, the number of employees at minority-owned 

firms represented 10.4 percent of all workers employed by 

classifiable firms, and five percent of all employees at U.S. 

firms in general. 

Average Gross Receipts

Average gross receipts of minority-owned firms grew at a 

slower pace compared to that of nonminority-owned firms 

between 2002 and 2007 (6.5 percent versus 10.2 percent). 

These disparities could be due to the differences in relative 

size of gross receipts and number of firms. Gross receipts 

of nonminority firms were much greater, almost 10 times 

larger than those of minority firms, while the number 

of nonminority firms was four times larger than the 

number of minority firms. Although the pace of growth 

of gross receipts (55 percent) and number (45.5 percent) 

of minority-owned firms was considerably higher than 

those of nonminority firms (22.2 percent and 10.9 percent, 

respectively), minority-owned firms would still need 

to grow at a faster rate to reach the average size of their 

nonminority counterparts. Moreover, comparisons in size 

of firms are heavily influenced by their industry sector that 

is analyzed later in the report. 

Among minority-owned firms, average gross receipts of 

Native Hawaiian and Other Pacific Islander firms grew the 

fastest (13.4 percent), followed by Asian firms (10.3 percent), 

and Hispanic firms (10 percent). African American-owned 

firms were the only ones to register negative growth of 

average gross receipts between survey periods. The average 

gross receipts of African American firms declined 4.6 percent 

between 2002 and 2007 as did publicly held firms whose 

average receipts declined 14.5 percent. 

The decline in average gross receipts for African American 

firms can be largely attributed to the challenges in accessing 

adequate capital to grow in size and scale (Table 3). 

Moreover, African American and Hispanic households 

continue to have much lower household net worth 

compared to nonminority and Asian households.20 As one 

of several characteristics for MBEs, low net worth is one of 

the barriers that curtail the ability of these firms to access 

capital from traditional sources such as bank loans, which 

often require large amounts of collateral for loan approvals 

or guarantees of personal credit. 

17 Hispanic and Asian firms’ gross receipts growth rates are not significantly 

different at the 90 percent confidence level.

18 African American and Native Hawaiians and Other Pacific Islander firms’ 

gross receipts growth rates are not significantly different at the 90 percent 

confidence level.

19 African American and Native Hawaiian and Other Pacific Islander firms’ 

paid employment growth rates are not significantly different at the 90 percent 

confidence level.

20 See Robert Fairlie and Alicia Robb, Disparities in Capital Access between 

Minority and Nonnminority-Owned Businesses: The Troubling Reality of Capital 

Limitations Faced by MBEs, U.S. Department of Commerce, Minority Business 

Development Agency, Washington, D.C., 2010; See also, Robert Fairlie and 

Alicia Robb, Race and Entrepreneurial Success: Black-, Asian-, and WhiteOwned Businesses in the United States. Cambridge: MIT Press, 2008. 
The State of Minority Business Enterprises

16

Table 3: Change in Average Gross Receipts for Employer and Non-Employer Firms by Minority Group, 

2002-2007

Group Average Gross Receipts per Firm Percent 

Change 2002 2007

African American $74,018 $70,629 -4.6%

American Indian and Alaska Native $133,439 $145,142 8.8%

Asian $296,002 $326,575 10.3%

Hispanic $141,044 $155,141 10.0%

Native Hawaiian and Other Pacific Islander $147,837 $167,680 13.4%

Total Minority $167,015 $177,941 6.5%

Nonminority $438,535 $483,289 10.2%

Publicly Held and Other Firms $27,953,369 $23,910,915 -14.5%

All Firms* $983,852 $1,108,464 12.7%

Sources: Survey of Business Owners (SBO): Geographic Area Series: Economy-Wide Estimates of Business Ownership by Gender, Hispanic or 

Latino Origin, and Race, 2002; Statistics for All U.S. Firms by Industry, Gender, Ethnicity, and Race for the U.S., States, Metro Areas, Counties, and 

Places, 2007. Note: The values are calculated from U.S. Census data and statistical significance could not be tested. The * denotes the average for 

all firms.

Entrepreneurial Parity

In this report, entrepreneurial parity is an aspirational benchmark for the economic potential of MBEs and defined as 

a rate comparable to the percentage of minorities in the U.S. population. Parity would therefore be reached when the 

performance of minority-owned firms approaches the percentage share of the minority population 18 years old and over.21 

The measures examined here for exploring entrepreneurial parity include: number of minority-owned firms, total receipts 

and paid employees.22

In 2007, the 18 and older minority population represented 31.5 percent of the total U.S. population, or an estimated 

population of 71.5 million. Minority-owned businesses (5.8 million) accounted for 21.9 percent of all classifiable firms 

(26.3 million) in 2007, an increase of four percent since 2002. Minority firms also represented 9.4 percent (about $1 

trillion) of all classifiable firms’ gross receipts of $10.9 trillion, and employed 10.3 percent (5.8 million) of all classifiable 

firms’ paid employees. Figures 2 and 3 provide more detail.

Although minority-owned firms did not reach parity with all classifiable firms in 2007, their gross receipts and number of 

firms increased since 2002. Compared to 2002, the number of minority-owned firms grew four percent, from 18 percent in 

2002 to 21.9 percent in 2007. Gross receipts from minority firms also increased by almost two percent, from 7.6 percent to 

9.4 percent, and employment, by almost two percent, from 8.5 percent to 10.3 percent. (See Table 1) 23

21 Individuals under the age of 18 in the U.S. were excluded due to their unlikelihood of being business owners and to more accurately reflect entrepreneurial parity. 

The minority population is also calculated from the U.S. Census Bureau Population estimates as total population less non-Hispanic, white population. See also Robert 

Fairlie and Alicia Robb, op. cit., p. 12. 

22 Ibid., p. 12.
The State of Minority Business Enterprises

17

Figure 2: Number of Minority Firms (millions), Total Receipts (trillions), and Paid Employment 

(millions) Compared to Parity Estimates, 2007

Source: U.S. Census Bureau National Intercensal Estimates, Statistics for All U.S. Firms by Industry, Gender, Ethnicity, and Race for the U.S., 

States, Metro Areas, Counties, and Places, 2007. Note: Data for number of firms and receipts are for employer and non-employer firms. Data 

for employment is for employer firms. Parity is equal to the percentage share of the minority population 18 and over applied to the number of 

firms, gross receipts and number of paid employees of classifiable firms. 

 Number of Minority Firms (millions) Gross Receipts (trillions) Paid Employees (millions)

5.8

1.0

8.3

3.4

17.8

5.8

2007 Actual 2007 Parity 2007 Actual 2007 Parity 2007 Actual 2007 Parity

0

2

4

6

8

10

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

0

5

10

15

20

5.8

1.0

8.3

3.4

17.8

5.8

2007 Actual 2007 Parity 2007 Actual 2007 Parity 2007 Actual 2007 Parity

0

2

4

6

8

10

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

0

5

10

15

20

5.8

1.0

8.3

3.4

17.8

5.8

2007 Actual 2007 Parity 2007 Actual 2007 Parity 2007 Actual 2007 Parity

0

2

4

6

8

10

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

0

5

10

15

20
The State of Minority Business Enterprises

18

Despite their general growth, no minority group reached 

parity in gross receipts and employment compared to 

that of all classifiable firms, except for Asian firms which 

exceeded parity in the number of firms compared to 

their adult population share in 2002.24 For minorityowned firms, three factors can be correlated with their 

survival rates - educational attainment, level of capital at 

establishment, and length of business experience. Among 

Asian firms, these variables were higher compared to other 

minority groups. American Indian and Alaska Native firms 

approached parity, representing one percent of the U.S. 

population 18 years and older and owned 0.9 percent of 

classifiable U.S. businesses (Figure 3).

The gap in entrepreneurial parity narrowed in terms of 

number of firms between 2002 and 2007, but widened 

slightly for paid employees and gross receipts. The same 

number of firms – 2.5 million – would have been required 

in 2007 as in 2002 to reach parity. More importantly, parity 

in gross receipts would have required an additional $2.4 

Figure 3: Percentage of Minority Population, Number of Employer and Non-Employer Firms and Gross 

Receipts by Minority Group, 2007

Source: U.S. Census Bureau National Intercensal Estimates, Statistics for All U.S. Firms by Industry, Gender, Ethnicity, and Race for the U.S., 

States, Metro Areas, Counties, and Places, 2007. Data for firms are for all minority firms, employer and non-employer.

23 U.S. Department of Commerce, Minority Business Development Agency, 

The State of Minority Business Enterprises: An Overview of the 2002 Survey of 

Business Owners. Washington D.C., August 2006, p. 13 (See Chart 3).

24 According to Fairlie and Robb (2010), the Asian population 18 years and 

older comprised 4.7 percent of the U.S. population in this age group, and Asian 

firms owned 5.9 percent of classifiable businesses..

0

5

10

15

20

25

30

35

Percentage of Classified Firms’ Gross Receipts

Percentage of Classified Firms’ Employees

Percentage of Total Population

Percentage of Classified Firms

Percenttage

African 

American

12.0

8.6

3.2

0.2 0.1 0.1 0.1

3.4

12.1

1.0 0.9 0.3 0.3

4.7

5.9

4.6

5.0

7.3

1.2 1.6

31.5

21.9

9.4 10.3

American

Indian

and

Alaska 

Native

Asian Hispanic Native

Hawaiian

and

Pacific

Islander

All

Minority
The State of Minority Business Enterprises

19

trillion in 2007, compared to $1.8 trillion in 2002. Twelve 

million more workers would have also been required 

in 2007, compared to 11.4 million in 2002, to reach 

entrepreneurial parity between minority and nonminority 

firms. Thus, despite gains in the number of surviving firms, 

minority businesses faced greater hurdles in increasing 

gross receipts and employment (See Figures 4, 5 and 6).

Further analysis is needed to identify reasons why 

minority-owned firms have not reached parity in gross 

receipts, numbers of firms, and paid employees. More 

specifically, research is needed to understand why the rapid 

growth in numbers of MBEs has not been accompanied 

by corresponding increases in their gross receipts and/or 

employment. Factors that include size of minority-owned 

firms, limitations to accessing capital (especially in the 

early years of operations), industries in which minority 

firms operated, the role of technology in advancing growth 

in some industries and not others, and other competitive 

hurdles, such as education and training, as well as the 

national and international economic conditions that may 

disproportionately affect minority businesses, could be 

further explored in additional research. An assessment of 

this type would also have to weigh the importance of each 

factor and outline what measures would be the most likely 

to facilitate the path to parity. 

