Black women business ownership surges
(Source The St. Louis American):
August marks National Black Business Month but few Americans know its origin, and that East St. Louis, Illinois played a significant role.
After earning his engineering degree from Howard University in 1969, Frederick E. Jordan and three other engineers formed the company Jordan, Johns, Mathis, & Pierce.
After serving in the Vietnam War, Jordan earned an engineering degree from Howard University in 1969, and then attended Northeastern University in Boston in pursuit of his master’s degree in engineering.
While there, the Bechtel Corporation offered him a job in northern California, and he transferred to Stanford University.
Jordan and three other engineers formed the company Jordan, Johns, Mathis, & Pierce and sought out business in predominantly Black communities.
Black business ownership is growing at the fastest pace in 30 years, and the share of Black households owning a business has more than doubled, from 5% to 11% between 2019 and 2022, according to the U.S. Small Business Administration.
The projects were in San Francisco, East St. Louis, the south side of Chicago, and in Seattle.
In 1974, Jordan founded his own company, F.E. Jordan Associates, Inc., in San Francisco.
Jordan still remembered his early success was earned despite facing discriminatory practices by lending institutions in 2004 when he partnered with John Williams Templeton, the president and executive editor of the publishing company Access Corporation, to start National Black Business Month.
According to a US Black Chambers biography, Jordan and his partner sought to “drive the policy agenda affecting the 2.6 million African American businesses,” to highlight and empower Black business owners all over, especially given the unique challenges faced by minority business owners.
Jordan’s Black owned business was a rarity in the late 1960s, but his determination more than 60 years ago and work to create a month of Black business recognition is demonstrated in the growth of Black entrepreneurs.
Black business ownership is growing at the fastest pace in 30 years, and the share of Black households owning a business has more than doubled, from 5% to 11% between 2019 and 2022, according to the U.S. Small Business Administration.
The number of women-owned businesses has grown dramatically. From 2019 to 2023, the growth rate of women-owned businesses was 94% greater than the growth of men-owned businesses.
Census Bureau data projects that a record-breaking 5.5 million new business applications were filed in 2023, making it the strongest year of new business applications on record. It is also the third consecutive year of historic small business growth.
To show the rapid growth, in 2021 there were 161,031 U.S. firms with majority Black or African American ownership, up from 124,004 in 2017, according to the Annual Business Survey (ABS), conducted by the U.S. Census Bureau and the National Science Foundation.
Black-owned firms’ gross revenue soared by 43% during this time span, from an estimated $127.9 billion in 2017 to $183.3 billion in 2021.
However, just 3% of all U.S. firms were Black owned, and the firms accounted for just 1% of gross revenue from all classifiable companies that year. In 2021, about 14% of all Americans were Black.
In a report by Jada Ingleton of Word In Black, “Black women-owned businesses have been celebrating with a rise in presence, revenue, and development opportunities amidst ongoing infrastructure challenges, research shows.”
Black female entrepreneurs have dominated the business climate, representing roughly 2.1 million businesses and 52.1% of all Black-owned enterprises, according to a 2024 Wells Fargo Study
“When I think about the inherent qualities women carry – to be nurturers, to be community developers, to be community builders – I think it’s a natural need that exists in every community,” says Monica Ray, president of The Congress Heights Community Training and Development Corporation (CHCTDC).
When you think about small businesses and Black women, Black women represent the fastest-growing new business opportunities in the country. Small business in general generates all our local jobs. When you think about how to bridge the gap between how we build sustainable communities, we can’t leave Black women out of the conversation.”
Black women-owned businesses saw a surge with the COVID-19 pandemic, increasing 32.7% in average revenues between 2019 and 2023, compared to all women-owned businesses’ growth of 11.2%, according to a 2024 Wells Fargo Study.
Many of these initiative-takers utilized the lockdown to pivot or expand into new ventures, which allowed them to pursue more passions or earn a steady income.
Black or African American majority-owned firms provided income for roughly 1.4 million workers in 2021. Their annual payrolls were estimated at $53.6 billion.
Still, most Black-owned firms tend to be smaller businesses. Two-thirds had fewer than 10 employees in 2021; 13% had 10 to 49 employees and just 3% had 50 or more. Another 16% reported having no employees.
About 45,000 of the roughly 161,000 U.S. companies with majority Black or African American ownership, or 28% of the total, were in the health care and social assistance sectors in 2021.
Other common sectors that year included according to Pew Research:
- Professional, scientific and technical services (comprising 14% of all Black-owned businesses). This sector includes Worldwide Technology in Maryland Heights, Missouri, the nation’s largest Black owned business, which is led by David Steward, founder and chair.
- Administrative and support and waste management and remediation services (8%)
- Transportation and warehousing (8%)
- Retail trade (6%)
- Construction (6%)
Most Black or African American majority-owned businesses (87%) are in urban areas. Just 5% are in rural areas – that is, places with fewer than 2,500 inhabitants, under the Census Bureau’s definition.
When asked to choose from a list of reasons why they opened their firm, about nine-in-10 Black or African American majority owners who responded said an important reason was the opportunity for greater income; a desire to be their own boss; or wanting the best avenue for their ideas, goods and services. Balancing work and family life (88%) and having flexible hours (85%) were also commonly cited.
