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Females and minorities long have started the majority of small businesses.
The minority trend, particularly among African Americans, is accelerating, according to the Minority 2018 Small Business Trends survey by Guidant Financial.
The new survey, of 2,600 business owners and aspiring entrepreneurs, found that 45 of small business in the country were owned by minority ethnic groups in 2018. This is a big uptick from 2015 when the total percentage of minority business owners was 15 percent. The largest minority group of respondents were African American (19 percent), Hispanic (14 percent), Asian (8 percent) and Native American (4 percent).
According to a related article in Black Enterprise, among black small business owners, 63 percent were men and the rest women while most of the black owners were between the ages of 40 and 59.
The survey showed that the highest volume of black entrepreneurs lives in Texas, followed by Georgia, California, Florida, and North Carolina.
“Growth amongst all minorities including women is promising in America as small business ownership becomes more favorable and easier to attain,” said CEO David Nilssen of Guidant Financial. “We anticipate and hope to see a continued increase.”
Sixty-two percent of black owners said a desire to pursue their passion motivated them to start a business; more than half said they were ready to run their own shop and 22 percent were diissatisfied working in corporate America. Twelve percent said they launched after being laid off or their jobs outsourced.
An overwhelming 80 percent of black entrepreneurs surveyed said too little capital was the most challenging aspect of running a business.
Black-owned businesses get very little venture capital in America and minority owners long have had more trouble qualifying for bank credit, partly because they are less wealthy than whites.
More than two-thirds of those surveyed financed their companies using cash, while 23 percent received funding from friends and family. Eleven percent said they tapped into their 401(k) plans to fund their businesses.