Figure 4: Parity Comparison for Number of Minority Firms (Employer and Non-Employer), 2002 and 

2007 (in millions)

Sources: Survey of Business Owners (SBO): Geographic Area Series: Economy-Wide Estimates of Business Ownership by Gender, Hispanic or 

Latino Origin, and Race, 2002; Statistics for All U.S. Firms by Industry, Gender, Ethnicity, and Race for the U.S., States, Metro Areas, Counties, and 

Places, 2007. Note: Data are for all firms, employer and non-employer.

0

2

4

6

8

10

Number in millions

4.0

5.8

8.3

6.5

Actual Parity

2002 2007

Actual Parity
The State of Minority Business Enterprises

20

Figure 6: Parity Comparison for Paid Employees for Employer Minority Firms (in millions), 2002 and 

2007 

Sources: Survey of Business Owners (SBO): Geographic Area Series: Economy-Wide Estimates of Business Ownership by Gender, Hispanic or 

Latino Origin, and Race, 2002; Statistics for All U.S. Firms by Industry, Gender, Ethnicity, and Race for the U.S., States, Metro Areas, Counties, and 

Places, 2007. Note: Data are for all firms, employer and non-employer.

Figure 5: Parity Comparison for Total Receipts of Minority Firms (Employer and Non-Employer), 2002 

and 2007 (in trillons)

Sources: Survey of Business Owners (SBO): Geographic Area Series: Economy-Wide Estimates of Business Ownership by Gender, Hispanic or 

Latino Origin, and Race, 2002; Statistics for All U.S. Firms by Industry, Gender, Ethnicity, and Race for the U.S., States, Metro Areas, Counties, and 

Places, 2007. Note: Data are for employer firms only.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Total number in trillions of dollars

0.7

1.0

3.4

2.5

Actual Parity

2002 2007

Actual Parity

0

5

10

15

20

Total number in millions

4.7

5.8

17.8

16.1

Actual Parity

2002 2007

Actual Parity
The State of Minority Business Enterprises

21

GEOGRAPHIC PICTURE

This next section examines data on the concentration of 

MBEs across the U.S., exploring states and regions (i.e., 

combined statistical areas or CSAs), that have the largest 

numbers of minority-owned firms.

Analysis by States

All 50 states and the District of Columbia have minority 

business enterprises. In 2007, the largest MBEs were in 

five states: California (1,220,580); Texas (723,057); Florida

(680,069); New York (537,544); and Georgia (263,356). 

These five states represented 59.5 percent of all MBEs in the 

U.S. (Table 4) and 50.9 percent of the nation’s total minority 

population in 2007. All five minority classifications had 

the highest concentrations in four of the five states where 

minority-owned businesses were most concentrated: 

California, Texas, Florida, and New York. New Jersey 

was also included in the top five states in which Asian 

and Hispanic firms were located. Oklahoma had a high 

concentration of Native American firms. Native Hawaiian 

and Other Pacific Islander firms included Hawaii in the top 

five states in which their firms were located. 

Compared to the states achieving parity for minorities 

overall, specific minority firms did not approach parity 

in any state, and the gap was large for all states, except for 

Florida. In Florida, the percent of minority firms was 34.9 

percent, and the share of the minority population was 39.2 

percent (Tables 5 and 6).
The State of Minority Business Enterprises

22

Table 4: Top Five States for Minority Firms (Employer and Non-Employer) by Minority Group, 2007

State Ranking State Number of Firms Percentage of Firms in

Minority Group

All Minority

1 California 1,220,581 21.2%

2 Texas 723,057 12.6%

3 Florida 680,069 11.8%

4 New York 537,544 9.3%

5 Georgia 263,356 4.6%

Total 3,424,607 59.5%

African American

1 New York 537,544 10.6%

2 Georgia 263,356 9.6%

3 Florida 680,069 9.4%

4 Texas 723,057 8.0%

5 California 1,220,581 7.2%

Total 3,424,607 44.8%

American Indian and Alaska Native

1 California 1,220,581 19.3%

2 Oklahoma 44,941 9.0%

3 Texas 723,057 8.0%

4 New York 537,544 5.5%

5 Florida 680,069 4.1%

Total 3,206,192 45.9%

Asian

1 California 1,220,581 32.8%

2 New York 537,544 12.7%

3 Texas 723,057 7.4%

4 New Jersey 182,489 4.4%

5 Florida 680,069 4.2%

Total 3,343,740 61.5%

Hispanic

1 California 1,220,581 25.1%

2 Florida 680,069 19.9%

3 Texas 723,057 19.8%

4 New York 537,544 8.5%

5 New Jersey 182,489 3.0%

Total 3,343,740 76.4%

Native Hawaiian and Other Pacific Islander

1 Hawaii 68,542 30.3%

2 California 1,220,581 24.3%

3 New York 537,544 4.9%

4 Florida 680,069 4.7%

5 Washington 71,465 3.2%

Total 2,578,201 67.4%

Source: Statistics for All U.S. Firms by Industry, Gender, Ethnicity, and Race for the U.S., States, Metro Areas, Counties, and Places, 2007. RSEs are 

in Appendix B.
The State of Minority Business Enterprises

23

Table 5: Share of Minority Firms (Employer and Non-Employer) and Minority Population by 

State, 2007

State Minority Firms Minority as a Percent of all 

Classifiable Firms in State

Minority

Population State Share

Alabama 70,538 19.0% 1,452,100 31.4%

Alaska 11,746 17.7% 231,765 33.9%

Arizona 85,227 18.0% 2,595,390 40.9%

Arkansas 23,637 10.3% 680,985 24.0%

California 1,220,581 36.7% 20,929,573 57.3%

Colorado 59,647 11.3% 1,393,151 28.7%

Connecticut 39,832 12.5% 897,960 25.6%

Delaware 11,349 16.3% 270,315 31.3%

District of Columbia 22,505 43.8% 396,829 67.5%

Florida 680,069 34.9% 7,152,463 39.2%

Georgia 263,356 30.1% 3,961,161 41.5%

Hawaii 68,542 59.4% 966,822 75.3%

Idaho 6,815 4.7% 216,025 14.4%

Illinois 223,007 20.6% 4,499,726 35.0%

Indiana 40,706 8.7% 1,044,751 16.5%

Iowa 8,129 3.3% 279,783 9.4%

Kansas 18,249 8.0% 535,943 19.3%

Kentucky 20,221 6.2% 509,254 12.0%

Louisiana 83,279 22.9% 1,619,485 37.7%

Maine 3,392 2.3% 59,817 4.5%

Maryland 164,130 32.2% 2,355,763 41.9%

Massachusetts 64,998 11.3% 1,307,532 20.3%

Michigan 108,932 13.8% 2,259,016 22.4%

Minnesota 31,074 6.5% 741,771 14.3%

Mississippi 46,791 21.3% 1,199,955 41.1%

Missouri 42,744 8.9% 1,039,240 17.7%

Montana 4,287 3.9% 112,835 11.8%

Nebraska 8,814 5.8% 274,191 15.5%

Nevada 45,533 21.6% 1,078,395 42.0%

New Hampshire 4,837 3.6% 87,393 6.6%

New Jersey 182,489 24.2% 3,285,966 37.8%

New Mexico 48,976 32.3% 1,135,982 57.7%

New York 537,544 28.4% 7,664,298 39.7%

North Carolina 131,728 17.0% 2,940,320 32.5%

North Dakota 1,773 3.0% 64,304 10.1%

Ohio 82,387 9.5% 1,983,616 17.3%

Oklahoma 44,941 13.9% 1,019,398 28.2%

Oregon 31,659 9.4% 731,833 19.5%

Pennsylvania 96,208 10.1% 2,264,554 18.2%

Rhode Island 9,823 10.6% 218,956 20.7%

South Carolina 57,557 16.5% 1,530,152 34.7%

South Dakota 2,882 3.9% 108,076 13.6%

Tennessee 68,218 12.8% 1,401,255 22.8%

Texas 723,057 34.2% 12,460,762 52.1%

Utah 16,042 6.8% 468,024 17.7%

Vermont 1,794 2.4% 29,281 4.7%

Virginia 138,256 22.4% 2,525,365 32.7%

Washington 71,465 13.5% 1,548,537 23.9%

West Virginia 4,433 3.8% 115,265 6.4%

Wisconsin 26,030 6.2% 817,994 14.6%

Wyoming 2,655 4.6% 66,263 12.7%

Total U.S. 5,759,209 28.0% 102,529,590 34.0%

Sources: Population Division, U.S. Census Bureau, Table 4: Estimates of the Population by Race and Hispanic Origin for the United States and 

States: July 1, 2007 (SC-EST2007-04); Census Survey of Business Owners Statistics for All U.S. Firms by Industry, Gender, Ethnicity, and Race for 

the U.S., States, Metro Areas, Counties, and Places, 2007. RSEs are in Appendix B.
The State of Minority Business Enterprises

24

Table 6: Minority Firms (Employer and Non-Employer) by State and Minority Group, 2007

