African-American Business
3:57 pm
Thu June 19, 2014

Black-Owned Businesses Grow in Texas, But Still Trail Economically

Black-owned businesses in Texas are growing at a faster rate than Texas businesses as a whole – but they are trailing on several economic indicators, according to a new report.

The number of black-owned businesses in Texas increased 74 percent from 2002 to 2007, while the total number of Texas businesses rose only 25 percent in that period. While the increase seems impressive, the report goes on to say that this is largely because more than 95 percent of black-owned businesses in Texas are owned by single proprietors with no employees.

Nearly 1,000 black-owned businesses were surveyed for the report [PDF] from the University of Texas at Austin. It found that the average Texas business employs twice as many workers as the average black-owned business in the state. And while the average Texas business had $1.2 million in sales in 2007, the average black-owned business had $60,000 in sales that year.

The report was funded by the President’s Office of UT-Austin. University President Bill Powers and State Sen. Royce West, D-Dallas, joined the report’s authors on the steps of the Texas Capitol this morning to formally present the findings to the Texas Association of African-American Chambers of Commerce.

Chamber chairperson Jim Wyatt attributed the business disparity in part to black spending outside of the black community. “African-Americans in 2012 spent $1.2 trillion dollars,” he said, “and maybe less than two percent remained in our communities. And that’s why our communities look as they look today.”

Survey participants themselves had varied opinions. According to the report, a majority of respondents “agreed or strongly agreed the black-owned businesses were unfairly excluded from participating in government contracting opportunities and private sector contracting opportunities.”

The report produced three ultimate goals: to focus policy on increasing black access to financial capital; encouraging black entrepreneurs to start their businesses as teams with employees rather than sole proprietorships; and to target black-owned businesses in the construction and service sectors for growth training.