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TABLE OF CONTENTS Introduction ..................................................................................................................... 3 Objectives ....................................................................................................................... 3 Methodology.................................................................................................................... 3 Executive Summary ........................................................................................................ 4 The United States Of Minority Business .......................................................................... 5 Tennessee: In Need Of MBEs ......................................................................................... 6 The Business Climate In Shelby County ......................................................................... 7 City Of Memphis: A Pilot Study For Future Minority Businesses? ................................... 8 The Business Case For Developing Employer Firms In Memphis .................................. 9 The MMBC Continuum .................................................................................................. 11 Who We Are ..........................................................................................................................11 What We Do ..........................................................................................................................11 Appendix ....................................................................................................................... 12 Endnotes ....................................................................................................................... 15 Contact Information ....................................................................................................... 16 Report by The MMBC Research and Data Dept – Alicia Rossi Carney Cover design by Vescent Design Copyright © July 2016 by The MMBC Continuum. All rights reserved. 2016 STATE OF MINORITY BUSINESS INTRODUCTION In the increasingly near future, the United States will cease to be a majority Caucasian population – instead transitioning to a “minority-majority” population where African Americans, Hispanics/Latinos, and Asians will be the leading demographic. If current metropolitan areas, such as Memphis, TN, are any indicator of what the future looks like, then the United States is slowly creeping towards rampant economic disparity. The present data supplied by the Census Bureau Survey of Business Owners (SBO) shows that over time, an increasing amount of the ethnic population in the United States is choosing to start a business. By directing these diverse business owners into industry segments that allow for growth, we are avoiding future economic instability of far-reaching proportions. OBJECTIVES The main objectives of this report are to forecast the future minority business landscape by:  Analyzing the data from the US Census Bureau Survey of Business Owners to identify trends in minority businesses, specifically: o How different types of businesses (employer vs. non-employer) are performing; o How different race/ethnic groups are performing in terms of average receipts and number of businesses;  Evaluating the effects of the 2008 Recession on minority businesses;  Identifying solutions to problematic findings presented by the data. METHODOLOGY For the primary components of this report, The MMBC Continuum used data from the 2002, 2007, and 2012 Census Bureau Survey of Business Owners (SBO) to conduct a comparative analysis. In the 2002 SBO data set, The MMBC Continuum calculated the amounts for both number of businesses and average revenue of non-employer firms using the existing data provided. The average revenues for all firm types in the 2007 and 2012 SBO datasets were also derived using the same methodology. The Census Bureau expanded the ethnic categories of data collected starting in 2007; therefore, there is no collective “Minority” and “Nonminority” data available in the 2002 SBO. Copyright © July 2016 by The MMBC Continuum. All rights reserved. 