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Facts On Working Women

U.S. Department of Labor
Women's Bureau 

No. 89-7
September 1989


BLACK WOMEN BUSINESS OWNERS

According to the Bureau of the Census, U.S. Department of
Commerce, women owned 2.7 million sole proprietorships in
the United States in 1982. In a recent study by Faith
Ando and Associates, "Minorities, Women, Veterans and the
1982 Characteristics of Business Owners Survey, A
Preliminary Analysis," it was reported that Black women
owned 3.8 percent of all women-owned sole proprietorships
in the United States in 1982. 

Similar to firms owned by all women, those owned by Black
women (82 percent) are more likely to be in services (53
percent) and retail trade (29 percent). The 6 States with
the highest share of firms owned by Black women are
California (14 percent), Texas (9 percent), New York (9
percent), Maryland (6 percent), Illinois (5 percent), and
Ohio (5 percent). Further, according to the Ando report,
among sole proprietorships owned by Black women: 

-- Sixty percent were home-based, about the same as among
all women-owned sole proprietorships (61 percent). 

-- About 96 percent had no employees and 3 percent had
one to four employees. Women were employed in 3 percent
of the firms and minorities were employed in 4 percent. 

-- More than 93 percent did not export any of their goods
or services. 

-- In 1982, 57 percent of the firms had less than $5,000
in sales and 34 percent had between $5,000 and $24,999 in
sales. 

-- Most showed some profits. About one-fourth suffered a
net loss. Of firms owned by Black women, 46 percent had
1982 profits of less than $5,000; 21 percent had profits
between $5,000 and $19,999; and 24 percent had a net loss
of less than $5,000. Among all women-owned sole
proprietorships, 40 percent had profits below $5,000 and
15 percent had a net loss of less than $5,000. 

-- About 27 percent reported none of their income
originated with the firm. On the other hand, 18 percent
reported that 100 percent of their 1982 income came from
their businesses. 

-- About 43 percent had no initial capital and an
additional 44 percent began with less than $5,000. 

-- Seventy-three percent of Black women reported their
firms had no equity capital. Of those with equity
capital, the dominant source (12 percent of firms) was
family. 

-- With respect to the firm's initial debt ratio, about
71 percent had no debt. However, 9 percent had between 91
and 100 percent debt. Three debt sources dominate in the
case of firms owned by Black women--banks (50 percent),
family (27 percent), and friends (14 percent). 

-- About half of firms owned by Black women in 1982
survived until 1986. The two chief reasons given by those
that discontinued operations were insufficient profit (41
percent) and personal (47 percent). 


Black women business owners are likely: 

- to be between the ages of 25 and 54 (71 percent). 

- to be married (55 percent). 

- to have at least 1 year of college (51 percent). 

- to have been business owners for less than 7 years (72
percent). About 29 percent had been in business for less
than 1 year. 

- to have been founders of the firm covered in this
report (72 percent). About 8 percent had previously owned
another business. 

- to have had previous paid employment (82 percent).
Although 63 percent had had no managerial experience in
paid employment, 65 percent had attended business courses
or seminars. 

- to have had few role models. Only 22 percent of Black
women business owners had close relatives who owned a
business. Of those with a role model, 29 percent reported
they had worked for the relative. About 39 percent of all
women sole proprietors had a role model. 

Opportunities for Black and other women business owners
should be enhanced by the Women's Business Ownership Act
of 1988 which authorizes $10 million over a 3-year period
for private organizations to provide financial,
management, marketing, and technical assistance to women
business owners. Information about programs funded under
this Act may be obtained from the Office of Women's
Business Ownership in the U.S. Small Business
Administration at (202) 653-8000. 

The Office of Women's Business Ownership in the U.S.
Small Business Administration recently announced a
program to foster long-term mentoring relationships
between successful women-owned businesses and fledgling
women-owned businesses of 1 to 3 years. Additional
information about this program, Women's Network for
Entrepreneurial Training (WNET), may be obtained from the
Office of Women's Business Ownership at (202) 653-8000. 


SOURCES: "Minorities, Women, Veterans and the 1982
Characteristics of Business Owners Survey, A Preliminary
Analysis," Faith Ando and Associates, Haverford,
Pennsylvania, September 1988; and U.S. Small Business
Administration. 


The Voice of Working Women for 70 Years
1920-1990

U.S. Department of Labor
Office of the Secretary
Women's Bureau
200 Constitution Avenue, N.W.
Washington, D.C.  20210-9990