Feb 17, 2025 Story by: Editor
In 2022, the number of U.S. firms with a majority Black or African American ownership reached 194,585, marking a significant increase from 124,004 in 2017, according to the latest estimates from the Annual Business Survey (ABS), conducted by the U.S. Census Bureau and the National Science Foundation. During this period, gross revenue for Black-owned businesses surged by 66%, rising from an estimated $127.9 billion in 2017 to $211.8 billion in 2022.
Despite this progress, Black-owned businesses comprised only about 3% of all U.S. firms where owner demographics could be classified in 2022. Additionally, they accounted for just 1% of the total gross revenue generated by these companies. This is in contrast to the fact that Black Americans made up roughly 14% of the U.S. population in the same year.
Breakdown of Classifiable Companies
As has historically been the case, White-owned businesses represented the largest share of classifiable firms (84%) and revenue (92%) in 2022. Asian American majority-owned firms accounted for about 12%, while no more than 8% of businesses had majority owners from other racial or ethnic groups.
Employment in Black-Owned Businesses
In 2022, firms with Black or African American majority ownership employed approximately 1.6 million workers, with a total annual payroll estimated at $61.2 billion.
The majority of these businesses (71%) had between one and nine employees, while smaller shares had 10 to 49 (13%) or 50 or more (3%) employees. An additional 13% had paid employees at some point during the year but did not report having any employees at the time of the survey. (The ABS determines firm size based on the number of paid workers during the March 12 pay period.)
Leading Industries for Black-Owned Businesses
The most common sector for Black-owned businesses was health care and social assistance, accounting for nearly 50,000 of the approximately 195,000 firms—26% of the total—in 2022.
Other prominent industries included:
- Professional, scientific, and technical services (14%)
- Transportation and warehousing (9%)
- Administrative, support, and waste management services (8%)
- Retail trade (7%)
- Accommodation and food services (7%)
Geographic Distribution of Black-Owned Businesses
Approximately 90% of Black or African American majority-owned businesses were located in urban areas, while only 5% were in rural regions—defined as communities with fewer than 5,000 residents, according to Census Bureau classifications. The remaining 5% were unclassified by community type.
Several populous states had the highest numbers of Black-owned businesses in 2022:
- Florida: 21,064
- Georgia: 16,973
- Texas: 16,849
- California: 16,826
The District of Columbia had the highest percentage of Black-owned businesses among classifiable firms (16%), followed by Maryland (10%) and Georgia (10%).
Demographics of Black Business Owners
- Gender: In 2022, the majority (54%) of Black-owned firms had male owners, while 39% had female owners. Another 7% had equal male-female ownership.
- Age: Half of Black or African American business owners were between 35 and 54 years old, while 26% were aged 55 to 64, 16% were 65 or older, and only 7% were under 35.
- Education: Among those who reported their highest level of education, 27% held a bachelor’s degree, while 34% had a graduate or professional degree beyond a bachelor’s.
Motivations for Black Entrepreneurship
The ABS also surveyed Black or African American majority business owners on their reasons for entrepreneurship.
Around 90% cited income potential, the desire to be their own boss, or the need to balance work and family life as very or somewhat important motivations. Additionally, 88% viewed business ownership as the best way to bring their ideas, goods, and services to market, while 87% valued the flexibility of setting their own hours.
For most Black or African American majority owners, their business served as their primary source of income. Among those who disclosed their primary income source in 2022, 71% reported that their business was their main financial support. Source: Pew Research
