Report: Black Business Owners in Texas Face Challenges

Business report shows significant barriers to growth and profitability

9. AUSTIN, TX 

Everything is big in Texas, including spending. Austin locals record an average monthly spending of $213 on clothes, shoes and other fashion-related wear.

  • 9. AUSTIN, TX
Everything is big in Texas, including spending. Austin locals record an average monthly spending of $213 on clothes, shoes and other fashion-related wear.

They say everything is “bigger in Texas”, but apparently not black owned businesses in the lone star state.

According to a new report, from the Bureau of Business Research at The University of Texas at Austin, the vast majority (95%) of black-owned businesses in Texas have no paid employees other than the owner. In sales and number of employees, black-owned businesses lagged behind state averages. In 2007, the average black-owned business had 10 employees and $60,000 in sales, while the average Texas business had 23 employees and $1.2 million in sales.

On a brighter note, the report also shows, “the number of black-owned businesses in Texas is growing faster than the state average for all businesses. The state saw a 74% jump in the number of black-owned businesses between 2002 and 2007, compared with a 25% rise in the number of Texas businesses overall during the same period.

In their responses, most black business owners indicated they had the education and skills needed to succeed. But they conceded they will need improvement in the areas of political access and contracting opportunities.

But  during a survey that was used in the research, a majority of those surveyed (76%) said “they perceive black-owned businesses to have less access than other firms to government decision makers who influence procurement opportunities. A majority of survey respondents also believed that black-owned businesses were unfairly excluded from taking part in contracting opportunities with government (63%) and the private sector (70%).

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The Bureau of Business Research, part of the IC2 Institute at The University of Texas at Austin, surveyed 914 black-owned businesses across the state.

More findings from the report include:

More than 50% of the respondents had never applied for a business loan and almost 20% had applied but never received one, only 28% had received business loans.

Respondents believed their businesses were less profitable than their peers in the same industry, a perception that was especially strong among non-employer firms.

Accounting and finance were seen as the top training needs in most firms.

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