2002 Survey of Business Owners and Self-Employed Persons (SBO)

Lee R. WentelaU.S. Census Bureau - Company Statistics Division

ALA 2008 Midwinter MeetingPennsylvania Convention Center

Philadelphia, PA, January 14, 2008

2 ALA 2008January 14, 2008

Survey of Business OwnersFormerly the Surveys of Minority-

and Women-Owned Businesses

Part of the Economic Census required by law to be taken every 5 years for years ending in “2” and “7”

Provides data for businesses and business owners by • Gender • Hispanic or Latino origin (May be of any

race) • Race

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Survey of Business Owners(cont.)

Established in 1969 by the same Executive Order that created Dept. of Commerce’s Minority Business Development Agency (MBDA)

Data compiled from several sources• IRS business income tax returns• Other Economic Census reports• Mailout/mailback survey

Conducted on a company or firm basis rather than individual locations of a firm

4 ALA 2008January 14, 2008

Which Businesses Are Included

Includes all nonfarm firms operating during 2002 with receipts of $1,000 or more that filed tax forms as:

• Individual proprietorships• Partnerships• Any type of corporation

5 ALA 2008January 14, 2008

Which Businesses Are Excluded

Excludes firms classified as:

• Crop and animal production• Rail and scheduled air transportation• Postal service• Funds, trusts, and other financial vehicles,

except real estate investment trusts• Religious, grantmaking, civic, professional,

and similar organizations• Private households• Public administration

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Definition of Hispanic or Latino Business Ownership

• Defined as owning 51% or more of the stock or equity in the business.

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Categories of Hispanic or Latino Business Ownership

• Hispanic or Latino origin- Hispanic- Non-Hispanic

• Gender- Male- Female- Equally Male-/Female-Owned

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Categories of Hispanic or Latino Business Ownership (cont.)

• Detailed Hispanic or Latino categories- Mexican, Mexican American, Chicano- Puerto Rican- Cuban- Other Spanish/Hispanic/Latino

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Categories of Other Business Ownership

• Race- White- Black or African American- American Indian or Alaska Native

(AIAN)- Asian- Native Hawaiian or Other Pacific

Islander (NHPI)

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Categories of Other BusinessOwnership (cont.)

• Other- Publicly held and other firms not

classifiable by gender, Hispanic or Latino origin, and race

• For respondent firms only - Veteran- Service-disabled veteran

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Most Significant Changes in2002

• Ethnicity and race questions were modified to meet Office of Management and Budget (OMB) guidelines.

• Allowed an individual business owner to self-identify with more than one racial category.

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Most Significant Changes in2002 (cont.)

• North American Industry Classification System (NAICS) replaced the Standard Industrial Classification (SIC) system used in previous surveys.

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New Owner Characteristics Data Collected in 2002

• Age• Education level• Veteran status• Primary function in the business• Average number of hours worked per week• Whether the business provided the owner’s

primary income source

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New Business CharacteristicsData Collected in 2002

• Year the business was originally established, purchased, or acquired

• Home-based• Family-owned• Franchise• Source(s) of capital used to:

- start/acquire the business- expand/improve the business

• Types of customers• Types of workers

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Publication Levels - Businesses

Summary statistics at the U.S. level and at the State level by 2- and 3-digit NAICS codes on the total number of firms by gender, Hispanic or Latino origin, and race; sales and receipts, employees, and annual payroll

U.S. level data by employment and receipts size of firm

Selected metropolitan areas, counties, and places with 100 or more women- or minority-owned firms

16 ALA 2008January 14, 2008

Publication Levels – Characteristics of Respondent Firms

U.S. level by kind of business, gender, Hispanic or Latino origin, and race

U.S. level by employment and receipts size of firms

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Publication Levels – Characteristics of Owners of Respondent Firms

U.S. level by kind of business, gender, Hispanic or Latino origin, race, and business interest

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SBO Includes Firms With Paid Employees and Firms With No Paid

Employees

2002

All firms(millions)

Sales and receipts

(billion dollars)