State Total Minority African 

American

American Indian 

and Alaska 

Native

Asian Hispanic

Native Hawaiian 

and Other Pacific 

Islander

Alabama 70,538 56,712 3,068 6,908 4,439 254

Alaska 11,746 1,048 6,852 2,148 S 186

Arizona 85,227 10,039 9,106 16,333 52,667 S

Arkansas 23,637 13,239 2,653 3,322 5,436 92

California 1,220,581 137,891 45,569 508,969 566,573 9,174

Colorado 59,647 9,174 4,619 14,482 33,762 633

Connecticut 39,832 14,787 1,626 11,081 14,081 104

Delaware 11,349 6,507 S 2,989 1,533 36

District of Columbia 22,505 15,764 507 3,278 3,428 S

Florida 680,069 181,496 9,747 64,931 450,137 1,772

Georgia 263,356 183,864 5,975 46,222 32,574 1,145

Hawaii 68,542 1,067 1,548 56,872 4,374 11,403

Idaho 6,815 358 1,367 1,269 3,875 S

Illinois 223,007 106,626 5,391 59,367 56,567 569

Indiana 40,706 22,127 2,207 8,756 8,558 177

Iowa 8,129 2,190 604 2,834 2,455 178

Kansas 18,249 5,643 2,227 4,833 5,763 S

Kentucky 20,221 10,402 1,014 5,559 3,663 85

Louisiana 83,279 59,909 2,682 10,365 11,068 125

Maine 3,392 743 714 1,107 979 51

Maryland 164,130 102,173 3,301 35,881 25,774 294

Massachusetts 64,998 20,542 2,294 26,578 19,410 260

Michigan 108,932 72,554 6,079 21,589 10,770 487

Minnesota 31,074 12,454 2,890 11,371 5,002 S

Mississippi 46,791 40,615 727 4,002 1,828 72

Missouri 42,744 24,685 2,895 9,752 6,178 323

Montana 4,287 231 2,343 646 1,131 S

Nebraska 8,814 2,856 690 2,277 3,063 17

Nevada 45,533 8,658 1,775 17,542 18,035 582

New Hampshire 4,837 750 S 2,211 1,441 47

New Jersey 182,489 60,340 2,883 67,755 68,374 453

New Mexico 48,976 1,943 8,313 3,321 37,195 134

New York 537,544 204,004 13,071 196,825 193,183 1,852

North Carolina 131,728 83,919 8,024 20,157 21,301 451

North Dakota 1,773 163 988 412 287 25

Ohio 82,387 52,136 2,989 18,198 9,722 S

Oklahoma 44,941 10,449 21,212 6,736 7,663 150

Oregon 31,659 4,041 4,263 12,647 11,338 636

Pennsylvania 96,208 44,664 2,858 31,313 22,777 410

Rhode Island 9,823 3,217 395 1,999 5,765 34

South Carolina 57,557 43,812 1,648 6,658 5,971 213

South Dakota 2,882 207 1,729 452 595 8

Tennessee 68,218 45,726 2,708 11,178 8,700 415

Texas 723,057 154,283 18,997 114,297 447,589 1,196

Utah 16,042 1,144 1,462 4,646 9,238 691

Vermont 1,794 S 410 649 470 S

Virginia 138,256 63,363 3,353 44,576 28,579 405

Washington 71,465 S 6,526 37,373 17,795 1,197

West Virginia 4,433 S S 1,526 899 9

Wisconsin 26,030 11,276 2,641 6,785 5,619 S

Wyoming 2,655 124 469 398 1,728 9

Total U.S. 5,759,209 1,921,864 236,691 1,549,559 2,260,269 37,687

Source: Statistics for All U.S. Firms by Industry, Gender, Ethnicity, and Race for the U.S., States, Metro Areas, Counties, and Places, 2007. 

Note: “S” denotes suppressed data. RSEs are in Appendix B.
The State of Minority Business Enterprises

25

Growth in Number of Firms

As previously stated, minority-owned firms grew faster 

than all nonminority firms between 2002 and 2007 (45.5 

percent versus 10.9 percent respectively). In each of the 

50 states and the District of Columbia, the growth in the 

number of minority-owned firms exceeded the 10.9 percent 

national growth rate of nonminority firms. The growth 

rates were at least double or higher for all states, except in 

Wyoming where there was a growth rate of 11.3 percent 

(Table 7).

The number of minority-owned firms also grew fastest in 

five states: 91.3 percent in Georgia; 87.2 percent in Nevada; 

84.5 percent in Alabama; 66.1 percent in North Carolina; 

and 66 percent in Florida. The growth in minority 

population in these states was much slower than the growth 

in the numbers of minority businesses, and closer to the 12 

percent growth for the country. The growth in minority 

population was 22 percent in Georgia, 7.1 percent in 

Alabama, 15.5 percent in North Carolina, and 18.2 percent 

in Florida. The state of Nevada was much higher at 38.6 

percent. 

Growth in Gross Receipts

Between 2002 and 2007, gross receipts of minority-owned 

firms grew at a faster pace, 55 percent,25 than all U.S. firms, 

(33 percent) and faster than the growth of receipts for 

nonminority-owned firms at 22.2 percent. In fact, gross 

receipts for minority-owned firms grew faster than gross 

receipts for nonminority-owned firms in all states but two: 

Wyoming (14.4%) and Alaska (-45.1%).

States showing the fastest rates of growth in gross receipts 

were: Vermont, with 193.1 percent growth; Washington, 

with 142.5 percent; Utah with 101.5 percent; Nevada 

with 99.4 percent; and Missouri with 82.7 percent. Only 

Nevada ranked among the top five states with highest 

rates of growth in number of minority-owned firms 

and in gross receipts. Twenty-eight of the 50 states had 

percentage changes in gross receipts greater than in the 

number of firms, suggesting improved overall performance 

of minority firms in these states (See Table 7). Data on 

minority-owned businesses by state is also in Appendix C. 

25 Data on gross receipts were suppressed for seven states (Delaware, Kentucky, 

Maryland, Nebraska, New Hampshire, North Dakota, South Dakota, West 

Virginia), and the District of Columbia, for disclosure reasons. Conclusions 

about rankings of growth in gross receipts among states should take the missing 

data into account.
The State of Minority Business Enterprises

26

Table 7: Percentage Change in Employer and Non-Employer Minority Firms and Gross Receipts for all 

Firms and Population, 2002-2007

State Change in Number of 

Firms

Change in Gross 

Receipts

Change in Minority 

Population

Alabama 84.5% 50.3% 7.1%

Alaska 31.0% -45.1% 10.9%

Arizona 52.7% 83.1% 25.6%

Arkansas 56.4% 68.0% 13.7%

California 33.3% 45.2% 9.7%

Colorado 34.9% 34.7% 16.3%

Connecticut 46.7% 71.1% 12.0%

Delaware 58.5% S 20.0%

District of Columbia 33.8% S -3.8%

Florida 66.0% 74.4% 18.2%

Georgia 91.3% 66.7% 22.0%

Hawaii 28.1% 46.0% 1.5%

Idaho 30.1% 54.0% 28.5%

Illinois 45.5% S 7.9%

Indiana 50.0% 48.6% 16.5%

Iowa 48.1% 38.6% 20.9%

Kansas 33.7% 59.9% 11.5%

Kentucky 44.8% S 12.8%

Louisiana 45.1% 46.7% -4.5%

Maine 32.8% 37.3% 28.8%

Maryland 48.6% S 12.7%

Massachusetts 38.3% 35.0% 10.7%

Michigan 47.8% 31.1% 4.3%

Minnesota 43.0% 72.0% 18.9%

Mississippi 57.2% 28.1% 4.9%

Missouri 43.9% 82.7% 10.8%

Montana 21.6% 80.6% 15.6%

Nebraska 53.2% S 18.4%

Nevada 87.2% 99.4% 38.6%

New Hampshire 42.3% S 34.5%

New Jersey 34.1% 52.2% 9.6%

New Mexico 24.4% 46.0% 9.5%

New York 27.1% 57.2% 2.7%

North Carolina 66.1% 72.0% 15.5%

North Dakota 25.0% S 18.7%

Ohio 40.6% 37.5% 7.1%

Oklahoma 32.1% 71.0% 10.6%

Oregon 55.3% 42.0% 20.6%

Pennsylvania 62.9% 71.2% 12.9%

Rhode Island 49.6% 51.4% 13.2%

South Carolina 55.3% 56.2% 8.1%

South Dakota 39.4% S 15.1%

Tennessee 65.3% 63.8% 13.9%

Texas 47.3% 60.0% 17.0%

Utah 62.7% 101.5% 30.2%

Vermont 31.3% 193.1% 21.8%

Virginia 51.3% 65.4% 13.5%

Washington 45.0% 142.5% 17.8%

West Virginia 20.3% S 15.8%

Wisconsin 47.5% 77.5% 13.6%

Wyoming 11.3% 14.4% 17.0%

United States 45.5% 55.0% 12.0%

Sources: Population Division, U.S. Census Bureau, Table 4: Estimates of the Population by Race and Hispanic Origin for the United States and 

States: July 1, 2007 (SC-EST2007-04), Census Survey of Business Owners Statistics for All U.S. Firms by Industry, Gender, Ethnicity, and Race for 

the U.S., States, Metro Areas, Counties, and Places, 2007. Note: “S” indicates data was suppressed by U.S. Census. RSEs are in Appendix B.
The State of Minority Business Enterprises

27

Combined Statistical Areas26

Combined statistical areas (CSAs) provide another picture 

of concentration of minority-owned firms.27 Five CSAs had 

the largest number of minority-owned firms: Los AngelesLong Beach-Riverside, CA CSA; New York-NewarkBridgeport, NY-NJ-CT-PA CSA; Miami-Fort LauderdalePompano Beach, FL Metro Area; Washington-BaltimoreNorthern Virginia, DC-MD-VA-WV CSA; and San JoseSan Francisco-Oakland, CA CSA. Together, these regions 

had 2,344,399 minority-owned businesses, representing 

40.7 percent of all minority firms in the United States 

(Table 8).

The data also suggest that:

• Hispanic firms were concentrated in the Miami-Fort

Lauderdale-Pompano Beach, FL Metro area (28.3

percent), the Los Angeles-Long Beach-Riverside, CA

CSA (15.9 percent), and New York-Newark-Bridgeport,

NY-NJ-CT-PA CSA (11.4 percent).

• Asian firms were concentrated in the Los Angeles-Long

Beach-Riverside, CA CSA (18.2 percent), the New

York-Newark-Bridgeport, NY-NJ-CT-PA CSA (16.3

percent), and the San Jose-San Francisco-Oakland, CA

CSA (9.2 percent).

• African American firms were concentrated in the New

York-Newark-Bridgeport, NY-NJ-CT-PA CSA (13

percent), Washington-Baltimore-Northern Virginia,

DC-MD-VA-WV CSA (7.1 percent), and AtlantaSandy Springs-Gainesville, GA-AL CSA (6.8 percent).

• The largest number of American Indian and Alaska

Native firms was in the Los Angeles-Long BeachRiverside, CA CSA (10.4 percent), the New YorkNewark-Bridgeport, NY-NJ-CT-PA CSA (6.2 percent),

and the San Jose-San Francisco-Oakland, CA CSA (3.1

percent).

• Native Hawaiian and Other Pacific Islander firms

were concentrated in the Honolulu, HI Metro Area

CSA (17.8 percent), the Los Angeles-Long BeachRiverside, CA CSA (12.4 percent), and the San Jose-San

Francisco-Oakland, CA CSA (6.4 percent).

According to the data in Table 8, Asian and Hispanic firms 

were heavily represented in their respective top five CSAs. 

For Hispanic firms, the Dallas-Fort Worth, Texas CSA 

replaced San Jose-San Francisco-Oakland, CA CSA among 

the top five CSAs for firms operating in 2007 compared to 

those operating in 2002.

26 Combined Statistical Areas are combinations of adjacent Metropolitan and/or 

Micropolitan Statistical Areas that retain their own designations as Metropolitan 

or Micropolitan Statistical Areas within the larger area. For a more complete 

description of CSAs and MSAs, see http://www.census.gov/geo/reference/gtc/

gtc_cbsa.html.

