Minority-owned business study provides unique insight
The 2007 SRP Arizona Business Study Focus on Minority-Owned Business provides a glimpse into the background, needs, and wants of Minority-owned businesses in Arizona.
SRP, the ASU Hispanic Research Center and WestGroup Research have worked together over the past three years to provide a resource to those seeking to understand, support and/or serve minority-owned businesses. A total of 1,440 interviews with both minority and non-minority-owned businesses were conducted for this research between March 29 and May 8, 2007. Interviews were conducted primarily with the owner, CEO, and/or president of the company.
View a short video vignette about each of the six featured businesses:
Below are some highlights of the study. You can also view the comprehensive study results (6.8MB) or view study results from previous years.
- Top three reasons minority business owners start their own company:
- Control/be your own boss/be in charge (36%)
- Financial gain (21%)
- Pursue American dream (13%)
- Profile of typical minority business owner:
- Median age of 40 years old when they start the company.
- More men then women, but the percentage of women starting businesses continues to grow faster than those started by men.
- Most speak another language and predominantly speak English at home and work.
- Median household income of over $70,000.
- Most significant "race-related" barriers minority business owners have had to overcome:
- Negative perceptions of being a minority.
- Being treated differently by customers and suppliers.
- Having access to capital (perceived barrier due to race).
- Top ways minority-owned businesses address discrimination issues - the "indirect approach:"
- Work harder (25%)
- Persistence (12%)
- Build a good reputation (11%)
- Most significant business challenges that minority-owned businesses face:
- Finding and retaining qualified employees (considered the most significant challenge).
- Gaining access to capital to invest in the business.
- Knowing how to run a business.
- Helping develop revenue sources through marketing and advertising.
- Positioning the business appears to occur on at least four levels that differ between businesses:
- Actively promoting their minority status.
- Networking/associating with others within their ethnic group.
- Using their minority status for pursuing business opportunities - e.g., supplier diversity programs.
- Becoming more mainstream in the American marketplace and not as strongly associated as a minority-owned business.
- Where to seek advice: When asked who they would want business advice from, one in five chose people who could give them basic advice on running their business. This included positions like a marketing specialist, CPA, or lawyer. It also included more general business consultation (mentioned by one in six owners), such as a franchise expert.
- While most responses given were positions or titles, the individual names mentioned included:
- Bill Gates (7%)
- Donald Trump (7%)
- President Bush (4%)
- Janet Napolitano (4%)
- Oprah Winfrey (4%)
- Profile of Minority-owned businesses*:
- The typical minority-owned business is a sole proprietorship with annual revenues of $201,000. They have four employees and have been in existence approximately nine years.
- Most are family-owned businesses that conduct business primarily in Arizona; however, one-third conduct business nationwide and 16% conduct business internationally.
- Two-thirds of minority-owned businesses spent money on Marketing/Advertising in 2006, spending a median of $5,000.
- On average, minority-owned businesses spent 11% of their budget on advertising in a language other than English.
- About half of minority-owned businesses have web sites.
* Note: An important distinction of minority-owned businesses participating in this research is that virtually all of these organizations have at least one full-time employee. Definitions of what is considered "a business" vary widely between research studies and makes finding directly comparable data challenging.
The study has been endorsed by the following organizations:
- Arizona Department of Commerce
- Arizona Hispanic Chamber of Commerce
- Arizona Minority Business Enterprise Center
- Asian Chamber of Commerce
- Chicanos Por La Causa (CPLC)
- Grand Canyon Minority Supplier Diversity Council
- Greater Phoenix Black Chamber of Commerce
- Greater Phoenix Chamber of Commerce
- Greater Phoenix Economic Council (GPEC)
- National Association of Women Business Owners (NAWBO), Phoenix Metro Chapter
- Tucson Hispanic Chamber of Commerce
- Women's Business Enterprise Council - West (WBEC-West)
- Yuma County Chamber of Commerce
View all of the complete reports, including those from the previous years' studies:
For more information about the 2007 SRP Arizona Business Study Focus on Minority-Owned Business, please send an e-mail to abs@srpnet.com.