Georgia today: the status of black-owned business enterprises, a special economic report [June 1986]

8 Georgia Today
The Status of Black-Owned Business Enterprises
A Special Economic Report

Published in cooperation with The Governor's Small and Minority Business Advisory Council,
The Interagency Council on Small and Minority Business and
The Community and Economic Development Division of
The Department of Community Affairs

Georgia Today
The Status of Black-Owned Business Enterprises
A Special Economic Report
Georgia Department of Community Affairs
Jim Higdon, Commissioner
Government Information Division
40 Marietta Street, N.W. Atlanta, Georgia 30303
June, 1986
An Equal Opportunity Employer

A Note on Data Sources: This report is based primarily on data obtained from the 1982 Survey of Minority-Owned Business Enterprises, prepared by the U.S. Department of Commerce, Bureau of the Census. In the Survey, "firm" is defined as a legal entity engaged in economic activity, which filed an Internal Revenue Service Form 1040, Schedule C; 1065; 1120; or 1120S. A firm contrasts with an establishment, which is a single physical location at which business is conducted. Most of the other economic censuses are conducted on an establishment, rather than a firm, basis. The second source of information for this report is the January, 1986, issue of the County Compass, a newsletter published monthly by the National Organization of Black County Officials (NOBCO).
.;-;."

TABLE OF CONTENTS

Growth in Black-Owned

Business Enterprises, 1977-1982

2

Black-Owned Firms as a Percentage

of all Firms

4

Distribution of Black-Owned Firms

by Sector

5

Distribution of Black-Owned Firms

by County

6

In Summary

7

Appendix: Statistics by Industry Division for

Georgia Counties with 250 or More

Black-Owned Firms, 1982

8

GROWTH IN BLACK-OWNED BUSINESS ENTERPRISES, 1977 TO 1982

Between 1977 and 1982, the number of black-owned business enterprises in Georgia grew by 51 percent, outpacing the nationwide growth rate of 47 percent. Close to 15,000 blackowned business firms were located in Georgia in 1982, compared to 9,700 in 1977.
Percentage Growth

Up47% USA

Up 51% Georgia

The majority of these firms were sole proprietorships: firms with no paid employees other than the entrepreneur/owner.' In 1982, firms with no paid employees accounted for 86 percent of all black-owned firms, compared to 80 percent in 1977.

Growth In Georgia

e

9,716 Firms

rr

-II

14,652 Firms

1977

1982

Sole Proprietorships Compared to Firms with Paid Employees

20%

80% 1977

Firms with
No Paid Employees

86%
I"

1982

'Employment includes all employees, full-time and part-time, reported on a firm's payroll during specified pay periods in the years in which the surveys took place. Persons on paid sick leave, paid holidays. and paid vacations are included as employees, as are salaried officers and executives of corporations. However, proprietors and partners of unincorporated businesses are not considered as employees.
2

Different Growth Rates Up 63%

Total sales and receipts of Georgia black-owned firms increased 65 percent between 1977 and 1982. Nationwide, receipts of black-owned firms were up 44 percent over the same five year period.2
Number of Employees

Firms with No Paid Employees
itHit tMtt6

"Hit .~

Up2%
o

Percentage Growth In Receipts Up65%
Up 44%

Firms with Paid Employees

Firms with no paid employees grew at a rate of 63 percent

between 1977 and 1982, compared to a growth rate of only 3

percent for firms with paid employees. Parallel to the slower

growth of firms with employees, the number of employees of

black-owned firms in Georgia increased by only 2 percent in the

USA

same time period.