27 Miami-Fort Lauderdale-Pompano Beach, FL and Honolulu, HI are 

Metropolitan Statistical Areas (MSA), not CSAs. Due to the number of firms in 

these MSAs, we can assume that they would have been ranked at, or near, the top 

of the CSAs, based on combining.
The State of Minority Business Enterprises

28

Table 8: Top Five Combined Statistical Areas (CSA) for Minority Firm (Employer and Non-Employer) 

Concentration, 2007

CSA 

Ranking CSA Number of Firms

Percentage of 

Firms in Minority 

Group

All Minority

1 Los Angeles-Long Beach-Riverside, CA CSA 727,374 12.6%

2 New York-Newark-Bridgeport, NY-NJ-CT-PA CSA 690,970 12.0%

3 Miami-Fort Lauderdale-Pompano Beach, FL Metro Area 428,457 7.4%

4 Washington-Baltimore-Northern Virginia, DC-MD-VA-WV CSA 257,137 4.5%

5 San Jose-San Francisco-Oakland, CA CSA 240,461 4.2%

Total 2,344,399 40.7%

African American

1 New York-Newark-Bridgeport, NY-NJ-CT-PA CSA 249,796 13.0%

2 Washington-Baltimore-Northern Virginia, DC-MD-VA-WV CSA 135,684 7.1%

3 Atlanta-Sandy Springs-Gainesville, GA-AL CSA 130,940 6.8%

4 Chicago-Naperville-Michigan City, IL-IN-WI CSA 102,722 5.3%

5 Miami-Fort Lauderdale-Pompano Beach, FL Metro Area 99,595 5.2%

Total 718,737 37.4%

American Indian and Alaska Native

1 Los Angeles-Long Beach-Riverside, CA CSA 24,500 10.4%

2 New York-Newark-Bridgeport, NY-NJ-CT-PA CSA 14,626 6.2%

3 San Jose-San Francisco-Oakland, CA CSA 7,348 3.1%

4 Tulsa-Bartlesville, OK CSA 6,364 2.7%

5 Oklahoma City-Shawnee, OK CSA 5,375 2.3%

Total 58,213 24.6%

Asian

1 Los Angeles-Long Beach-Riverside, CA CSA 282,467 18.2%

2 New York-Newark-Bridgeport, NY-NJ-CT-PA CSA 252,394 16.3%

3 San Jose-San Francisco-Oakland, CA CSA 142,838 9.2%

4 Washington-Baltimore-Northern Virginia, DC-MD-VA-WV CSA 70,273 4.5%

5 Chicago-Naperville-Michigan City, IL-IN-WI CSA 54,940 3.5%

Total 802,912 51.8%

Hispanic

1 Miami-Fort Lauderdale-Pompano Beach, FL Metro Area 320,083 28.3%

2 Los Angeles-Long Beach-Riverside, CA CSA 359,773 15.9%

3 New York-Newark-Bridgeport, NY-NJ-CT-PA CSA 258,430 11.4%

4 Houston-Baytown-Huntsville, TX CSA 105,064 4.6%

5 Dallas-Fort Worth, TX CSA 71,055 3.1%

Total 1,114,405 63.5%

Native Hawaiian and Other Pacific Islander

1 Honolulu, HI Metro Area 6,721 17.8%

2 Los Angeles-Long Beach-Riverside, CA CSA 4,672 12.4%

3 San Jose-San Francisco-Oakland, CA CSA 2,311 6.1%

4 New York-Newark-Bridgeport, NY-NJ-CT-PA CSA 2,068 5.5%

5 Seattle-Tacoma-Olympia, WA CSA 998 2.6%

Total 16,770 44.5%

Source: Statistics for All U.S. Firms by Industry, Gender, Ethnicity, and Race for the U.S., States, Metro Areas, Counties, and Places, 2007.
The State of Minority Business Enterprises

29

INDUSTRY PICTURE

The 2007 SBO data also showed that minority-owned firms 

are represented in all 19 industry sectors designated by 

the North American Classification System (NACS) (Table 

9). The industry sectors in which minority-owned firms 

were most concentrated, however, differed from those of 

nonminority firms. 

In 2007, minority-owned firms were most heavily 

concentrated in the category of “other services”28 that 

combines a series of industries not necessarily related 

to one another: health care and social assistance. Most 

minority-owned firms were distributed in the following 

industry sectors: other services (16.9 percent); health care 

and social assistance (13.1 percent); administrative and 

support and waste management and remediation services 

(10.5 percent); professional, scientific, and technical 

services (10 percent); and construction (9.6 percent). 

The rankings of concentration in nonminority firms 

differed from those of minorities. Nonminority firms 

were most heavily concentrated in: professional, scientific, 

and technical services (14.1 percent); construction (12.8 

percent); other services (11.7 percent); retail trade (10 

percent); and real estate and rental and leasing (9.3 percent) 

(See Figure 8).

Among minority groups, five industry sectors were most 

represented, but the rankings differed among minority subgroups (See Table 9). 

• African American firms had the highest concentration

in health care and social assistance (19 percent);

followed by other services (18.7 percent);

administrative and support and waste management and

remediation services (11.3 percent); transportation and

warehousing (8.8 percent); and professional, scientific,

and technical services (8.5 percent). Transportation

and warehousing ranked fourth in 2007, replacing the

2002 fourth ranked industry, retail trade.

• For American Indian and Alaska Native firms, most

firms were in construction (15.9 percent); followed by

other services (14.6 percent); health care and social

assistance (10.6 percent); professional, scientific, and

technical services (10.1 percent); administrative and

support; waste management and remediation services

(9.6 percent). In 2007, administrative and support

and waste management and remediation services (10.5

percent) replaced retail trade which ranked fifth in

2002.

• Asian firms were concentrated in other services

(18.6 percent); professional, scientific, and technical

services (13.8 percent); retail trade (12.3 percent);

health care and social assistance (10.6 percent); and

accommodation and food services (8.6 percent). The

2007 rankings remained the same as those in 2002.

• Hispanic firms had their highest concentrations

in construction (15.1 percent) and other services

(14.9 percent). These industries were followed by

administrative and support and waste management and

remediation services (13.9 percent); health care and

social assistance (10.4 percent); and transportation and

warehousing (8.9 percent). Fifth ranked transportation

and warehousing replaced retail trade which was fifth

in 2002.

• For Native Hawaiian and Other Pacific Islander firms,

the concentration of firms was highest in other services

(14 percent) and construction (13.2 percent). These

industry sectors were followed by: retail trade (10.3

percent); health care and social assistance (9.9 percent);

and professional, scientific, and technical services (9.6

percent). Compared to 2002, administrative support

real estate, and rental and leasing dropped out of the

top five, and were replaced in 2007 by other services

and health care and social assistance.

Figures 7 and 8 illustrate the breakdown and distribution of 

MBEs by industry sector.

28 The category “other services” includes establishments not provided for 

elsewhere in the classification system that are engaged in activities such as 

equipment and machinery repairing, promoting religious activities, grant-making, 

advocacy, providing dry-cleaning and laundry services, personal care services, 

and dating services. It does not include public administration.
The State of Minority Business Enterprises

30

Table 9: Top Five Industry Sectors for Minority Firm (Employer and Non-Employer) Concentration, 

2007

Industry 

Sector 

Ranking

Industry Sector Number of 

Firms

Percentage 

of Firms in 

Minority 

Group

All Minority

1 Other services (except public administration)# 972,980 16.9%

2 Health care and social assistance 754,919 13.1%

3 Administrative and support and waste management and remediation services 606,667 10.5%

4 Professional, scientific, and technical services 575,857 10.0%

5 Construction 551,209 9.6%

Total 3,461,632 60.1%

African American

1 Health care and social assistance 365,140 19.0%

2 Other services (except public administration)# 358,443 18.7%

3 Administrative and support and waste management and remediation services 216,763 11.3%

4 Transportation and warehousing 168,386 8.8%

5 Professional, scientific, and technical services 163,761 8.5%

Total 1,272,493 66.2%

American Indian and Alaska Native

1 Construction 37,693 15.9%

2 Other services (except public administration)# 34,545 14.6%

3 Health care and social assistance 25,112 10.6%

4 Professional, scientific, and technical services 23,886 10.1%

5 Administrative and support and waste management and remediation services 22,714 9.6%

Total 143,950 60.8%

Asian

1 Other services (except public administration)# 287,831 18.6%

2 Professional, scientific, and technical services 213,705 13.8%

3 Retail trade 190,830 12.3%

4 Health care and social assistance 164,224 10.6%

5 Accommodation and food services 133,729 8.6%

Total 990,319 63.9%

Hispanic

1 Construction 340,770 15.1%

2 Other services (except public administration)# 337,637 14.9%

3 Administrative and support and waste management and remediation services 313,313 13.9%

4 Health care and social assistance 234,824 10.4%

5 Transportation and warehousing 200,567 8.9%

Total 1,427,111 63.1%

Native Hawaiian and Other Pacific Islander

1 Other services (except public administration)# 5,264 14.0%

2 Construction 4,991 13.2%

3 Retail trade 3,880 10.3%

4 Health care and social assistance 3,723 9.9%

5 Professional, scientific, and technical services 3,619 9.6%

Total 21,477 57.0%

Source: Statistics for All U.S. Firms by Industry, Gender, Ethnicity, and Race for the U.S., States, Metro Areas, Counties, and Places, 2007. 

Note: # “Other Services” includes establishments not provided for elsewhere in the classification system that are engaged in activities such 

as equipment and machinery repairing, promoting religious activities, grant-making, advocacy, providing dry-cleaning and laundry services, 

personal care services, and dating services. It does not include public administration.
The State of Minority Business Enterprises

31

Figure 7: Distribution for Minority-Owned Firms (Employer and Non-Employer) by Industry, 2007

Sources: U.S. Census Bureau Survey of Business Owners (SBO): Geographic Area Series: Economy-Wide Estimates of Business Ownership by 

Gender, Hispanic or Latino Origin, and Race, 2002; Statistics for All U.S. Firms by Industry, Gender, Ethnicity, and Race for the U.S., States, Metro 

Areas, Counties, and Places, 2007. RSEs are in Appendix B.

0 10 20

Percentage

Management of companies and enterprises 

Utilities

Mining, quarrying, and oil and gas extraction

Agriculture, forestry, fishing and hunting

Information

Manufacturing

Educational Services

Wholesale Trade

Finance and insurance

Arts, entertainment, and recreation

Accommodation and food services

Real estate and rental and leasing

Transportation and warehousing

Retail trade

Construction

Professional, scientific, and technical services

Administrative and support and waste management

 and remediation services

Health care and social assistance

Other services (except public administration) 

0.0%

0.1%

0.1%

0.4%

1.1%

1.4%

1.9%

2.2%

2.4%

3.4%

4.2%

6.0%

7.5%

9.1%

9.6%

10.0%

10.5%

16.9%

13.1.%

2 8 4 6 1412 1816
The State of Minority Business Enterprises

32

Figure 8: Distribution of Nonminority Firms (Employer and Non-Employer) by Industry, 2007

Sources: U.S. Census Bureau Survey of Business Owners (SBO): Geographic Area Series: Economy-Wide Estimates of Business Ownership by 

Gender, Hispanic or Latino Origin, and Race, 2002; Statistics for All U.S. Firms by Industry, Gender, Ethnicity, and Race for the U.S., States, Metro 

Areas, Counties, and Places, 2007. RSEs are in Appendix B.

