AUSTIN--The number of black-owned businesses in Texas is growing but the firms remain small in comparison to other Texas businesses, and their owners face barriers to growth and profitability, according to a new report from the Bureau of Business Research at the University of Texas at Austin.
The study found a strong concentration of black-owned businesses in the service sector, which is considered a growing piece of the economy. Also, the study found that educational attainment was “quite high” among the respondents to the study, said Bruce Kellison, co-author of the study and associate director of the Bureau of Business Research
The study surveyed more than 900 black-owned Texas businesses.
“We were surprised at the concentration in the service sector among our respondents,” said Kellison, whose study was presented at the Texas Capitol on Thursday morning. “The educational attainment was quite high and that’s a good sign that black business owners are well educated and education correlates highly with business performance.”
Black-owned businesses accounted for 7 percent of all businesses in Texas in 2007, up from 5 percent in 2002, according to the U.S. Census Bureau. That’s 154,283 firms out of 2.1 million, the report said, which is up from 88,768 firms in 2002
More than 95 percent of Texas black-owned businesses are solo-practitioners, with no employees other than the owner, according to the study.
On average, the businesses employed 10 workers in 2007, while the average business in Texas employs 23, the report said. The average black-owned business had $60,000 in sales in 2007, versus $1.2 million for the average Texas firm.
These businesses, however, showed an ability to remain in operation for years, despite their small size.
Many “in the survey have been able to remain in business for years, with about 50 percent of the survey respondents reporting that they have been in business for more than 10 years,” the report said. “Previous research has found that the longer a business is operating, the less likely it is that the business will fail.”
Kellison said one of the roadblocks facing black-owned businesses is their lack of access to capital and loans.
“There are still challenges,” he said. “We asked some questions about how many of them had applied for business loans and that number was not was quite high. There was some disconnect to their access to business capital. Their accessibility to working capital is not what it could be.”
Posted By: Siebra Muhammad
Sunday, June 22nd 2014 at 4:49PM
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