3 2016 STATE OF MINORITY BUSINESS EXECUTIVE SUMMARY Without intervention, it is likely that the number of minority non-employer firms in operation will continue to increase and outpace the number of minority employer firms in operation, and that non-employer revenues will continue to fall at an alarming pace. During the most recent recession, many employers in Memphis either laid off or permanently discharged employees. In an effort to regain employment quickly, these individuals turned to self-employment in traditional industries with low barriers to entry such as catering, janitorial work, or landscaping as a means of providing for themselves and their families. With countless traditional firms operating in Memphis and not enough demand for their goods or services, sole-proprietorships are accepting whatever wages they are offered in an effort to stay competitive and employed. Of all minorities, it is highly likely that African-American business owners will continue to open non-employer firms in traditional industry segments, resulting in a severe decline in annual revenues. Non-employer businesses, while important and necessary to the livelihood of those who run them, have little to no impact on economic development and are not a sustainable source of job growth. The data reveals some surprising and disappointing results about the economic climate in Memphis. Seventy-two percent of people in Memphis are of an ethnicity other than Caucasian, with 63% of those people being of African American descent. However, minority-owned firms in Memphis only earn less than three percent of the overall revenue generated by the community. When comparing the data from the 2012 and 2007 Census Bureau Survey of Business Owners, even though minority-owned firms in Memphis significantly grew in number, minority nonemployer firms lost an average of 27% in revenue compared to minority employer firms, who gained an average of 48% in revenue. Of all minority-owned firms, African-American nonemployer firms lost the most ground, declining an average of 25% in revenue from 2007 to 2012, despite the number of businesses growing by almost 20,000 firms. Fostering the growth of scalable employer firms, especially in the African American community, will lead to an increase of jobs and revenue locally in Memphis. Copyright © July 2016 by The MMBC Continuum. All rights reserved. 4 2016 STATE OF MINORITY BUSINESS THE UNITED STATES OF MINORITY BUSINESS The ethnic diversity of the United States’ (US) economy is changing at an accelerated pace. According to the Census Bureau 2012 Survey of Business Owners (SBO), minority-owned business enterprises (MBEs) currently make up about 29% of all businesses in the United States. Majority (Non-Hispanic White) persons own “Assuming that the number about 69% of business enterprises. Between 2007 of firms owned by both and 2012, minority firms increased in number by minority and majority 38%, while majority firms decreased about 5.5% in number. Assuming that the number of firms persons holds steady, by the owned by both minority and majority persons 2027 SBO sampling, holds steady, by the 2027 SBO sampling, minorityminority-owned firms could owned firms could make up an approximate 55% of all firms in the US, with approximately 44% of make up an approximate 55% businesses owned by majority firms. Minorityof all firms in the US …” owned businesses have continually grown in number since 2007, with over 2,193,177 businesses opening; however, average revenues have declined 2.5% during the same period. Additionally, the national data shows that although minority employer firms increased in number at about half the rate of minority non-employer firms, the employer firms had an increase in revenue of about 13.8% while non-employer firms lost about 5.6% in revenues. Of all minority-owned firms, African-American firms were the only major ethnic group to suffer an overall loss of 21.5% in revenues since 2002. African-American nonemployer firms fared the worst of all groups, losing an overall 8.8% in revenue. 