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