2Not adjusted for inflation

Georgia
3

Summary Statistics for Black-Owned Businesses State of Georgia, 1977 and 1982

Number of Firms Sales and Receipts (000S)3 Number of Firms with Paid Employees Number of Employees Number of Firms with no paid Employees

1982 14,652
$ 612,776
2,023 8,969 12,629

3Not adjusted for inflation.
BLACK-OWNED FIRMS AS A PERCENTAGE OF ALL FIRMS
What is the extent of black ownership of business firms in Georgia, compared to the total number of firms?
Unfortunately, it is not possible to measure the number of black-owned firms compared to all firms, because the comparable data on all firms originates from the Internal Revenue Service, which cannot release state totals because of confidentiality restrictions placed on the data. However, it is possible to make comparisons on a nationwide basis.
Nationwide, black-owned firms accounted for 2.3 percent of all firms in 1982, up from 1.6 percent in 1977 and 1.4 percent in 1972. While the numbers of black-owned firms increased, however, their total gross receipts, as a percentage of the total gross receipts of all firms, remained at a constant .2 percent for 1972, 1977, and 1982.
4

1977 9,716
$ 372,476
1,965 7,533 7,751

Percent Change
51% 65%
3% 2% 63%

DISTRIBUTION OF BLACK-OWNED FIRMS BY SECTOR
The number one type of black-owned business in Georgia and the nation was the service-oriented firm.
In Georgia, service businesses accounted for 42 percent of all black-owned enterprises in 1982. Retail trade firms were second, accounting for 25 percent. Construction firms were a distant third, accounting for 9 percent of black-owned businesses in 1982. Manufacturing, wholesale trade and agricultural firms were not well-represented.
Nationwide, a similar pattern existed. Services accounted for43 percent of all black-owned firms; retail trade was second with 25 percent; and construction was a distant third, with 8 percent.

Georgia
USA

Number of Firms
Percent of Total
Percent of Total

Service.
iI

Retail Trade
[I]

6,166

3,658

42%

25%

43%

25%

Distribution by Sector

Con.tructlon
[[]

Flnanc.,
Inluranc.,
Real E.tate
[2S]

Tran.portatlon Communication, and other Public UlIIltle.

Agricultural Service., Fora.try, FI.herle.

~~

1,298

792

701

307

9%

5%

5%

2%

7%

4%

7%

1%

Manufacturing
~

Whola. . le Trade
[I

232

158

2%

1%

1%

1%

I

5

Percentage of All Black-Owned Firms, by County, 1982

36% All Other Counties

Cobb County
Dougherty County

Bibb County

Muscogee County

6

DISTRIBUTION OF BLACK-OWNED FIRMS BY COUNTY
Eight Georgia counties counted more than 250 black-owned businesses within their boundaries in 1982. Each of these eight counties are in one otthe state's metropolitan areas. Close to 45 percent of all black-owned firms in the state were located in the Atlanta metropolitan a~ea, in Fulton, DeKalb and Cobb counties.
Fulton County ranked first in the state in number of blackowned firms in 1982, accounting for 4,200, or 30 percent. DeKalb County ranked second, with close to 2,000 firms; Chatham County ranked third, with a far-distant 6 percent.
An additional 5,000 black-owned firms, 36 percent of the state's total, were located in Georgia's 151 other counties.
Top Counties for Numbers of Black-Owned
Firms, by County, 1982
e

Fulton County:
4,224

i
DeKalb County:
1,993

i
Chatham County:
830

Black-Owned Firms Increasing Faster In Georgia
Up 51%: Georgia Up 47%: USA

1977
Slow Growth of
Firms with Employees

1982 Up3%

1977

1982

Services, Retail Trade pre:mlnate
#1 S'Ni,., _ , . , .


~

b -y .u. 1 R"." #2

T"d.

The APPENDIX contains a detailed breakdown of total number of firms, sales and receipts, and number of firms with paid employees, by industry division, for each of the eight counties for which data are available. The pattern of heavy representation in services and retail trade is similar in each of the eight counties.
Sole Proprietorships Predominate

86%
Firms with No Paid Employees

Fi rms with Paid Employees

IN SUMMARY
The total number of black-owned firms in Georgia is increasing at a faster pace than nationwide.
However, the number of firms with paid employees and total number of employees are increasing at a slow rate.
Firms with no paid employees (sole proprietorships) make up the largest share of black enterprises.
Selected services and retail trade are the most common type of black enterprise.
7