0 3 6 9 12 15

Percentage

Management of companies and enterprises 

Utilities

Mining, quarrying, and oil and gas extraction

Agriculture, forestry, fishing and hunting

Information

Manufacturing

Educational Services

Wholesale Trade

Finance and insurance

Arts, entertainment, and recreation

Accommodation and food services

Real estate and rental and leasing

Transportation and warehousing

Retail trade

Construction

Professional, scientific, and technical services

Administrative and support and waste management

 and remediation services

Health care and social assistance

Other services (except public administration) 

0.1%

0.1%

0.4%

1.0%

1.4%

2.2%

2.2%

2.6%

2.8%

3.7%

4.6%

4.7%

8.0%

8.6%

9.3%

10.0%

11.7%

14.1%

12.8%
The State of Minority Business Enterprises

33

Besides the top five industry sectors in which most minority-owned firms are concentrated, several other industry 

sectors ranked among the top five for some minority groups as discussed above. African American and Hispanic firms 

were heavily engaged in transportation and warehousing, while retail trade was ranked high for Asian firms and Native 

Hawaiian and Other Pacific Islander firms. Asian-owned firms also leaned more towards accommodation and food 

services industries (8.6 percent). Tables 10 and 11 illustrate how minority-owned firms fared by industry sector in the 

number and distribution.

Table 10: Number of Firms (Employer and Non-Employer) by Industry Sector, 2007

Industry Nonminority Minority African

American

American 

Indian 

and 

Alaska 

Native

Asian Hispanic

Native 

Hawaiian 

and 

Other 

Pacific 

Islander

Total for all sectors 20,535,651 5,759,209 1,921,864 236,691 1,549,559 2,260,269 37,687

Agriculture, forestry, fishing and 

hunting 230,324 24,420 4,347 5,026 5,125 10,201 S

Mining, quarrying, and oil and gas 

extraction 112,197 4,757 S 814 913 2,328 **31

Utilities 15,613 3,684 1,316 248 474 1,866 6

Construction 2,801,960 551,209 125,818 37,693 70,722 340,770 4,991

Manufacturing 501,340 81,949 16,041 4,985 26,375 36,619 623

Wholesale trade 564,280 126,845 19,384 4,810 60,458 43,971 631

Retail trade 2,092,957 525,859 148,181 19,776 190,830 186,417 3,880

Transportation and warehousing 800,148 432,204 168,386 12,916 74,117 200,567 2,274

Information 300,182 63,789 23,442 3,002 17,428 21,435 414

Finance and insurance 824,119 137,969 42,100 4,573 42,099 51,715 1,030

Real estate and rental and leasing 2,101,589 345,806 92,655 12,410 116,035 130,365 2,528

Professional, scientific, and 

technical services 3,139,979 575,857 163,761 23,886 213,705 185,420 3,619

Management of companies and 

enterprises 14,079 963 196 31 441 282 **13

Administrative and support 

and waste management and 

remediation services

1,484,238 606,667 216,763 22,714 75,485 313,313 3,542

Educational services 456,910 111,860 47,727 5,193 29,515 33,144 614

Health care and social assistance 1,505,794 754,919 365,140 25,112 164,224 234,824 3,723

Arts, entertainment, and 

recreation 1,000,423 196,639 86,357 13,506 40,220 63,918 2,625

Accommodation and food services 499,375 241,031 40,959 5,385 133,729 65,602 1,316

Other services (except public 

administration) 2,113,414 972,980 358,443 34,545 287,831 337,637 5,264

Industries not classified 8,273 1,534 487 132 613 425 S

Source: Statistics for All U.S. Firms by Industry, Gender, Ethnicity, and Race for the U.S., States, Metro Areas, Counties, and Places, 2007. Note: “S” 

indicates data was suppressed by Census. The ** indicates that the values are not significantly different from zero at the 90 percent confidence 

interval. RSEs are in Appendix B.
The State of Minority Business Enterprises

34

Average Gross Receipts

Minority-owned firms generated the largest average gross 

receipts in the following six industries: management 

of companies and enterprises; manufacturing; mining, 

quarrying, and oil and gas extraction; retail trade; 

wholesale trade; and accommodations and food services. 

With the exception of wholesale trade for which data was 

not available, 29 nonminority-owned firms had the highest 

average receipts in the same industries as minority-owned 

firms. As previously stated, the average gross receipts for 

all minority-owned firms was $177,941 per firm, compared 

to $483,289 for nonminority firms, making the average 

gross receipts for nonminority firms 2.7 times greater than 

that of minority-owned firms. Average gross receipts for 

minority-owned firms by industry sector were also lower 

compared to those of nonminority firms with the exception 

of the management and enterprises industry sectors. For 

firms operating in 2007, minority-owned firms had greater 

average gross receipts in the management of companies and 

enterprises sector ($2.3 million) compared to nonminorityowned firms ($1.8 million). The difference between the two 

groups of firms in this industry widened from that in 2002, 

when the average gross receipts for nonminority firms was 

$1.1 million and, for minority firms, $1.3 million.30

Minority-owned firms in the management of companies 

and enterprises industry sector also had the largest average 

gross receipts compared to any other industry sector, 

followed by manufacturing with average gross receipts of 

$801,000. Among nonminority firms, the industry sector 

with the highest average sales was manufacturing with 

$2.4 million - three times that of minority firms. Average 

gross receipts for both minority-owned and nonminority 

firms were much smaller for mining, quarrying and oil 

and gas extraction; retail trade; and accommodations and 

food services; however, the difference between the two 

groups was significantly large with minority-owned firms 

generating fewer gross receipts on average (Figure 9).

29 The nonminority values of wholesale trade average gross receipts and number 

of firms were not disclosed by Census for 2007. Nonminority average gross 

receipts for wholesale trade may also be among the larger industries. Gross 

receipts in wholesale trade for minority-owned firms were $1.7 million.

30 U.S. Department of Commerce, Minority Business Development Agency, 

The State of Minority Business Enterprises: An Overview of the 2002 Survey of 

Business Owners. Washington, D.C., August 2006.
The State of Minority Business Enterprises

35

Figure 9: Industries with the Highest Average Gross Receipts for Minority Firms and Nonminority 

Firms (Employer and Non-Employer), 2007

Sources: U.S. Census Bureau Survey of Business Owners (SBO): Geographic Area Series: Economy-Wide Estimates of Business Ownership 

by Gender, Hispanic or Latino Origin, and Race, 2002; Statistics for All U.S. Firms by Industry, Gender, Ethnicity, and Race for the U.S., States, 

Metro Areas, Counties, and Places, 2007. Note: Wholesale receipts per minority firm were $1,700 thousand in 2007 but were not available for 

nonminority firms.

0

$500

$1000

$1500

$2000

$2500

Nonminority Firms All Minority Firms

Millions of Dollars

Management

of companies

and

enterprises

$1,729

$2,266

$2,415

$801

$719

$426

$841

$364 $325

$616

Manufacturing Mining, quarrying, 

and oil and gas

extraction

Retail trade Accommodation

and food

services
The State of Minority Business Enterprises

36

MBDA Strategic Growth Initiative (SGI) 

Firms and Non-SGI Firms

This last section of the report assesses the importance of 

firm size and analyzes their growth by the number of firms, 

gross receipts, average gross receipts and number of paid 

employees. Both employer and non-employer firms are 

included in the analysis. 

Minority businesses were divided into two groups: those 

that generated $500,000 or more in annual gross receipts, 

and those that generated less than $500,000 in annual gross 

receipts. Under the MBDA Strategic Growth Initiative 

(SGI), minority-owned companies with sales of $500,000 

or more are considered to have high potential for growth 

in the future.31 These firms are more likely to be employer 

firms (firms with employees), and may be in the technology 

sector or other high growth industries such as advanced 

manufacturing, renewable energy, and health care among 

other industry sectors. 

Non-SGI firms are defined as minority-owned companies, 

with annual gross receipts less than $500,000. These firms 

are generally small, with few or no employees, other than 

the entrepreneur who started the firm. An example of a 

non-SGI firm would be a lifestyle company started by a sole 

proprietor. 

In 2007, there were 276,441 SGI firms compared to 194,552 

in 2002. These firms generated $793.7 billion in gross 

receipts ($498.5 billion in 2002), and employed 4.4 million 

workers (3.4 million in 2002). SGI firms accounted for 

12.5 percent of all classifiable firms, grossing $500,000 or 

more, and employed 9.1 percent of all workers paid by 

those larger classifiable firms. Non-SGI firms accounted for 

5.5 million firms, grossed about $231.1 billion in receipts, 

and employed 1.4 million workers. Figure 10 offers a 

comparison of SGI and non-SGI firms.

Growth in Number of Firms

SGI firms grew considerably faster than nonminority 

firms in the same size category. The number of SGI firms 

increased 42.1 percent between 2002 and 2007, while 

nonminority firms with receipts of $500,000 or greater 

grew 9.8 percent (Figure 11).

The number of non-SGI firms also grew at a faster rate of 

40.2 percent, than did nonminority firms with sales less 

than $500,000, which increased 12 percent, during this 

period. As Figure 10 reveals, non-SGI firms represented 

95.2 percent of all minority firms in 2007. 

31 Based, in part, on the SBO 2002 data, MBDA launched the Strategic Growth 

Initiative (SGI) which focuses on minority-owned firms with gross receipts 

greater than $500,000. These firms are considered to have a larger impact on the 

economy for which special focus is needed. The data revealed that minority firms 

with annual receipts of $500,000 or more generated a much larger percentage 

of all minority revenues and paid employees compared to minority firms with 

annual gross receipts under $500,000.
The State of Minority Business Enterprises

37

Figure 10: SGI and Non-SGI Firms as a Percentage of All Minority Firms, 2007

Source: Statistics for All U.S. Firms by Number of Owners by Receipts Size of Firm, Gender, Ethnicity, Race, and Veteran Status for the U.S., 2007. 

Note: Data for number of firms and gross receipts are for both employer and non-employer firms; data for employment is for employee firms.

