February is Black History Month in the U.S. and Canada. Throughout the month, we celebrate achievements by black Americans through cultural and institutional programs: Schools focus curriculum on the central role of African Americans in U.S. history. The NAACP Image Awards recognize current achievements in the arts. Articles pop up with advice on how to learn more about black history, heritage, culture, and how to support black-owned businesses and non-profits.
Black History Month grew out of “Negro History Week,” championed in 1926 by noted historian Carter G. Woodson and other prominent African Americans. Originally celebrated during the second week of February, in conjunction with the birthdays of Abraham Lincoln and Frederick Douglass, Negro History Week expanded into Black History Month in 1976. During our nation's bicentennial, President Gerald Ford officially recognized February as Black History Month, urging Americans to "seize the opportunity to honor the too-often neglected accomplishments of black Americans in every area of endeavor throughout our history."
Some 40 years later, we can still argue that the accomplishments of black Americans are too often neglected and those who neglect them are shortsighted. The social and cultural contributions of black Americans receive most of the attention this month, but the growing impact of black-owned businesses cannot—and should not—be ignored.
The Importance of Black Business Ownership
“Black business ownership is on the rise,” proclaimed the U.S. Census Bureau in February 2016. Using data gathered during the economic census that is conducted every five years, the Bureau reported that the number of black-owned firms grew 34.5 percent between 2007 and 2012—from 1.9 million to 2.6 million in 2012. In contrast, the total number of firms in the U.S. increased a mere two percent during the same period, from 27.1 million in 2007 to 27.6 million in 2012.
Despite the increase, these numbers reveal disproportion when compared to the overall population—black-owned businesses account for 9.4 percent of all U.S. firms, while African Americans account for 13.3 percent of the U.S. population. But the proportional disparity is rapidly decreasing, and the charge is being led by black women.
The Census Bureau found that the number of black-female-owned firms climbed 66.9 percent, from 900,000 in 2007 to 1.5 million in 2012. Additionally, these 1.5 million black-female-owned businesses accounted for 58.9 percent of the nation’s 2.6 million black-owned businesses. Nationally, women owned just over a third (35.8 percent, or 9.9 million) of all firms in 2012.
According to the most recent data available, black-owned firms generated $150.2 billion in sales in 2012. Consider that these firms are also job creation engines and pay local and state taxes and you begin to have an idea of the growing economic impact of black-owned companies.
Still, sales generated from these firms were less than half of a percent (0.4 percent) of the total sales for all firms ($33.5 trillion) in 2012. When looking solely at firms classifiable by gender, ethnicity, race, and veteran status, sales from black-owned businesses made up 1.3 percent of total sales ($12 trillion).
This disparity is also visible between genders. Even though black-owned businesses were predominantly women-owned (58.9 percent), the reverse was true for revenue. Approximately two-thirds (66.7 percent) of the $150.2 billion in sales generated by black-owned firms were from male-owned businesses ($100.1 billion) in 2012.
These numbers paint a clear picture. Black Americans are increasingly entrepreneurial. They are starting businesses much more often than their white counterparts. And black women are leading the way. At the same time, they continue to face obstacles to business success; to obtaining a seat at the table; and access to opportunities, capital, and economic equality.
The Importance of Black Americans’ Achievements
Throughout this month when we celebrated the achievements and contributions of black Americans, perhaps we should take a look at whether or not our procurement processes are removing those obstacles for black business owners. Does our bidding process insure that black-owned businesses are being invited to participate? Is our supplier development program inclusive? Does our supplier outreach include a presence at national and regional events where we can meet black business owners and potential suppliers?
The number of black-owned businesses is increasing at a tremendous rate. Now is the time to make sure our programs and initiatives are aligned to take advantage of the innovative, competitive opportunities this growing segment of entrepreneurs brings to the table.