2012 Business Revenue Comparison Hispanic firms experienced a median amount of growth, with the average number of firms almost doubling per survey cycle, and revenues steadily increasing, with the exception of non-employer firms losing an average of $4,146 from 2007 – 2012. Source: 2012 Census Bureau Survey of Business Owners Asian firms experienced no effects of the recent recession, and have continually grown in both number of firms and average revenues over the past decade. Asian employer firms have impressive average revenues of about $1.3 million and non-employer firms earn an average of almost $50,000 a year. Copyright © July 2016 by The MMBC Continuum. All rights reserved. 5 2016 STATE OF MINORITY BUSINESS TENNESSEE: IN NEED OF MBES As of the 2012 SBO, minority-owned firms earned only 2.25% of all revenue generated by business entities operating in Tennessee, leaving 97.75% of revenues controlled by majority business owners. The average annual revenue for a diverse firm was $138,213; conversely, the average for a majority firm was $475,607. Such a disparity in revenues is especially disappointing because over 25% of the population in Tennessee is of diverse descent1. “Of all minority-owned firms, African-American NonEmployer firms lost the most ground, declining an average of 25% in revenue from 2007 to 2012, despite the number of businesses growing by almost 28,000 firms.” When comparing data from the 2007 and 2012 SBO, even though all minority-owned firms in Tennessee significantly grew in number, minority non-employer firms lost an average of 13.6% in revenue. Conversely, scalable minority employer firms in Tennessee experienced a larger growth in annual income than the national average. MBEs in Tennessee earned about $300,000 more (a 31% increase) in 2012 than in 2007 – compared with the 14% increase in revenues experienced by the average minorityowned employer firm in the US. State of TN Revenue Comparison by Race/Ethnicity Copyright © July 2016 by The MMBC Continuum. All rights reserved. Of all minority-owned firms, African-American non-employer firms lost the most ground, declining an average of 25% in revenue from 2007 to 2012, despite the number of businesses growing by almost 28,000 firms. African-American non-employer firms continue to fall behind in average annual revenues, earning an average income of $16,813, compared to Hispanic firms, which earned an average of $44,959, and Asian firms, which earned an average of $57,651 in 2012. 6 2016 STATE OF MINORITY BUSINESS THE BUSINESS CLIMATE IN SHELBY COUNTY In keeping with state and national trends, SBO data from 2007 – 2012 shows that all minorityowned businesses are increasing in number at an accelerated pace, but the average receipts for MBEs in Shelby County have declined 16% from $88,498 in 2007 to $72,994 in 2012. In comparison, national minority business data indicates an average growth in revenue of 10% while average revenues in Tennessee improved 16%. Minority-owned non-employer firms continue to fall behind the national data as well. Minority non-employer firms are losing ground nationally; however, non-employer firms in Shelby County earn more than one and a half times less revenue than national minority non-employer firms. African-American firms have continued to struggle with revenues over the past decade. In 2002 the average African-American owned firm in Shelby County had about $59,055 in receipts – now that same firm can expect to earn an average of $27,190 annually (a decrease of 54%). African-American non-employer firms 2012 Shelby County Employer lost about 36% of Firm Performance by revenues since Race/Ethnicity 2002, earning an average annual income of $14,694. Even employer firms, while more successful than non-employer firms, are continuing to gross average revenues of less than $1 