0

20

40

60

80

100

SGI Firms Non-SGI Firms

Percentage of all Minority Firms

Number of Firms

4.8%

95.2%

77.4%

22.6%

24.9

75.1%

Gross Receipts Paid Employees
The State of Minority Business Enterprises

38

Figure 11: Change in the Number of Firms, Gross Receipts and Paid Employment for All Minority and 

All Nonminority Firms, 2002-2007

Nonminority Firms excluding 

publicly held Minority Firms

All Firms

Receipts 

Greater 

than 

$500,000

Receipts 

Less than 

$500,000

All Firms SGI Firms Non-SGI 

Firms

Number of Firms 10.9% 12.0% 9.8% 45.5% 42.1% 40.2%

Gross Receipts 22.2% n/a n/a 55.0% 59.2% 36.0%

Average Gross Receipts 

per Firm 10.2% n/a n/a 6.5% 12.1% -3.0%

Employees 0.2% -7.7% 1.8% 24.4% 26.8% 13.1%

Source: Survey of Business Owners (SBO): Company Statistics Series: Statistics for All U.S. Firms by Kind of Business, Receipts Size 

of Firm, Hispanic or Latino Origin, and Race, 2002. Note: Data for number of firms and gross receipts are for both employer and 

non-employer firms; data for employment is for employee firms. N/A indicates that data was not available.

-10

0

10

20

30

40

50

60

Percenttage of Change

All Firms Receipts

greater 

than

$500,000

Nonminority Firms 

excluding publicly held

Minority Firms

Receipts 

less than

$500,00

All Firms SGI Firms Non-SGI 

firms

Average gross receipts per firm

Employees

Number of Firms

Gross Receipts

Data not available
The State of Minority Business Enterprises

39

Growth in Gross Receipts

As discussed previously, gross receipts of all minority firms 

increased 55 percent between 2002 and 2007, more than 

double the 22.2 percent of all nonminority-owned firms. 

Growth in gross receipts of SGI firms was also faster at 59.2 

percent compared to non-SGI firms at 36.0 percent. Data 

for nonminority firms by size of receipts were unavailable 

for comparison.32 (Figure 11)

Average Gross Receipts

In 2007, the average gross receipts of SGI businesses 

were smaller than that of nonminority firms with sales of 

$500,000 or more. SGI firms had $2.9 million in average 

sales, while nonminority firms of the same size had average 

sales of $4.6 million. SGI average gross receipts represented 

63 percent of nonminority firms with $500,000 or more in 

gross receipts. Average gross sales of non-SGI firms were 

$42,000 in 2007, compared to $58,000 for nonminority 

firms with less than $500,000 in sales, or 72 percent of 

nonminority average gross sales.

Growth in Paid Employees

Minority-owned firms continued to demonstrate a robust 

growth of employment compared to their nonminority 

counterparts regardless of firm size. Between 2002 and 

2007, SGI firms out performed nonminority firms of the 

same size in growth of paid employees. During the same 

period, non-SGI firms increased their number of workers 

by 13.1 percent between 2002 and 2007. Nonminority 

firms with sales less than $500,000 added only 1.8 percent 

to their employment.

32 2002 Survey of Business Owners data for publicly held firms operating in 

2002 in various size categories was suppressed by the U.S. Census Bureau to 

meet publication standards and, therefore not available for which the number of 

smaller nonminority firms cannot be derived. 
The State of Minority Business Enterprises

40

The number of minority-owned enterprises grew at a much 

faster pace than their gross receipts, average gross sales, or 

paid employment between 2002 and 2007. The data also 

demonstrate that minority-owned firms outperformed the 

growth of nonminority-owned firms in all four measures 

during the same period. 

Gross receipts and average sales of minority-owned 

firms remained lower than those of nonminority firms. 

While minority-owned businesses narrowed the gap in 

entrepreneurial parity in terms of numbers between 2002 

and 2007, the gap widened slightly for paid employment 

and gross receipts. MBEs have yet to close the parity 

gap in terms of number of firms, gross receipts and paid 

employment when compared to their share of the adult 

population in the U.S., which was 31.5 percent in 2007. 

Minority-owned employer firms continued to be an engine 

of job opportunities between 2002 and 2007, despite a lack 

of parity. As the data indicates, minority-owned firms 

contributed to the U.S. economy with positive growth in 

employment regardless of firm size, while nonminorityowned firms experienced a decline in employment among 

their larger firms, along with a very modest increase in 

employees among their smaller firms. The increase in 

employment for minority firms was 24.4 percent, compared 

to just 0.2 percent for nonminority firms between 2002 and 

2007. Among larger firms, employment at SGI minority 

firms grew by 26.8 percent compared to a decline of 7.7 

percent for nonminority firms of the same size during the 

same period. 

The data in this report indicate that advancing the 

economic and financial performance of minority-owned 

businesses remains an important national priority. The state 

of minority businesses in 2007, especially their upward 

growth, demonstrates the critical importance of expanding 

opportunities for these firms. Government agencies, 

educational institutions and the private sector must 

collaborate on solutions that effectively enable MBEs to be 

successful, while addressing barriers that include disparities 

in access to capital and particular characteristics, such as 

household net income, educational attainment and social 

networks, confronting these business owners.

The Minority Business Development Agency (MBDA) 

has expanded existing programs and developed new ones 

in support of the growth and global competitiveness of 

minority-owned businesses. These programs address the 

specific needs of MBEs, and take into account the changing 

environment in which minority businesses operate. MBDA 

continues to strengthen and develop new partnerships 

with government agencies, corporations, non-profit 

organizations and educational institutions to support 

minority business growth. 

The data in this report substantiates MBDA’s core strategy 

to build MBEs of size and scale, increasing average gross 

receipts, thereby enabling these firms to hire workers and, 

in turn, build more sustainable communities, cities and 

states. Moving forward, research that builds upon the state 

of minority businesses could explore more opportunities 

to help these firms enhance capacities, increase access to 

capital, and strive towards greater economic parity.

CONCLUSIONS
The State of Minority Business Enterprises

41

APPENDIX A: Research Methodology

Definitions 

The data in this report analyzed business measures for all 

firms (employer firms and non-employer firms) from the 

U.S. Census Bureau’s 2007 Survey of Business Owners (2007 

SBO) and the 2002 Survey of Business Owners (2002 SBO).

This report also uses estimates from the U.S. Census Bureau’s 

Population Estimates Program (July 2013) to determine total 

population and minority population by state.

Minority-Owned Firms

For this report, the definition of “minority-owned firm” was 

extracted from the 2002 and 2007 SBO. The U.S. Census 

Bureau tabulates the data to show totals for all minority 

firms, as well as values for each racial/ethnic group. These 

totals, however, do not equal the sum of the values for each 

racial/ethnic group because survey reporters can select 

more than one racial/ethnic category. In 2007, in particular 

and in accordance with the Office of Management and 

Budget (OMB) guidelines, each business owner/survey 

respondent had the option of selecting more than one race; 

therefore, businesses could be tabulated in more than one 

racial group. Thus, owners that reported more than one 

race may be counted more than once in this report. 

Nonminority-Owned Firms

In this report, nonminority firms are defined as all firms 

minus those that are publicly held, not-for-profit, or 

foreign-owned firms. The variable for nonminority firms 

also does not include minority firms. Our definition differs 

from the U.S. Census Bureau’s definition of nonminority 

firms. In their case, the nonminority definition excludes 

firms which are owned equally by minority and 

nonminority owners. The definition used in this report, 

however, includes firms owned equally by minority and 

nonminority owners in the nonminority totals, and is 

consistent with definitions used in the prior MBDA report, 

The State of Minority Business Enterprises, An Overview 

of the 2002 Survey of Business Owners. However, the U.S. 

Census did not publish data on nonminority firms in their 

2002 SBO.

Minority Population 

Minority population is calculated from the U.S. Census 

Bureau Population estimates as total population less nonHispanic white alone (i.e. single race) population. The 

racial classification used in this report adheres to Office 

of Management and Budget (OMB), Statistical Directive 

No.15: “Race and Ethnic Standards for Federal Agencies and 

Administrative Reporting,” Federal Register 43:19269-19270, 

May 4, 1978. New standards were adopted by OMB in 

October 1997 and were implemented by all federal agencies 

on January 1, 2003. The categories are American Indian and 

Alaska Native, Asian, Black or African American, Native 

Hawaiian or Other Pacific Islander, and White. There are 

also two categories for data on ethnicity: “Hispanic or 

Latino” and “Not Hispanic or Latino.” MBDA adheres to 

the U.S. Census definition of nonminority, single race NonHispanic White. 

Reliability of Estimates33

The values in this report are, in part, estimated from a 

sample, and will differ from the figures that would have 

been obtained from a complete census. Two types of 

possible errors are associated with estimates based on data 

from sample surveys: sampling errors and non-sampling 

errors. The accuracy of a survey result depends not only on 

the sampling errors and non-sampling errors measured, but 

also on the non-sampling errors not explicitly measured. 

For particular estimates, the total error may exceed the 

measured error. The following is a description of the 

sampling and non-sampling errors associated with this 

tabulation.

Sampling variability. The particular sample used for 

this survey is one of a large number of all possible samples 

of the same size that could have been selected using the 

same sample design. Estimates derived from the different 

samples would differ from each other. The relative standard 

error (RSE) and standard error are measures of the 

33 From Methodology - 2007 Survey of Business Owners, available at 

http://www.census.gov/econ/sbo/methodology.html.
The State of Minority Business Enterprises

42

variability among the estimates from all possible samples. 

The estimated relative standard errors and estimated 

standard errors presented in the tables reflect the sampling 

variability, and thus measure the precision with which an 

estimate from the particular sample selected for this survey 

approximates the average result of all possible samples. 

Relative standard errors and standard errors are applicable 

only to those published cells in which sample cases are 

tabulated. A relative standard error is an expression of the 

standard error as a percent of the quantity being estimated.

The sample estimate and an estimate of its relative 

standard error can be used to estimate the standard error 

and then construct interval estimates with a prescribed 

level of confidence that the interval includes the average 

results of all samples. To illustrate, if all possible samples 

were surveyed under essentially the same condition, and 

estimates calculated from each sample, then:

1. Approximately 68 percent of the intervals from one

standard error below the estimate to one standard

error above the estimate would include the average

value of all possible samples.

2. Approximately 90 percent of the intervals from 1.6

standard errors below the estimate to 1.6 standard

errors above the estimate would include the

average value of all possible samples.

Thus, for a particular sample, one can say with specified 

confidence that the average of all possible samples is 

included in the constructed interval.

Example of a confidence interval. Suppose the estimate 

is 51,707 and the estimated relative standard error is 2 

percent. The standard error is then 2 percent of 51,707 or 

1,034. An approximate 90 percent confidence interval is 

found by first multiplying the standard error by 1.6 and 

then adding and subtracting that result from the estimate 

to obtain the upper and lower bounds. Since 1.6 x 1,034 = 

1,654, the confidence interval in this example is 51,707 + or 

- 1,654 or the range 50,053 to 53,361.

