Research

Key Facts

1

Black & Hispanic owned businesses have the highest failure rates in the US¹

2

Black families in the US possess about 1/10th of the wealth of white families

3

Blacks comprise 14.2% of the US population, but Black-owned businesses only 2.2%

4

Black-owned businesses are much more likely to be sole proprietors

5

Blacks own approximately 124,551 businesses, the highest percentage of any minority group

6

While 1 in 5 Black Americans are running a new business, only 4% of these businesses are older than 3.5 years

7

Average Black-owned business earns $858k in annual revenue vs. $2.4M for their white-owned counterparts

8

Black businesses fall short vs. non-Black businesses on annual revenue, # of employees, and average pay

9

Less than 1% of VC-backed founders are Black despite comprising 20% of entrepreneurial activity

Key Challenges & Obstacles

While there is a growing Black middle class, the average Black household income is the lowest of all races

Source: U.U. Senssu Bureau, Current Populaiton Survey, 1968 to 2018 Annual Social Economic Supplements

Asian

$81,331

White

$68,145

All races

$61,372

Hispanic

$50,486

Black

$40,258

Source: U.U. Senssu Bureau, Current Populaiton Survey, 1968 to 2018 Annual Social Economic Supplements

KEY CHALLENGES

African-Americans are more likely to start businesses, but are also more likely to fail...

Expand educational and networking opportunities

Studies have found that business owners with higher levels of business and financial education are more likely to also see higher sales, profits, and survival rates. The private and social sectors—particularly anchor institutions such as universities—could offer educational resources aimed at business owners and their employees.

Provide access to capital

"The credit gap, compounded by the trust gap and lending biases, means that the bulk of minority business owners have less access to bank financing and rely more on their own investments." - Interise

Enhance communication tactics

Financial institutions can make the process of getting financial assistance more user friendly. Many small Black businesses may lack access to the resources and tools needed to apply for loans and financial support offered by the government and private sector.

The Case for Intentional Investment in Pittsburgh

"Pittsburgh’s racist origins and low-quality neighborhoods of color have led to an exodus of BIPOC communities. Today, young BIPOC Pittsburghers do not see a future for themselves in the city and are moving to more diverse, cities like Atlanta, New York, or San Francisco. While impressive corporations and universities call Pittsburgh home, White-led organizations have hoarded the spoils of Pittsburgh’s innovation economy."

• Jaishree Singh, David Sprenger, Nicholas Molpeceres, | Riverside Center for Innovation

Taking supplier collaboration to the next level

"Excelling at supplier collaboration requires a more active and engaged working relationship with suppliers. It also calls for a change in mindset, encouraging both buyers and suppliers to commit to the long-term pursuit of value from their collaborative relationships."

Agustin Gutierrez, Ashish Kothari, Carolina Mazuera, and Tobias Schoenherr | Mckinsey & Co.