million. Hispanic-owned Source: Census Bureau Survey of Business Owners firms continued to stay within the median range of the data. While the typical firm lost about 30% in revenues during the survey period, the usual business could still expect to make about $151,374 a year. Hispanic non-employer firms experienced the most traumatic shift, increasing revenues from 2002 to 2007 by 123.4%, only to have them decline again to about $33,769 in 2012. Asian firms continually have the best business performance of all minorities, despite a loss of about 55 employer firms in the Shelby County area around 2007, but more than doubling that amount to 1,002 firms at the time of the 2012 SBO. Copyright © July 2016 by The MMBC Continuum. All rights reserved. 7 2016 STATE OF MINORITY BUSINESS CITY OF MEMPHIS: A PILOT STUDY FOR FUTURE MINORITY BUSINESSES? Keeping in mind that the population of Memphis is a “majority-minority” population where 72.5% of the population is of minority descent,2 the City of Memphis data was the most disconcerting. In 2012, the typical minority firm had average receipts of $72,889 (down about $8,000 from 2007); however, the average minority business in Tennessee could expect to earn about $155,143 annually. In fact, minority-owned businesses in Tennessee were making about $21,500 more in 2012 than in 2007, when their average receipts were $133,705. Even more disappointing is that the average minority firm in the US can expect to gross almost $200,000 a year. “In short, the majority of Memphis’ population, which is predominately African American, is operating a sole proprietorship earning just $13,183 a year when the US poverty threshold for a family of four is $24,250.” The trend continued with minority non-employer firms, who grossed an average of $15,382 – earnings that are 17% less than Shelby County average receipts, 41% less than the Tennessee average, and 51% less than the national average. Scalable minority employer firms, on the contrary, made a much more positive impact on the Memphis African American Firm Trends in Memphis economy. The data showed that minority-owned businesses in Memphis competed about on par with minority firms in Tennessee, earned about $100,000 more than minority firms in other parts of Shelby County, and earned almost $150,000 more than the typical minority firm in the US. African-American firms were hit especially hard by the recession, losing about 55.8% in revenues from 2002-2012. While scalable Source: Census Bureau Survey of Business Owners employer firms actually had a net gain of 18.6% in revenues, non-employer firms lost the most revenue, earning just $13,183 – down from $22,074 in 2002 (a 40.3% loss). In Memphis, just 798 African-American owned firms are scalable employer firms, leaving the remaining 39,066 firms (98%) operated by sole proprietors. With 63.3% percent of the population of Memphis being of African American descent, and 56.2% of all firms in Memphis operated by African Americans, that leaves just 7.1% of African Americans who are employed by someone other than themselves. In short, the majority of Memphis’ population, which is predominately African American, is operating a sole proprietorship earning just $13,183 a year when the US poverty threshold for a family of four is $24,250.3 Copyright © July 2016 by The MMBC Continuum. All rights reserved. 8 2016 STATE OF MINORITY BUSINESS THE BUSINESS CASE FOR DEVELOPING EMPLOYER FIRMS IN MEMPHIS In analyzing data from the 2007 – 2012 SBO, one glaring trend became apparent: overall, minority non-employer firms are not growing their revenues year-to-year, and the market is flooded with an abundance of them. In the after effects of the 2007 recession, unemployment rose to a height of 10.5% in 2011 in Memphis, driven by an average unemployment rate of 15.2% in the African American Community.4 With so many people out of work, it is likely that many looked to starting businesses in industries with low barriers to entry, such as landscaping, catering, or janitorial services. “Numerous