Business Value by Race

Definition

Ratio of the average business value, in terms of sales and receipts, of white, non-Hispanic-owned businesses to businesses owned by workers of color (Black or African-American; American Indian and Native Alaskan; Asian; Native Hawaiian and other Pacific Islander; Hispanic or Latino), 2007. Business ownership is defined as a business in which white workers or workers of color own 50% or more of the equity, interest or stock of the business.

Calculated by dividing the higher value by the lower value, i.e., the business value of white-owned businesses divided by those owned by workers of color.

A ratio of 1 indicates perfect equality; the higher the ratio, the greater the inequality. For example, the value of businesses owned by white workers in Louisiana is 4.7 times higher than for businesses owned by workers of color.

Description

Business ownership is a fundamental engine for wealth creation, and the value of these businesses, measured in annual sales, can demonstrate the extent of the profitability of the business and the potential for wealth creation. Not only do workers of color own businesses at a rate less than white workers, the value of white-owned business is far greater than that of businesses owned by workers of color, on average in every state. For example, the average sales and receipts of businesses owned by white workers in Mississippi is more than six times higher than for businesses owned by workers of color. 

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Business Value by Race

State	Average Receipts from White-Owned Businesses ($)	Average Receipts from Businesses Owned by People of Color ($)	Ratio	Rank
United States	$483,289	$182,964	2.64
Alabama	$497,640	$96,234	5.17	50
Alaska	$433,587	$165,625	2.62	28
Arizona	$449,644	$176,501	2.55	24
Arkansas	$440,083	$120,835	3.64	47
California	$529,061	$238,746	2.22	15
Colorado	$384,589	$195,023	1.97	10
Connecticut	$603,097	$176,247	3.42	43
Delaware	$506,163	$188,751	2.68	33
District of Columbia	$585,920	$226,031	2.59	26
Florida	$409,216	$154,185	2.65	31
Georgia	$517,678	$119,765	4.32	48
Hawaii	$375,501	$297,125	1.26	2
Idaho	$366,357	$190,734	1.92	8
Illinois	$538,958	$166,929	3.23	39
Indiana	$527,407	$195,243	2.70	35
Iowa	$428,013	$174,939	2.45	20
Kansas	$517,302	$194,799	2.66	32
Kentucky	$401,034	$195,166	2.05	12
Louisiana	$545,233	$116,460	4.68	49
Maine	$294,429	$150,487	1.96	9
Maryland	$504,012	$143,396	3.51	46
Massachusetts	$487,647	$180,660	2.70	34
Michigan	$413,110	$161,852	2.55	25
Minnesota	$476,826	$179,779	2.65	30
Mississippi	$482,312	$77,851	6.20	51
Missouri	$452,794	$181,391	2.50	21
Montana	$313,103	$166,875	1.88	7
Nebraska	$481,415	$182,775	2.63	29
Nevada	$596,988	$191,925	3.11	38
New Hampshire	$416,748	$255,760	1.63	4
New Jersey	$575,909	$245,517	2.35	18
New Mexico	$419,776	$183,064	2.29	16
New York	$510,113	$151,832	3.36	42
North Carolina	$444,098	$127,510	3.48	44
North Dakota	$440,519	$253,730	1.74	6
Ohio	$468,805	$179,279	2.61	27
Oklahoma	$430,173	$186,561	2.31	17
Oregon	$431,436	$195,799	2.20	14
Pennsylvania	$503,940	$199,291	2.53	23
Rhode Island	$416,341	$128,874	3.23	40
South Carolina	$441,402	$125,998	3.50	45
South Dakota	$472,781	$237,404	1.99	11
Tennessee	$420,657	$143,689	2.93	36
Texas	$535,582	$163,328	3.28	41
Utah	$432,569	$202,011	2.14	13
Vermont	$299,494	$268,086	1.12	1
Virginia	$468,161	$186,298	2.51	22
Washington	$473,003	$347,668	1.36	3
West Virginia	$397,851	$233,997	1.70	5
Wisconsin	$547,132	$226,097	2.42	19
Wyoming	$462,136	$157,407	2.94	37

Source

Survey of Business Owners. Washington, DC: U.S. Department of Commerce, Census Bureau, 2007.