Businesses Owned by Entrepreneurs of Color in the Twin Cities metro area

Businesses Owned by Entrepreneurs of Color in the Twin Cities metro area

Overview: Businesses Owned by Entrepreneurs of Color How many businesses owned by entrepreneurs of color are there? To which racial and ethnic groups do entrepreneurs of color belong? In which industries do they operate? How many jobs do these businesses create? How have jobs changed over time? Where are businesses located? 2

Two Census sources of data Survey of Business Owners Large sample surveyed every 5 years. Surveys businesses with or without employees. Data available for all metros and counties. Annual Survey of Entrepreneurs Smaller sample surveyed annually. Surveys businesses with employees only. Data available only for large metros and not for counties. 3

More on data sources Both surveys provide statistics on business-owner demographics: Race Ethnicity Gender Veteran status Both surveys provide estimates of: Sales/Receipts/Revenue Payrolls Employment by sector Caveat: The statistics from each survey are not comparable due to methodological differences. 4

Definitions Businesses owned by entrepreneurs of color are firms where more than 50% of the firm is owned by [an] individual[s] self-identified as person(s) of color. The owner of a Latino-owned business can be of any race. The surveys do not ask the race and ethnicity of employees. 5

2014 Annual Survey of Entrepreneurs Minneapolis-St. Paul MSA

Less than 1 in 10 businesses owned by entrepreneur of color White-owned 59,539 84% Equally-owned 552 1% Other 5,765 8% Publicly-owned or unknown 5,320 7% Asianowned 3,003 4% Latino-owned 656 1% Other people of color 878 1% Black-owned 1,228 2% Source: Annual Survey of Entrepreneurs, 2014; Minneapolis-St. Paul MSA 7

One in 25 jobs in businesses owned by people of color Equallyowned 4,014 0% Publicly-owned or unknown 924,377 54% White-owned 709,140 42% Other 65,989 4% Asian-owned 30,058 2% Black-owned 29,578 2% Other people of color 6,353 0% Source: Annual Survey of Entrepreneurs, 2014; Minneapolis-St. Paul MSA 8

Share of Firms Owned by and Employees Paid by Entrepreneurs of Color 18% 14% 8% 9% Share of Firms Owned by Entrepreneurs of Color 13-County MSA Share of Employees Paid by Firms Owned by Entrepreneurs of Color Nation Source: Annual Survey of Entrepreneurs, 2014. Note: These are shares within the total number of firms with employees for which the race and ethnicity of the owners can be classified and not the total number of firms. 9

Comparing to Peer Metros San Francisco Atlanta Dallas Seattle Chicago Austin Phoenix Share of business-owners Denver Portland Boston Twin Cities Pittsburgh 0% 10% 20% 30% 40% Source: Annual Survey of Entrepreneurs, 2014. Twin Cities refer to the 13-County Metropolitan Area. Note: These are shares within the total number of firms with employees for which the race and ethnicity of the owners can be classified and not the total number of firms. 10

Comparing to Peer Metros San Francisco Dallas Atlanta Austin Chicago Phoenix Denver Share of population Seattle Boston Portland Twin Cities Pittsburgh 0% 10% 20% 30% 40% 50% 60% 70% Source: U.S. Census Bureau American Community Survey. 11

Comparing to Peer Metros Seattle San Francisco Portland Atlanta Dallas Assumes the same share of business owners of color as residents of color Boston Pittsburgh Chicago Austin Denver Phoenix Ratio Twin Cities - 0.20 0.40 0.60 0.80 1.00 Source: Annual Survey of Entrepreneurs, 2014 and U.S. Census Bureau American Community Survey. Note: These are shares within the total number of firms with employees for which the race and ethnicity of the owners can be classified and not the total number of firms. 12

Sectoral Breakdown of Firms Owned by Entrepreneurs of Color (13-County Metro) Accommodation and food services Health care and social assistance Professional, scientific, and technical services Retail trade Other services (except public administration) Construction Wholesale trade Administrative and support and waste Manufacturing Real estate and rental and leasing Finance and insurance Educational services Transportation and warehousing 303 220 156 127 101 83 72 69 489 448 705 1,198 1,135 Source: Annual Survey of Entrepreneurs, 2014. Note: These figures include only firms with employees. 13

Scale of impact on employment Firms owned by entrepreneurs of color 1,662,813 All other private employment 297,916 65,989 Total employment (people of all races) of entrepreneurs of color Total employment of people of color (in all types of employers) Total private sector employment Sources: Annual Survey of Entrepreneurs, 2014; Local Employment Dynamics, 2014; Current Employment Statistics. 14

Location & change over time

Number of Firms Owned by Entrepreneurs of Color Anoka Carver 203 596 2,080 2,680 (194%) (29%) Seven-County Total 2007: 25,628 2012: 39,572 2007-2012: 54% increase Dakota 2,766 4,207 (52%) Hennepin 12,884 19,399 (51%) Ramsey 5,602 9,506 (70%) Scott 662 1,095 (65%) Washington 1,431 2,089 (46%) 2007 2012 Source: Survey of Business Owners, 2007 and 2012. Note: These figures include firms with or without employees. 16

Paid Employees of Firms Owned by Entrepreneurs of Color Anoka Carver 1,982-3% 1,932 303 282% 1,156 Seven-County Total 2007: 31,535 2012: 48,241 2007-2012: 53% increase Dakota 1,896 3,806 101% Hennepin 19,900 41% Ramsey 5,637 11,237 99% 28,064 Scott 767 884 15% Washington 1,050 1,162 11% 2007 2012 Source: Survey of Business Owners, 2007 and 2012. Note: These figures include only firms with employees. 17

Policy Implications: To succeed, entrepreneurs need: Access to capital Access to contracts Access to technical assistance Access to markets 18