Characteristics of Businesses and Business Owners – Census Bureau Report

U.S. Census Reports on Businesses and Business Owners Hot off the press from the Census Bureau are some interesting and telling facts about businesses and business owners in the U.S.A. One exciting addition to the reports — for the first time ever — is a breakout for men and women within each group. Read about this and much more in our summary of the Bureau’s findings.

Two reports were recently released by the U.S. Census Bureau based on data from the 2002 Survey of Business Owners: Characteristics of Businesses: 2002, and Characteristics of Business Owners: 2002. One exciting addition to the reports — for the first time ever — is a breakout for men, women and male/female joint ownership within each group.

A Census Bureau press release about their report, 2002 Survey of Business Owners: Women-Owned Firms, provides some interesting facts about women-owned businesses:

  • The number of women-owned businesses grew at twice the national average for all businesses between 1997 and 2002.
  • Women owned nearly 30 percent of nonfarm businesses in the United States in 2002.
  • Industries with the most women-owned businesses were health care and social assistance, other services (such as personal services, and repair and maintenance), and retail trade.
  • The vast majority of businesses owned by women had no employees (while 14 percent of women-owned firms employed more than 7.1 million people).
  • States with the fastest rates of growth for women-owned firms between 1997 and 2002 were Nevada (43 percent), Georgia (35 percent), Florida (29 percent) and New York (28 percent).

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16.7 million businesses responded to the U.S. Census Bureau’s 2002 Survey of Business Owners; this number representing 72.6 percent of the nation’s nonfarm firms. Data for 2002 are not directly comparable to previous survey years because of several significant changes to the survey methodology (the last survey was conducted for 1992). It is also important to note that these Census reports include data on businesses and business owners that filed 2002 tax forms and had receipts of $l,000 or more.

Some Figures on Franchising

Franchised businesses were 3.7 percent of all employer respondent firms, and the rate increases as the firm employment size increases. Accommodation and food service employer firms were most often franchised (16.2 percent), followed by employer firms in management of companies and enterprises (8.6 percent), and retail trade (7.1 percent).

In retail trade — one of the industries with the most women-owned businesses – there were 852,192 male-owned, 715,524 female-owned, and 330,074 equally male-/female-owned respondent firms. 8.4 percent of the male-owned employer respondent firms in this industry were franchised; 3.8 percent of the female-owned; and 6.3 percent of the male-/female-owned.

The sectors with the overall greatest percentage of employer respondent firms that were franchised are:

  • Equally male-/female-owned Asian: 10.3 percent
  • Equally male-/female-owned Black or African American: 8.1 percent
  • Male-owned Asian: 7.4 percent
  • Asian: 7.2 percent

Since 2-in-3 Asian-owned firms reported they conducted business from nonresidential locations (all other minorities reported about half or more of their businesses as home-based), this could account in part for the greater percentage of Asian firms that are franchised.

Statistics for employer respondent firms operated as franchised by Hispanic or Latino Origin, Race, and Gender show the following sectors as those with the greatest overall number of franchises:

  • Non-Hispanic or Non-Latino firms: 15,340,683 firms/3.8 percent franchised
  • White firms: 14,769,662 firms/3.5 percent franchised
  • Male-owned firms: 9,544,370 firms/3.6 percent franchised

Female-owned employer respondent firms came in at 4,659,815, with 3.4 percent franchised. Equally male-/female-owned respondent firms were 2,005,090, with 5.4 percent franchised.

The following sectors with the lowest overall number of franchises in employer respondent firms:

  • Equally male-/female-owned Native Hawaiian and Other Pacific Islander:
    1,117 firms/ “S” percent franchised (S: estimates are suppressed; i.e., when firm count is less than three)
  • Equally male-/female-owned American Indian and Alaska Native:
    4,577/ “S” percent franchised
  • Female-owned Native Hawaiian and Other Pacific Islander:
    6,129 firms/”S” percent franchised

General Highlights

Almost half (49 percent) of the nation’s businesses are operated from home, and more than 6-in-10 owners used their own money to start the business, according to the new Census Bureau reports. “Home-based businesses collectively generated a remarkable amount of economic activity, especially for women and minorities,” said Census Bureau Director Louis Kincannon in a September 27, 2006 press release.

The data show self-employed individuals who have no paid employees operate three-fourths of U.S. businesses. Forty-two percent of owner-operated firms with no paid employees and revenues of less than $5,000 operated their business to supplement their income.

In 2002, 64 percent of business owners had at least some college education at the time they started or acquired ownership in their business. Just over 1-in-4 owners had a high school education or less.

Thirty-one percent of owners were more than 55 years of age, 29 percent were between 45 and 54, and 24 percent were between 35 and 44. Only 2 percent of owners were less than 25 years of age.

More than half of business owners reported their primary function was managing day-to-day operations and producing their business goods and services (survey respondents could check more than one category).

When it comes to putting in long hours, more than half the owners of firms with paid employees reported working overtime (more than 40 hours a week, in average). Only 26 percent of owners of nonemployer firms reported they worked overtime.

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