For the Characteristics of Businesses and Characteristics 

of Business Owners datasets, some data are expressed 

as percentages with standard errors rather than relative 

standard errors as indicated above. Construction of the 

confidence interval is illustrated by the following example.

Example of a confidence interval for percentage data. 

Suppose the estimate is 76.9 and the estimated standard 

error is 0.4 percent. An approximate 90 percent confidence 

interval is found by first multiplying the standard error by 

1.6 and then adding and subtracting that result from the 

estimate to obtain the upper and lower bounds. Since 1.6 x 

0.4 = 0.64, the confidence interval in this example is 76.9 + 

or - 0.64 or the range 76.26 to 77.54.

Non-sampling errors. All surveys and censuses are 

subject to non-sampling errors. Non-sampling errors are 

attributable to many sources, including the inability to 

obtain information for all cases in the universe, imputation 

for missing data, data errors and biases, mistakes in 

recording or keying data, errors in collection or processing 

and coverage problems.

While explicit measures of the effects of these nonsampling errors are not available, adjustments are made to 

the published relative standard errors to account for error 

associated with imputation of missing data. It is believed 

that most of the important operational and data errors 

were detected and corrected through an automated data 

edit designed to review the data for reasonableness and 

consistency. Quality control techniques were used to verify 

that operating procedures were carried out as specified.

Unpublished estimates. Some unpublished estimates 

can be derived directly from datasets by subtracting 

published estimates from their respective totals. However, 

the estimates obtained by such subtraction would be 

subject to poor response, high sampling variability, or other 

factors that may make them potentially misleading.

This Report. All of the data comparisons in this report, 

except where noted, are significant at the 90 percent 

confidence interval. Where data was computed from U.S. 

Census data and the standard error was not available, the 

standard error was estimated as the square root of the sum 

each of the standard error times the estimate squared. The 

2002 standard errors were not available for total minority 

estimates. The standard error for total nonminority is 

estimated as the square root of the standard error for white 

firms (times) the number of white firms (squared) (plus) 

the standard error for Hispanic firms times the number 

of Hispanic firms squared. When testing comparisons 

between total minority and nonminority estimates, the 

Census standard error for total nonminority was used as a 
The State of Minority Business Enterprises

43

proxy for the standard error of this report’s computed value 

for total nonminority. 

The U.S. Census Bureau population statistics used in this 

report did not include measures of standard error; therefore 

no tests for significance could be made for these data. For 

information on the reliability of individual minority group 

estimates and their relative standard errors, please visit the 

U.S. Census Bureau website at www.census.gov/econ/sbo/.

A detail of the RSE for select tables is included in 

Appendix B. The standard error was not available where 

data was calculated from U.S. Census data rather than 

taken from Census reports; these areas are marked “NA.”
The State of Minority Business Enterprises

44

APPENDIX B: 

Relative Standard Error Tables

Table A: Relative Standard Error (percent) for Number of All Firms, Receipts of All Firms for Table 1

Group Year

RSE of Estimate 

(percent) for Number 

of Firms

RSE of Estimate (percent) 

for Annual Gross Receipts

African American

2007 0 3

2002 1 1

American Indian and Alaska Native

2007 1 3

2002 2 6

Asian

2007 0 1

2002 0 2

Hispanic

2007 0 2

2002 0 3

Native Hawaiian and Other Pacific 

Islander

2007 4 6

2002 6 5

Total Minority

2007 0 1

2002 NA NA

Nonminority

2007 0 0

2002 NA NA

Publicly Held and Other Firms

2007 0 0

2002 0 0

All Firms

2007 0 0

2002 0 0
The State of Minority Business Enterprises

45

Table B: Relative Standard Error (percent) for Number of Employer Firms, Receipts of Employer Firms 

for Table 2

Group Year

RSE of Estimate 

(percent) for 

Number of Firms

RSE of Estimate (percent) 

for Annual Gross Receipts 

African American

2007 1 3

2002 1 1

American Indian and Alaska Native

2007 2 4

2002 2 4

Asian

2007 0 1

2002 1 2

Hispanic

2007 1 2

2002 1 3

Native Hawaiian and Other Pacific 

Islander

2007 6 7

2002 7 10

Total Minority

2007 0 1

2002 0 1

Nonminority

2007 0 0

2002 NA NA

Publicly Held and Other Firms

2007 0 0

2002 0 0

All Firms

2007 0 0

2002 0 0
The State of Minority Business Enterprises

46

Table C: Relative Standard Error (percent) for Top Five States for Minority Firms 

by Minority Group, 2007 for Table 4

State 

Ranking State RSE of Estimate (percent) for Number of Firms

All Minority

1 California 0

2 Texas 0

3 Florida 0

4 New York 1

5 Georgia 1

African American

1 New York 1

2 Georgia 1

3 Florida 1

4 Texas 1

5 California 1

American Indian and Alaska Native

1 California 3

2 Oklahoma 5

3 Texas 3

4 New York 6

5 Florida 4

Asian

1 California 0

2 New York 1

3 Texas 1

4 New Jersey 2

5 Florida 1

Hispanic

1 California 0

2 Florida 1

3 Texas 0

4 New York 1

5 New Jersey 1

Native Hawaiian and Other Pacific Islander

1 Hawaii 6

2 California 9

3 New York 10

4 Florida 17

5 Washington 17
The State of Minority Business Enterprises

47

Table D: Relative Standard Error (percent) for Share of Minority Firms 

and Minority Population by State, 2007 for Table 5

State RSE of Estimate (percent) for 

Number of Firms

Alabama 2

Alaska 4

Arizona 1

Arkansas 2

California 0

Colorado 2

Connecticut 2

Delaware 2

District of Columbia 2

Florida 0

Georgia 1

Hawaii 1

Idaho 5

Illinois 1

Indiana 1

Iowa 4

Kansas 3

Kentucky 3

Louisiana 1

Maine 8

Maryland 1

Massachusetts 1

Michigan 1

Minnesota 2

Mississippi 1

Missouri 2

Montana 8

Nebraska 4

Nevada 1

New Hampshire 7

New Jersey 1

New Mexico 1

New York 1

North Carolina 1

North Dakota 9

Ohio 1

Oklahoma 3

Oregon 3

Pennsylvania 1

Rhode Island 3

South Carolina 2

South Dakota 9

Tennessee 1

Texas 0

Utah 4

Vermont 11

Virginia 1

Washington 1

West Virginia 8

Wisconsin 1

Wyoming 11
The State of Minority Business Enterprises

48

Table E: Relative Standard Error (percent) for Minority Firms by State and 

Minority Group, 2007 for Table 6

State

RSE of Estimate (percent)

Minority African 

American

American 

Indian and 

Alaska Native

Asian Hispanic

Native Hawaiian 

and Other Pacific 

Islander

Alabama 2 1 8 5 6 33

Alaska 4 8 5 3 1 29

Arizona 1 1 6 2 2 S

Arkansas 2 2 12 7 5 57

California 0 1 3 0 0 9

Colorado 2 4 6 3 2 12

Connecticut 2 3 16 4 4 61

Delaware 2 2 S 6 9 59

District of Columbia 2 2 27 7 6 S

Florida 0 1 4 1 1 17

Georgia 1 1 7 2 2 22

Hawaii 1 7 14 1 7 6

Idaho 5 13 20 8 7 S

Illinois 1 1 8 2 3 14

Indiana 1 1 15 1 6 32

Iowa 4 12 22 5 7 56

Kansas 3 7 6 5 6 S

Kentucky 3 3 24 8 8 43

Louisiana 1 1 14 2 3 62

Maine 8 15 24 13 17 95

Maryland 1 1 11 1 3 24

Massachusetts 1 3 17 2 3 25

Michigan 1 1 5 2 6 22

Minnesota 2 2 6 3 6 S

Mississippi 1 1 23 5 10 29

Missouri 2 2 14 3 2 25

Montana 8 22 9 15 15 S

Nebraska 4 7 28 9 7 0

Nevada 1 3 13 2 3 20

New Hampshire 7 15 S 7 11 32

New Jersey 1 2 7 2 1 28

New Mexico 1 8 6 6 1 33

New York 1 1 6 1 1 10

North Carolina 1 1 7 2 4 27

North Dakota 9 27 17 14 26 42

Ohio 1 2 7 3 4 S

Oklahoma 3 4 5 4 7 33

Oregon 3 8 13 3 4 20

Pennsylvania 1 1 14 2 2 34

Rhode Island 3 6 22 8 3 43

South Carolina 2 2 15 4 4 34

South Dakota 9 34 9 23 16 63

Tennessee 1 2 13 3 4 23

Texas 0 1 3 1 0 13

Utah 4 11 10 5 6 12

Vermont 11 S 38 10 17 S

Virginia 1 1 10 2 2 19

Washington 1 S 9 2 2 17

West Virginia 8 S S 10 21 30

Wisconsin 1 3 8 4 7 S

Wyoming 11 18 10 21 14 0

Note: “S” indicates data was suppressed by Census
The State of Minority Business Enterprises

49

Table F: Relative Standard Error (percent) for Top Five Combined Statistical Areas (CSA) 

for Minority Firm Concentration, 2007 for Table 8

CSA 

Ranking CSA

RSE of Estimate 

(percent) for Number 

of Firms

All Minority

1 Los Angeles-Long Beach-Riverside, CA CSA 0

2 New York-Newark-Bridgeport, NY-NJ-CT-PA CSA 0

3 Miami-Fort Lauderdale-Pompano Beach, FL Metro Area 1

4 Washington-Baltimore-Northern Virginia, DC-MD-VA-WV CSA 1

5 San Jose-San Francisco-Oakland, CA CSA 1

African American

1 New York-Newark-Bridgeport, NY-NJ-CT-PA CSA 1

2 Washington-Baltimore-Northern Virginia, DC-MD-VA-WV CSA 1

3 Atlanta-Sandy Springs-Gainesville, GA-AL CSA 1

4 Chicago-Naperville-Michigan City, IL-IN-WI CSA 1

5 Miami-Fort Lauderdale-Pompano Beach, FL Metro Area 1

American Indian and Alaska Native

1 Los Angeles-Long Beach-Riverside, CA CSA 3

2 New York-Newark-Bridgeport, NY-NJ-CT-PA CSA 6

3 San Jose-San Francisco-Oakland, CA CSA 8

4 Tulsa-Bartlesville, OK CSA 6

5 Oklahoma City-Shawnee, OK CSA 10

Asian

1 Los Angeles-Long Beach-Riverside, CA CSA 1

2 New York-Newark-Bridgeport, NY-NJ-CT-PA CSA 1

3 San Jose-San Francisco-Oakland, CA CSA 1

4 Washington-Baltimore-Northern Virginia, DC-MD-VA-WV CSA 2

5 Chicago-Naperville-Michigan City, IL-IN-WI CSA 2

Hispanic

1 Miami-Fort Lauderdale-Pompano Beach, FL Metro Area 1

2 Los Angeles-Long Beach-Riverside, CA CSA 1

3 New York-Newark-Bridgeport, NY-NJ-CT-PA CSA 1

4 Houston-Baytown-Huntsville, TX CSA 2

5 Dallas-Fort Worth, TX CSA 2

Native Hawaiian and Other Pacific Islander

1 Honolulu, HI Metro Area 6

2 Los Angeles-Long Beach-Riverside, CA CSA 13

3 San Jose-San Francisco-Oakland, CA CSA 15

4 New York-Newark-Bridgeport, NY-NJ-CT-PA CSA 13

5 Seattle-Tacoma-Olympia, WA CSA 15
The State of Minority Business Enterprises

50

Table G: Relative Standard Error (percent) for Top Five Industry Sectors for Minority Firm 