APPENDIX
Statistics by Industry Division for Georgia Counties with 250 or More Black-Owned Firms, 1982
ALL FIRMS

BIBB COUNTY Agricultural Services Construction Manufacturing Transportation/Public Utilities Wholesale Trade Retail Trade Finance, Insurance and Real Estate Selected Services
TOTAL:

Number of
Firms
5 42
4 11
2 126
16
-18-1
423

Sales and Receipts
(OOOs)
$ 231 $ 1,383 N/A $ 1,214 N/A $ 3,209 $ 371 $ 3,434
$10,536

CHATHAM COUNTY Agricultural Services Construction Manufacturing Transportation/Public Utilities Wholesale Trade Retail Trade Finance, Insurance and Real Estate Selected Services
TOTAL:

21

N/A

83

$ 2,122

6

N/A

39

$ 721

10

$ 117

174

$ 8,537

38

$ 2,432

358

N/A

830

$40,206

8

Firms With Paid Employees
2 10
2 3
21 2
36
82
4 19
4 1 1 36 4
-5-2
125

APPENDIX (Continued)

ALL FIRMS

COBB COUNTY Agricultural Services Construction Manufacturing Transportation/Public Utilities Wholesale Trade Retail Trade Finance, Insurance and Real Estate Selected Services
TOTAL:

Number of
Firms
4 26
3 6 5 63 16 118
261

Sales and Receipts
(OOOs)
$ 45
$ 1,580 $ 292 $ 236 $ 120 $ 2,376 $ 144 $ 1,979
$ 6,923

DEKALB COUNTY Agricultural Services Construction Manufacturing Transportation/Public Utilities Wholesale Trade Retail Trade Finance, Insurance and Real Estate Selected Services
TOTAL:

20 167
10 90 25 504 184 828
1,993

$ 284 $ 4,749 $ 162 $ 3,403 $ 623 $12,668 $ 1,340 $13,867
$40,140

Firms With Paid Employees
1 5 1
1 7 2 14 32
20
10 3
29 4
96 167

9

DOUGHERTY COUNTY Agricultural Services Construction Manufacturing Transportation/Public Utilities Wholesale Trade Retail Trade Finance, Insurance and Real Estate Selected Services
TOTAL:
FULTON COUNTY Agricultural Services Construction Manufacturi ng Transportation/Public Utilities Wholesale Trade Retail Trade Finance, Insurance and Real Estate Selected Services
TOTAL:

APPENDIX (Continued)

ALL FIRMS

Number of
Firms
5 42
3 17
6 126
17 166
420

Sales and Receipts
(ODDs)
$ 104 N/A N/A $ 1,304 N/A $ 6,090 $ 79 $ 3,023
$13,329

32 242
29 205
57 1,028
304 1,978
4,224

N/A $ 7,389 N/A $ 4,878 $ 13,609 $ 70,634 $ 66,723 $ 41,440
$251,057

Firms With Paid Employees
7 1 2 3 23 1
-3-4
74
5 36
8 10 10 149 17 264
508

10

MUSCOGEE COUNTY Agricultural Services Construction Manufacturing Transportation/Public Utilities Wholesale Trade Retail Trade Finance, Insurance and Real Estate Selected Services
TOTAL:
RICHMOND COUNTY Agricultural Services Construction Man ufactu ri ng Transportation/Public Utilities Wholesale Trade Retail Trade Finance, Insurance and Real Estate Selected Services
TOTAL:

APPENDIX (Continued)

ALL FIRMS

Number of
Firms
8 44
3 23
4 169
54 268
618

Sales and Receipts
(OOOs)
$ 56 $ 1,483 N/A $ 1,430 N/A $ 8,214 $ 375 $ 3,735
$16,151

6

$ 21

40

$ 913

4

N/A

25

N/A

6

N/A

181

$ 6,123

38

N/A

-277

$ 4,496

641

$23,254

Firms With Paid Employees
16
6
38 1
39 102
9
2 2 25 1 33 76

11