studies show that As a result, Memphis experienced about a minority firms are more likely to 99% growth in minority non-employer firms, and a 104% growth in African-American nonhire diverse employees, a practice employer firms. As sole proprietorships that is often more effective at began to fill the service industry and turned it reducing unemployment rates in into a “red ocean”, supply exceeded demand to the point where business owners were minority communities than likely taking any wage amount offered in an overall economic and effort to stay in business. The data supports employment growth initiatives.” this, as minority non-employer firm revenues dropped 27% and African-American nonemployer revenues declined 25%. In 2012, a minority non-employer firm could expect to earn $15, 382 in annual revenues, while an AfricanAmerican non-employer firm could expect to earn $13,183. In comparison, scalable minority employer firms experienced growth even in a post-2008 recession atmosphere. The number of scalable minority employer firms grew by 336 businesses, and average revenues increased by 48% to City of Memphis Revenue Comparison by Race/Ethnicity $1,508,219 – higher than the national average of $1,456,084. While AfricanAmerican firms lost 23% of revenues following the recession, they were still making a net of 18.6% more in receipts than in 2002. Despite the growth of existing minority employer Source: Census Bureau Survey of Business Owners firms, Memphis needs more scalable employer firms to further economic development progress. The survival of Memphis’ economy is dependent on developing scalable employer firms, because a population that is 73% minority with 63% of African American descent5 cannot sustain itself on less than 3% of all revenues generated within the city. Copyright © July 2016 by The MMBC Continuum. All rights reserved. 9 2016 STATE OF MINORITY BUSINESS Memphis’ main source of revenue comes from its many corporate entities in the city and surrounding areas. As a supplier to the corporate entities, there are many opportunities for contract awards as a steady source of revenue. The survival of Memphis’ economy is dependent on developing employer firms, because a population that is 73% minority … cannot sustain itself on less than 3% of all revenues generated within the city. According to a 2011 survey of 200 companies conducted by the Center for an Urban Future, employer firms who become suppliers to large corporations experience higher revenues and hire more employees. About 63% of suppliers to corporations have average revenues of over $500,000, and firms experience an average of 266% in revenue growth 1-2 years after becoming a corporate supplier. Corporate suppliers are more likely to hire new employees as well. Over 70% of survey respondents increased their employment after becoming a supplier, with 37% doubling their employment.6 Minority employer firms are also a sustainable source of job growth for the community. Numerous studies show that minority firms are more likely to hire diverse employees, a practice that is often more effective at reducing unemployment rates in minority communities than overall economic and employment growth initiatives.7 With current average unemployment rates hovering at 6.3% as of 30 November 20158, and an annual average unemployment rate for African Americans of 13.2%9, Memphis would benefit greatly from a different, targeted approach to economic development. Copyright © July 2016 by The MMBC Continuum. All rights reserved. 