Same Markets, New Marketplaces

African American women are driving business to new frontiers. In a study titled African American Women-Owned Businesses in the United States, 2002, the Center for Women’s Business Research found that opportunities for African American women entrepreneurs in nontraditional locales surged between 1997 and 2002.

Wisconsin, Delaware, and Oregon were among the top 10 states where the number of firms that are majority-owned (51% or more) by African American women increased at high rates. “Growth happens when entrepreneurs have access to markets, training, and capital,” says Sharon G. Hadary, executive director of the center. “It is possible that these states sponsored economic programs to encourage new kinds of business in their states.”

Between 1997 and 2002, the number of African American women-owned businesses in Wisconsin increased by 45.3%. Delaware improved by 34.1%, and Oregon by 22.1%.

Hadary says that the level of participation of women entrepreneurs is driven by the large metropolitan areas in a state. The highest count of firms were in New York state and Florida, with firms likely concentrating in New York City and Miami. This ranking raises a slight distinction: These two cities likely have the nation’s highest populations of Caribbean-born black women. “African American women aren’t taking advantage of all the entrepreneurial opportunities also available to them,” says Hadary.

Like most U.S. firms, African American women’s firms don’t generate significant employment.” As of 2002, 78% of all U.S. businesses, and 87% of all women-owned businesses, have no employees,” says Hadary, affirming that many people simply claim themselves as sole proprietorships to the Internal Revenue Service and the U.S. Census Bureau. In 2002, the number of African American women’s firms totaled 356,110, yet they employed only 197,151 people. Just six states counted a higher number of employees than firms, and only Kansas and Texas had significantly higher ratios (Kansas’ 1,269 firms employed 3,856 workers, while Texas’ 21,223 firms employed 164,543).

Businesses in Texas and California recorded the highest overall gross sales at $4.8 billion and $1.9 billion, respectively.