Total U.S. firms 23.0 22,604

Employer firms 5.5 21,836

Nonemployer firms 17.4 767

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Growth of U.S. Firms

All firms1 2002 1997Percent change

Number(1,000,000) 23.0 20.8 10.3

Receipts(trillion dollars) 22.6 18.6 21.8

1 Includes firms with paid employees and firms with no paid employees.

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Growth of Hispanic-Owned Firms

All firms1 2002 1997Percent change

Number(1,000) 1,573 1,200 31.1

Receipts(billion dollars) 221.9 186.3 19.1

1 Includes firms with paid employees and firms with no paid employees.

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Percent Change Comparisonfrom 1997 to 2002 by Group1

1 American Indian- and Alaska Native-owned businesses have been excluded due to noncomparability.

* Denotes that the percent change for NHPI-owned firms’ receipts was not statistically significant.

31%

49%

22%

45%

10%

24%24%19%

8%

3%

0%

10%

20%

30%

40%

50%

60%

U.S. Total Hispanic orLatino

Black Asian NHPI*

All firms

Receipts

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Growth of U.S. Employer Firms

Firms with paid employees 2002 1997

Percent change

Number(1,000,000) 5.5 5.3 4.3

Receipts(trillion dollars) 21.8 17.9 21.9

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Growth of Hispanic-OwnedEmployer Firms

Firms with paid employees 2002 1997

Percent change

Number(1,000) 200 212 -5.8

Receipts(billion dollars) 179.5 158.7 13.1

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Percent Change Comparisonfrom 1997 to 2002 by Group1

1 American Indian- and Alaska Native-owned businesses have been excluded due to noncomparability.

* Denotes that the percent changes for Black-owned employer firms and Asian- and NHPI-owned employer firms’ receipts were not statistically significant.

22%22%

1%4%

11%

-6%

17%13%

6%

-6%0%

10%

20%

30%

40%

50%

60%

U.S. Total Hispanic orLatino

Black* Asian* NHPI*

Employer firms

Receipts

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26 ALA 2008January 14, 2008

Growth of Hispanic-OwnedFirms by State

All firms by state1 2002 1997

Percent change

California 427,678 336,405 27.1

Texas 319,340 240,396 32.8

Florida 266,688 193,902 37.5

1 Includes firms with paid employees and firms with no paid employees. Firms with more than one domestic establishment are counted in each geographic area in which they operate, but only once in the state total.

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Combined Statistical Areas (CSAs) With the Largest Number

of Hispanic-Owned Firms: 2002

CSAFirms

(number)1

Los Angeles-Long Beach-Riverside, CA 277,858New York-Newark-Bridgeport, NY-NJ-CT-PA 211,024Houston-Baytown-Huntsville, TX 75,5621 Includes firms with paid employees and firms with no paid employees. Firms with more than one domestic establishment are counted in each geographic area in which they operate, but only once in the U.S. total.

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Counties With the Largest Numberof Hispanic-Owned Firms : 2002

CountyFirms

(number)1

Los Angeles County, CA 188,422

Miami-Dade County, FL 163,187

Harris County, TX 61,934

Bronx County, NY 38,324

Queens County, NY 35,195

1 Includes firms with paid employees and firms with no paid employees. Firms with more than one domestic establishment are counted in each county in which they operate, but only once in the state total.

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Cities With the Largest Number of Hispanic-Owned Firms: 2002

1 Includes firms with paid employees and firms with no paid employees. Firms with more than one domestic establishment are counted in each city in which they operate, but only once in the state total.

CityFirms

(number)1

New York, NY 129,412Los Angeles, CA 84,629

Houston, TX 41,753

Miami, FL 35,887

San Antonio, TX 29,654

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Distribution of Hispanic-Owned Firms by Kind of Business: 2002

Total: 1,573,464

Administrative and

support and waste

management and remediation

services13%

Health care and social

assistance12%

All other kinds of businesses

26%

Other services (except public administration)

16%

Construction14%

Professional, scientific, and

technical services

9%

Retail trade10%

1 Firms with more than one domestic establishment are counted in each industry in which they operated, but only once in the U.S. total.

