Minority women-owned businesses on the rise.

Businesses owned by women of color growing in number at rates exceeding all women-owned firms and the national average, according to a new report from Center for Women's Business Research (founded as the National Foundation for Women Business Owners). The Center projects that as of 2002, there will be an estimated 1.2 million businesses owned by women of color in the U.S., employing more than 822,000 people and generating $100.6 billion in sales. Between 1997 and 2002, the Center estimates that the number of privately-held, majority-owned minority women-owned firms will have grown by 31.5%, compared to 14.3% among all women-owned firms, 29.7% among all minority-owned firms, and 6.8% among all U.S. firms.

Sponsored by Kauffman Center for Entrepreneurial Leadership, the Center's report, "Minority Women-Owned Businesses in the United States, 2002" analyzes data published by the U.S. Bureau of the Census and presents the most up-to-date information currently available on majority-owned, privately-held firms owned by women of color in the United States.

"Women of color continue to start businesses at a faster rate than other women and all businesses," said Nina McLemore, Chair of Center for Women's Business Research and President of Regent Capital. "The number of minority women-owned firms increased 31.5% between 1997 and 2002, more than twice as fast as all women-owned firms, and more than four times the national average. Further, based on recent growth rates, in 2002 there will be 14,116 minority women-owned firms with revenues of $1 million or more, and 111 with 100 or more employees."

As of 2002, the Center estimates that there are 470,344 Hispanic women-owned firms, 365,110 African American women-owned firms, 358,503 firms owned by women of Asian or Pacific Islander heritage, and 77,483 firms owned by women of Native American or Alaska Native heritage. Between 1997 and 2002, the number of these firms will have grown by 39.3%, 16.7%, 44.6%, and 44.6%, respectively.

"There has been growth in women's entrepreneurship among every major ethnic group," said Jasmin Rodriguez, Manager of Women's Initiatives for Kauffman Center. "This is a positive sign, not only for these women business owners but for the United States as a whole. Through our research we've learned that greater participation in entrepreneurship among people from a variety of backgrounds can play an important role in facilitating economic growth."

Businesses owned by women of color represent nearly one-third of all of the firms owned by persons of color, according to the report. In comparison, all majority-owned, privately held women-owned firms comprise 28% of all U.S. businesses. Businesses owned by women of color now represent 20% of all women-owned firms, meaning that one in five women-owned firms is owned by a woman or women of color.

More than one-half of minority women-owned firms (58%) are in the service sector, which also had the greatest growth (33% between 1997 and 2002). Other industries with the greatest growth were transportation/communications/public utilities (21%) and agriculture (7%).

The 10 states with the greatest number of minority women-owned firms in 2002 are: 1) California; 2) New York; 3) Texas; 4) Florida; 5) Illinois; 6) Georgia; 7) Maryland; 8) New Jersey; 9) Virginia; and 10) North Carolina.

The 10 states with the fastest growth in the number of minority women-owned firms from 1997 to 2002 are: 1) Montana 2) North Dakota; 3) Maine; 4) Oklahoma; 5) South Dakota; 6) Vermont; 7) West Virginia; B) Idaho; 9) New Hampshire; and 10) Alaska.

The 10 states where minority women-owned firms comprise the greatest share of all women-owned firms are: 1) Hawaii (60%); 2) District of Columbia (40%); 3) California (35%); 4) New Mexico and New York (tied - 32%); 6) Texas (29%); 7) Maryland and Florida (tied - 28%); 9) Alaska, Georgia and Oklahoma (tied - 24%).

"Due to a more restrictive definition of a woman-owned business in the most recent Census and to the limitations that caused when comparing data from previous years, we know that our estimates are conservative," said McLemore. "Thus, we know that actual growth rates and estimates for sales and employment are higher than reported (18.8% and 5.7%, respectively). Since the Census Bureau is only counting privately-held, majority-owned firms, and is no longer counting women who own 50% of a business as it did in the past, the data were not directly comparable to data gathered previously. Nonetheless, despite these limitations, we are pleased to see continued growth in the number of women of color in business and growth in their economic contributions as well. These trends will likely continue at solid rates into the future."

Stephanie Peacock is with the Center for Women's Business Research. The report, "Minority Women-Owned Businesses in the United States, 2002," is available for $130. (Discounts are available for Center corporate partners and NAWBO members.) Individual minority group reports, and an overall summary report, are available free of charge on the Center's Web site at http://www.womensbusinessresearch.org/MinorityReports.html