Facts On Black-Owned Businesses in the U.S.
According to Pew Center Data, Black entrepreneurship in the U.S. has seen remarkable growth in recent years. In 2022, there were 194,585 Black- or African American-majority-owned businesses, marking a significant increase from 124,004 in 2017. This represents a 57% surge in the number of Black-owned firms, according to the latest estimates from the Annual Business Survey (ABS) conducted by the U.S. Census Bureau and the National Science Foundation.
Not only did the number of Black-owned businesses grow, but their financial performance improved as well. Gross revenue for these businesses soared by 66%, increasing from $127.9 billion in 2017 to $211.8 billion in 2022.
Despite these positive trends, Black-owned businesses still make up a small share of the overall U.S. economy. In 2022, they accounted for just 3% of all classifiable U.S. firms and only 1% of the total gross revenue from classifiable businesses. This is in stark contrast to the 14% of Americans who identify as Black.
Understanding the Landscape: Who Owns and Runs U.S. Businesses?
A large portion of U.S. businesses are majority-owned by White Americans, who accounted for 84% of classifiable firms and 92% of total revenue in 2022. Meanwhile, 12% of firms had Asian American majority owners, and no more than 8% of businesses had owners from any other racial or ethnic group.
Black-Owned Businesses and Employment
A major contribution of Black-owned businesses is job creation. In 2022, Black-majority-owned firms employed approximately 1.6 million workers and had annual payrolls estimated at $61.2 billion.
However, most Black-owned businesses tend to be small-scale operations:
71% had between 1 and 9 employees.
13% had 10 to 49 workers.
3% employed 50 or more workers.
13% reported having paid employees at some point during the year but none at the time of the survey.
Where Are Black-Owned Businesses Thriving?
Most Common Sectors
Health care and social assistance dominate as the most popular sector for Black-owned businesses. In 2022, nearly 50,000 Black-majority-owned firms—26% of all Black-owned businesses—operated in this field.
Other key industries include:
Professional, scientific, and technical services (14%)
Transportation and warehousing (9%)
Administrative, support, and waste management services (8%)
Retail trade (7%)
Accommodation and food services (7%)
What Motivates Black Entrepreneurs?
The Annual Business Survey (ABS) revealed that Black business owners are driven by several key motivations:
90% cited the opportunity for greater income.
A strong desire for independence was another common factor, with many seeking to be their own boss.
Balancing work and family life was important for the majority.
88% said they pursued entrepreneurship as the best way to bring their ideas, goods, and services to market.
87% valued the flexibility of owning a business.
Perhaps most notably, for 71% of Black business owners, their business was their primary source of income.
The growing number of Black-owned businesses is a testament to the resilience, innovation, and entrepreneurial spirit of Black entrepreneurs across the U.S. While challenges remain - particularly regarding access to capital and overall business representation - the increasing number of Black-owned firms and their economic contributions signal a positive trend.
With continued support, investment, and policy initiatives aimed at fostering Black entrepreneurship, these businesses can play an even greater role in the nation’s economy in the years to come. Connect with Black Media today.