Concentration, 2007 for Table 9

Industry 

Sector 

Ranking

Industry Sector

RSE of Estimate 

(percent) for 

Number of Firms

All Minority

1 Other services (except public administration) 0

2 Health care and social assistance 0

3 Administrative and support and waste management and remediation services 0

4 Professional, scientific, and technical services 1

5 Construction 0

African American

1 Health care and social assistance 0

2 Other services (except public administration) 0

3 Administrative and support and waste management and remediation services 1

4 Transportation and warehousing 1

5 Professional, scientific, and technical services 1

American Indian and Alaska Native

1 Construction 2

2 Other services (except public administration) 3

3 Health care and social assistance 3

4 Professional, scientific, and technical services 3

5 Administrative and support and waste management and remediation services 3

Asian

1 Other services (except public administration) 0

2 Professional, scientific, and technical services 1

3 Retail trade 1

4 Health care and social assistance 1

5 Accommodation and food services 1

Hispanic

1 Construction 1

2 Other services (except public administration) 0

3 Administrative and support and waste management and remediation services 1

4 Health care and social assistance 1

5 Transportation and warehousing 0

Native Hawaiian and Other Pacific Islander

1 Other services (except public administration) 5

2 Construction 8

3 Retail trade 12

4 Health care and social assistance 8

5 Professional, scientific, and technical services 12
The State of Minority Business Enterprises

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Table H: Relative Standard Error (percent) of Distribution for Minority-Owned and 

All Classifiable Firms by Industry, 2007 for Figure 7 and Figure 8

Industry 

RSE of Estimate 

(percent) for 

Nonminority 

Firms

RSE of Estimate 

(percent) for 

Minority Firms

Accommodation and food services 1 1

Administrative and support and waste management and remediation services 1 0

Agriculture, forestry, fishing and hunting 2 2

Arts, entertainment, and recreation 1 1

Construction 1 0

Educational services 2 1

Finance and insurance 1 1

Health care and social assistance 1 0

Industries not classified 13 9

Information 1 1

Management of companies and enterprises 2 7

Manufacturing 1 1

Mining, quarrying, and oil and gas extraction 2 8

Other services (except public administration) 1 0

Professional, scientific, and technical services 1 1

Real estate and rental and leasing 1 1

Retail trade 1 1

Transportation and warehousing 1 0

Utilities 6 4

Wholesale trade 2 1

Total for all sectors 0 0
The State of Minority Business Enterprises

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Table I: Relative Standard Error (percent) for Industries with the Highest Average 

Gross Receipts (thousands) for Minority Firms and All Firms, 2007 for Figure 9

Industry

Number of Firms Receipts

RSE of Estimate 

(percent) for 

Nonminority 

Firms 

RSE of 

Estimate 

(percent) 

for Minority 

Firms

RSE of Estimate 

(percent) for 

Nonminority 

Firms 

RSE of 

Estimate 

(percent) 

for Minority 

Firms

Accommodation and food services 1 1 1 1

Administrative and support and waste 

management and remediation services 1 0 1 2

Agriculture, forestry, fishing and hunting 2 2 2 6

Arts, entertainment, and recreation 1 1 1 6

Construction 1 0 1 2

Educational services 2 1 2 3

Finance and insurance 1 1 1 4

Health care and social assistance 1 0 1 1

Industries not classified 13 9 11 11

Information 1 1 1 5

Management of companies and enterprises 2 7 2 5

Manufacturing 1 1 1 3

Mining, quarrying, and oil and gas extraction 2 8 2 11

Other services (except public administration) 1 0 1 1

Professional, scientific, and technical services 1 1 1 1

Real estate and rental and leasing 1 1 1 2

Retail trade 1 1 1 2

Transportation and warehousing 1 0 1 2

Utilities 6 4 6 8

Wholesale trade 2 1 2 3

Total for all sectors 0 0 0 1
The State of Minority Business Enterprises

53

Table J: Relative Standard Error (percent) for Number of Firms by Industry Sector, 2007 for Table 10

Industry 

RSE of Estimate (percent)

Nonminority Minority

Black or 

African 

American

American 

Indian and 

Alaska 

Native

Asian Hispanic

Native 

Hawaiian and 

Other Pacific 

Islander

Total for all sectors 0 0 0 1 S 0 4

Agriculture, forestry, fishing 

and hunting 0 2 5 7 5 3 S

Mining, quarrying, and oil and 

gas extraction 1 8 S 23 16 8 97

Utilities 4 4 7 39 21 6 30

Construction 0 0 1 2 1 1 8

Manufacturing 1 1 3 3 3 2 17

Wholesale trade 0 1 2 4 1 2 18

Retail trade 0 1 1 4 1 2 12

Transportation and 

warehousing 0 0 1 4 1 0 11

Information 1 1 2 6 3 3 19

Finance and insurance 0 1 2 11 2 2 18

Real estate and rental and 

leasing 0 1 1 6 1 1 12

Professional, scientific, and 

technical services 0 1 1 3 1 1 12

Management of companies 

and enterprises 2 7 21 0 14 19 60

Administrative and support 

and waste management and 

remediation services

0 0 1 3 1 1 10

Educational services 1 1 1 8 3 3 18

Health care and social 

assistance 0 0 0 3 1 1 8

Arts, entertainment, and 

recreation 0 1 1 5 2 2 14

Accommodation and food 

services 0 1 2 8 1 1 21

Other services (except public 

administration) 0 0 0 3 0 0 5

Industries not classified 5 9 10 38 19 23 S

Note: “S” indicates data was suppressed by Census
The State of Minority Business Enterprises

54

APPENDIX C: Maps

Figure 12: U.S. Map of Minority Firms (Employer and Non-Employer) by State Concentration, 2007

.

Percentage of All U.S. Minority Firms

0.0% to 1.0%

1.0% to 3.0%

3.0% to 5.0%

5.0% to 13.0%

13.0% to 25.0%
The State of Minority Business Enterprises

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Figure 13: U.S. Map of Change in Concentration of Minority Firms (Employer and Non-Employer) by 

State, 2002-2007

Percent Change

0% to 15%

15% to 30%

30% to 45%

45% to 60%

60% to 75%

75% to 90%

90% to 100%
The State of Minority Business Enterprises

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Figure 14: U.S. Map of Change in Gross Receipts of Minority Firms (Employer and Non-Employer) by 

State, 2002-2007

Change in Receipts

-100% to 0.0%

0.0% to 20.0%

20.0% to 40.0%

40.0% to 60.0%

60.0% to 80.0%

80.0% to 200.0%

Data supressed
The State of Minority Business Enterprises

57

REFERENCES 

Robert Fairlie and Alicia Robb. Race and Entrepreneurial Success: Black-, Asian-, and White-Owned Businesses in 

the United States. Cambridge: MIT Press, 2008. 

U.S. Census Bureau. Table 2. Intercensal Estimates of the Resident Population by Sex, Race, and Hispanic Origin 

for the United States: April 1, 2000 to July 1, 2010 (US-EST00INT-02), Release Date: September 2011, last 

accessed on October 13, 2014, https://www.census.gov/popest/data/intercensal/national/nat2010.html 

U.S. Bureau of Census. 2007 Survey of Business Owners, available at http://www.census.gov/econ/sbo/

U.S. Bureau of Census. 2002 Survey of Business Owners, available at http://www.census.gov/econ/sbo/

U.S. Department of Commerce, Minority Business Development Agency. Disparities in Capital Access between 

Minority and Nonminority-Owned Businesses: The Troubling Reality of Capital Limitations Faced by MBEs, Robert 

Fairlie and Alicia Robb. 2010. 

U.S. Department of Commerce, Minority Business Development Agency. The State of Minority Business 

Enterprises: An Overview of the 2002 Survey of Business Owners. 2006.
The State of Minority Business Enterprises

58

ABOUT THE MINORITY BUSINESS 

DEVELOPMENT AGENCY (MBDA)

The U.S. Department of Commerce’s Minority Business Development Agency (MBDA) is the only federal agency solely 

dedicated to the growth and global competitiveness of minority-owned businesses in America. Established in 1969, 

MBDA provides services to African American, Asian American, Hasidic Jew, Hispanic American, Native American/

Alaskan, Native Hawaiian and Pacific Islander entrepreneurs. 

MBDA’s mission is to promote the growth and sustainability of minority-owned businesses through the mobilization 

and advancement of public and private sector programs, policy, and research. The Agency coordinates and leverages a 

nationwide network of more than 40 MBDA Business Centers and a wide range of domestic and international strategic 

partners in support of its mission. 

Over the past several years, MBDA has focused on providing business development services to minority entrepreneurs 

who are pursuing federal contracts, emerging industries, alternative sources of capital, and expansion to global 

markets. These services, and other Agency programs and initiatives, continue to position minority entrepreneurs to 

build size, scale and capacity, create jobs, and strengthen the U.S. economy.

About the U.S. Department of Commerce

The U.S. Department of Commerce promotes job creation, economic growth, sustainable development, and improved 

standards of living for all Americans by working in partnership with businesses, universities, communities, and our 

Nation’s workers. The department touches the daily lives of the American people in many ways, with a wide range of 

responsibilities in the areas of trade, economic development, technology, entrepreneurship and business development, 

environmental stewardship, and statistical research and analysis.
The State of Minority Business Enterprises

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The State of Minority Business Enterprises

60

1401 Constitution Avenue, NW

Washington, DC 20230

202-482-2332

www.mbda.gov