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Industries Accounting for theLargest Receipts for

Hispanic-Owned Firms: 2002

Kind of businessSales and

receipts(billion dollars)1

Retail trade 40.4Wholesale trade 39.3Construction 31.4Manufacturing 18.0

1 Receipts are for firms with paid employees and firms with no paid employees.

32 ALA 2008January 14, 2008

Industries With the Highest Average Receipts (in $1,000s) Per Firm for

Hispanic-Owned Firms Compared to All U.S. Firms: 2002

460

664

534

1,811

2,669

234

267

488

581

1,151

Accommodation and foodservices

Retail trade

Mining

Manufacturing

Wholesale trade

Hispanic

All U.S. firms, excludingpublicly held and otherunclassifiable firms

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Percent of Home-based Firms by Receipts Size of Firm: 2002

Receipts size of respondent firms

% of Hispanic-owned respondent firms

% of all respondent firms

Less than $5,000 55.6 64.7

$5,000 to $9,999 51.8 62.5

$10,000 to $24,999 46.9 58.7

$25,000 to $49,999 44.4 54.4

$50,000 to $99,999 42.6 49.0

$100,000 to $249,999 33.8 37.4

$250,000 to $499,999 23.8 23.4

$500,000 to $999,999 16.5 14.4

$1,000,000 or more 7.8 5.8

34 ALA 2008January 14, 2008

Percent of Franchised Employer Firmsby Employment Size of Firm: 2002

Employment size of respondent firms

% of Hispanic-owned respondent firms

% of all respondent firms

No employees1 3.3 3.1

1 to 4 employees 2.1 2.0

5 to 9 employees 3.3 4.0

10 to 19 employees 4.7 5.8

20 to 49 employees 7.6 8.7

50 to 99 employees 5.5 8.8

100 to 499 employees 9.0 7.7

500 employees or more 6.4 3.7

1 Includes firms with payroll at any time during 2002.

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Sources of Start-Up Capital: 2002

Sources ofstart-up capital

% of Hispanic-owned respondent firms

% of all respondent firms

Personal/family savings 51.2 54.6

Other personal/family assets 6.7 9.0

Personal/business credit card9.4 8.8

Business loan from govt. 0.8 0.9

Govt.-guaranteed bank loan 0.4 0.7

Business loan from bank 5.6 11.4

Outside investor 1.8 2.7

None needed 33.1 27.7

Item not reported 5.1 3.9

36 ALA 2008January 14, 2008

All U.S. Firms by DetailedHispanic or Latino Origin: 2002

Detailed Hispanic or Latino origin Firms1

(thousands)

Sales and receipts

(billion dollars)

Mexican, Mexican American, Chicano 701 96.7

Puerto Rican 109 12.3

Cuban 152 35.4

Other Spanish/Hispanic/Latino 596 74.21 Includes firms with paid employees and firms with no paid employees.

37 ALA 2008January 14, 2008

Changes for 2007

One comprehensive 2007 SBO form accommodating up to four owners

Nineteen new questions “Some other race” added to race categories Opportunity provided to report online

38 ALA 2008January 14, 2008

Changes for 2007 (cont.)

Protective noise for disclosure avoidance Estimates for equally Hispanic-/Not Hispanic-

owned firms (50% / 50% ownership) are tabulated separately

More Veteran-owned data More timely data releases

39 ALA 2008January 14, 2008

Tentative 2007 SBO Calendar

Phase I Mailout June 2008• 1.2 million employers • 3 mail report form follow-ups

Phase II Mailout May 2009• 1.2 million nonemployers and new employers• 2 mail report form follow-ups

40 ALA 2008January 14, 2008

2007 SBO Results Released on a flow basis from 2010 to 2011

• Press events

• SBO Web site: www.census.gov/csd/sbo

• For access to prepackaged data products and the ability to build custom tables, visit American FactFinder (AFF), the Census Bureau’s online, self-service data access tool at www.factfinder.census.gov

41 ALA 2008January 14, 2008

Contact InformationLee Wentela Chief, Economic Census BranchPhone: 301.763.7270Email: Lee.R.Wentela@census.gov

Katherine RussellProject Manager, Survey of Business OwnersPhone: 301.763.3316Toll-free number: 888.225.4022Email: Katherine.Russell@census.gov