10 2016 STATE OF MINORITY BUSINESS THE MMBC CONTINUUM WHO WE ARE The MMBC Continuum is a strategic business and economic accelerator in Memphis, TN that operates programs based on statistical data to address the challenges of growing diverse business enterprises in the business-to-business space. We specialize in certifying, advising, and connecting Minority and Women-owned Business Enterprises (M/WBEs) that provide unique products and services with corporations challenged to procure goods/services in nontraditional segments. The MMBC Continuum continually advocates for business expansion and job creation, and an integral part of our strategy is to unite our members through joint ventures and encourage them to explore other industries where supply is low but corporate demand is high. In 2012, the Minority Business Development Agency (MBDA), as part of the US Department of Commerce, awarded The MMBC Continuum the distinction of operating an MBDA Business Center. Our business center is part of a network of 44 centers across the nation tasked with scaling MBEs into businesses that generate over $100 million in annual revenue. We are dedicated to providing our MBEs with high-level business consulting services to help them secure competitive contracts, create jobs, and expand regionally, nationally, and internationally. WHAT WE DO Along with collecting and analyzing M/WBE data, researching industry trends, and constantly monitoring the macroeconomic environment, we have formed invaluable relationships with high-level executives at our member corporations. Corporations such as FedEx, AutoZone, and International Paper work with us to clarify RFP requirements and provide us with gaps in their supply chain, allowing us to aid them in sourcing scalable M/WBEs to fill their non-traditional procurement needs. In addition, we recently launched the Corporate Efficiency Directory (CED), allowing corporate purchasing managers to source capable M/WBEs at their convenience. As part of our new Scalability 2.0 initiative, we provide business-consulting services using the latest industry data and feedback from our corporate members to redirect M/WBEs in traditional segments (i.e. Landscaping, Janitorial, or Catering) into non-traditional or emerging growth industry segments based on corporate procurement needs. The MMBC Continuum also encourages established traditional firms to form strategic, joint venture partnerships with firms in complementary industry segments. Joint Venture entities are able to quickly expand capacity, revenues, and compete competitively for larger contracts. In order to continue aiding the non-employer firms in our membership, we currently provide access to the Business Resource Gateway (BRG) – a virtual business advising service that guides business owners through the business life cycle and provides them ample training resources, articles, and videos for each stage of business growth. Our greatest accomplishment, however, is that we provide elite consulting services while continuing to operate as a 501(c)(6). Copyright © July 2016 by The MMBC Continuum. All rights reserved. 11 2016 STATE OF MINORITY BUSINESS APPENDIX US, TN, and Memphis City Employer vs Non-Employer Business Data Minority NonEmployer Firms Avg. Rev Majority Employer Firms $1,277,983 7,043,587 $1,122,577 4,992,676 * * 13.8% 41.1% $31,052 $32,910 * -5.6% 4,156,683 $2,337,043 14,831,235 4,337,535 $2,089,363 15,763,391 * * * -4.2% 11.9% -5.9% 8,808 6,982 * 26.2% $1,371,943 $1,047,285 * 31.0% 96,426 61,236 * 57.5% $25,518 $29,541 * -13.6% 72,131 78,288 * -7.9% $2,604,340 $2,244,279 * 16.0% 361,894 380,807 * -5.0% $51,318 $46,800 * 9.7% $73,579 $87,526 * -15.9% 2,080 1,627 * 27.8% $1,403,143 $1,084,604 * 29.4% 50,216 26,133 * 92.2% $18,505 $25,449 * -27.3% 9,493 10,563 * -10.1% $3,952,961 $2,777,253 * 42.3% 31,076 34,415 * -9.7% $57,264 $50,619 * 13.1% $72,889 $80,899 * -9.9% 1,693 1,357 * 24.8% $1,508,219 $1,018,996 * 48.0% 42,256 21,240 * 98.9% $15,382 $20,965 * -26.6% 7,012 7,674 * -8.6% $4,604,199 $3,184,265 * 44.6% 17,745 18,904 * -6.1% $55,237 $52,915 * 4.4% Avg. Rev Minority Employer Firms 2012 7,952,386 2007 5,759,209 2002 * % Change 38.1% $173,552 $177,941 * -2.5% 908,800 766,533 * 18.6% Tennessee 2012 2007 2002 % Change 105,234 68,218 * 54.3% $138,213 $133,705 * 3.4% Shelby County 2012 2007 2002 % Change 52,295 27,760 * 88.4% City of Memphis 2012 2007 2002 % Change 43,949 22,597 * 94.5% All Minority Firms United States Avg. Rev Avg. Rev Majority NonEmployer Firms Avg. Rev $51,815 $47,801 * 8.4% * Data Unavailable US Census Bureau SBO African American Data 2002 - 2012 Total Number of Businesses Avg. Revenues % Change in % Change in Number of # of firms rev of firms Employer '02-'12 '02-'12 Firms Avg. Revenues Number of NonEmployer firms Avg. Revenues 36.2% 2,475,266 1,815,298 1,103,049 36.4% 64.6% $18,888 $21,261 $20,708 -11.2% 2.7% 124.4% -8.8% 31.4% 71,422 43,697 24,736 63.4% 76.7% $16,813 $22,498 $21,140 -25.3% 6.4% 188.7% -20.5% 18.5% 45,425 22,753 12,903 99.6% 76.3% $14,694 $20,558 $22,953 -28.5% -10.4% 252.0% -36.0% 18.6% 39,066 19,157 10,873 103.9% 76.2% $13,183 $17,491 $22,074 -24.6% -20.8% 259.3% -40.3% % Change in % Change in # of firms rev of firms '02-'12 '02-'12 United States 2012 2,584,403 2007 1,921,864 2002 1,197,567 % Change '07-'12 34.5% % Change '02-'07 60.5% $58,119 $70,629 $74,018 -17.7% -4.6% 115.8% -21.5% 109,137 106,566 94,518 2.4% 12.7% $947,905 $911,594 $696,158 4.0% 30.9% -38.5% 2,265 2,029 2,075 11.6% -2.2% $780,106 $991,955 $593,787 -21.4% 67.1% -54.0% 882 832 919 6.0% -9.5% $670,781 $871,666 $565,941 -23.0% 54.0% -55.8% 798 737 800 8.3% -7.9% $695,503 $904,252 $586,329 -23.1% 54.2% 15.5% % Change in % Change in # of firms rev of firms '02-'12 '02-'12 Tennessee 2012 2007 2002 % Change '07-'12 % Change '02-'07 73,688 45,726 26,811 61.2% 70.5% $40,274 $65,516 $65,459 -38.5% 0.1% 46,307 23,586 13,822 96.3% 70.6% $27,190 $50,580 $59,055 -46.2% -14.4% 39,864 19,895 11,673 100.4% 70.4% $26,842 $50,339 $60,745 -46.7% -17.1% 174.8% 9.2% Shelby County 2012 2007 2002 % Change '07-'12 % Change '02-'07 235.0% -4.0% Memphis 2012 2007 2002 % Change '07-'12 % Change '02-'07 241.5% Copyright © July 2016 by The MMBC Continuum. All rights reserved. -0.3% 12 2016 STATE OF MINORITY BUSINESS US Census Bureau SBO Hispanic Data 2002 - 2012 United States 2012 2007 2002 % Change '07-'12 % Change '02-'07 Total Number of Businesses Avg. Revenues 3,305,873 2,260,269 1,573,464 46.3% 43.6% $143,271 $155,141 $141,044 -7.7% 10.0% 13,743 8,700 4,301 58.0% 102.3% $236,969 $204,039 $233,525 16.1% -12.6% 2,446 1,304 532 87.6% 145.1% $151,374 $182,046 $216,942 -16.8% -16.1% 1,933 909 366 112.7% 148.4% $125,484 $176,741 $277,626 -29.0% -36.3% Number of Employer Firms Avg. Revenues 1.6% 287,501 248,852 199,542 15.5% 24.7% $1,321,717 $1,124,848 $899,600 17.5% 25.0% 1.5% 1,260 1,097 885 14.9% 24.0% $2,139,245 $1,285,049 $1,001,608 66.5% 28.3% -30.2% 186 128 121 45.3% 5.8% $1,580,339 $1,206,570 $846,562 31.0% 42.5% -54.8% 155 88 98 76.1% -10.2% $1,267,194 $1,115,795 $927,755 13.6% 20.3% % Change in % Change in # of firms '02- rev of firms '02-'12 '12 110.1% Number of NonEmployer firms Avg. Revenues 46.9% 3,018,371 2,011,417 1,373,922 50.1% 46.4% $31,024 $35,170 $30,875 -11.8% 13.9% 119.7% 0.5% 113.6% 12,483 7,603 3,416 64.2% 122.6% $44,959 $48,065 $34,533 -6.5% 39.2% 265.4% 30.2% 86.7% 2,260 1,176 410 92.2% 186.8% $33,769 $70,532 $31,656 -52.1% 122.8% 451.2% 6.7% 36.6% 1,779 821 269 116.7% 205.2% $25,940 $76,089 $39,740 -65.9% 91.5% 561.3% -34.7% % Change in % Change in # of firms '02- rev of firms '02-'12 '12 44.1% % Change in % Change in # of firms '02- rev of firms '02-'12 '12 Tennessee 2012 2007 2002 % Change '07-'12 % Change '02-'07 219.5% 42.4% Shelby County 2012 2007 2002 % Change '07-'12 % Change '02-'07 359.8% 53.7% Memphis 2012 2007 2002 % Change '07-'12 % Change '02-'07 428.1% 58.2% US Census Bureau SBO Asian Data 2002 - 2012 United States 2012 2007 2002 % Change '07-'12 % Change '02-'07 Total Number of Businesses Avg. Revenues 1,917,902 1,549,559 1,103,587 23.8% 40.4% $364,717 $326,575 $296,002 11.7% 10.3% 14,364 11,178 7,241 28.5% 54.4% $516,011 $319,849 $301,429 61.3% 6.1% 3,222 2,580 1,789 24.9% 44.2% $668,815 $310,407 $267,581 115.5% 16.0% 1,933 1,574 1,154 22.8% 36.4% $953,726 $299,485 $348,355 218.5% -14.0% % Change in % Change in # of firms '02- rev of firms '12 '02-'12 73.8% Number of Employer Firms Avg. Revenues 23.2% 481,026 397,426 319,468 21.0% 24.4% $1,304,571 $1,141,280 $911,399 14.3% 25.2% 71.2% 4,727 3,527 2,753 34.0% 28.1% $1,450,475 $903,420 $713,713 60.6% 26.6% 149.9% 1,002 592 647 69.3% -8.5% $1,991,867 $1,176,247 $668,258 69.3% 76.0% 173.8% 734 472 537 55.5% -12.1% $2,412,595 $916,051 $700,650 163.4% 30.7% % Change in % Change in # of firms '02- rev of firms '12 '02-'12 50.6% Number of NonEmployer firms 1,436,876 1,152,134 784,118 24.7% 46.9% Avg. Revenues % Change in % Change in # of firms '02- rev of firms '12 '02-'12 $50,081 $45,545 $45,275 10.0% 0.6% 83.2% 10.6% 103.2% 9,637 7,651 4,488 26.0% 70.5% $57,651 $50,831 $48,529 13.4% 4.7% 114.7% 18.8% 198.1% 2,221 1,988 1,142 11.7% 74.1% $71,620 $52,571 $40,578 36.2% 29.6% 94.5% 76.5% 244.3% 1,199 1,102 617 8.8% 78.6% $60,641 $35,402 $41,739 71.3% -15.2% 94.3% 45.3% 43.1% Tennessee 2012 2007 2002 % Change '07-'12 % Change '02-'07 98.4% 71.7% Shelby County 2012 2007 2002 % Change '07-'12 % Change '02-'07 80.1% 54.9% Memphis 2012 2007 2002 % Change '07-'12 % Change '02-'07 67.5% Copyright © July 2016 by The MMBC Continuum. All rights reserved. 36.7% 13 2016 STATE OF MINORITY BUSINESS RACE/ETHNICITY CODE DEFINITIONS Race/Ethnicity Code Definition Minority Minority-owned. Hispanics, Blacks or African Americans, American Indians and Alaska Natives, Asians, Native Hawaiians and Other Pacific Islanders, and/or persons of some other race not classified as "nonHispanic White" own 51 percent or more of the equity, interest, or stock of the business. Majority or Nonminority Nonminority-owned. Non-Hispanic Whites own 51 percent or more of the equity, interest, or stock of the business. African American Black-owned. Blacks or African Americans own 51 percent or more of the equity, interest, or stock of the business. Black or African American is defined as a person having origins in any of the black racial groups of Africa, including those who consider themselves to be "Haitian." Hispanic Hispanic-owned. Hispanics own 51 percent or more of the equity, interest, or stock of the business. Hispanic or Latino is defined as a person of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin, regardless of race. Data are tabulated for the following Hispanic subgroups:  Mexican, Mexican American, Chicano  Puerto Rican  Cuban  Other Hispanic, Latino, or Spanish origin Asian Asian-owned. Asians own 51 percent or more of the equity, interest, or stock of the business. Asian is defined as a person having origins in any of the original peoples of the Far East, Southeast Asia, or the Indian subcontinent including, for example, Cambodia, China, India, Japan, Korea, Malaysia, Pakistan, the Philippine Islands, Thailand, and Vietnam. Data are tabulated for the following Asian subgroups:  Asian Indian  Chinese  Filipino  Japanese  Korean  Vietnamese  Other Asian Employer Firm A firm or company with any amount of paid employees other than the owner. Non-Employer Firm A firm or company with no paid employees other than the owner. Source: US Census Bureau American FactFinder – About the Data Copyright © July 2016 by The MMBC Continuum. All rights reserved. 14 2016 STATE OF MINORITY BUSINESS ENDNOTES 1 http://quickfacts.census.gov/qfd/states/47000.html http://www.census.gov/quickfacts/table/PST045215/4748000,00 3 https://aspe.hhs.gov/2015-poverty-guidelines 4 http://www.bls.gov/opub/gp/pdf/gp11_27.pdf 5 http://www.census.gov/quickfacts/table/PST045215/4748000,00 6 https://nycfuture.org/pdf/Giving_Small_Firms_the_Business.pdf 7 http://people.ucsc.edu/~marion/Papers/stateaffirmaction_v15.pdf 8 https://research.stlouisfed.org/fred2/series/MPHUR/# 9 http://www.bls.gov/opub/gp/pdf/gp14_27.pdf 2 Copyright © July 2016 by The MMBC Continuum. All rights reserved. 15 CONTACT INFORMATION Please direct all questions, comments, or inquiries about this report to: The MMBC Continuum Memphis, TN 38103 (901) 525-6512 Luke Yancy III President & CEO lyancy@mmbc-memphis.org For additional copies of this report, visit us online at: www.mmbc-memphis.org Luke Yancy III President & CEO The MMBC Continuum 158 Madison Avenue, Suite 300 Memphis, TN 38103 Office: (901) 525-6512 Fax: (901) 525-5204 mmbc-memphis.org