Owner and Organizational Characteristics of Black‐and White‐Owned Businesses: Self Employed Blacks Had Less Training, Fewer Resources, Less Profits, but Had Similar Survival Rates

Abstract

Abstract. Owner and organizational characteristics of 94 Black‐owned businesses and 385 White‐owned businesses in Chicago, Boston, and Washington, D.C, are examined. Black business owners had fewer years of education and less business experience than their White counterparts. Black businesses were also smaller, more labor intensive, located in poorer neighborhoods, less likely to have insurance, visited by fewer customers per day, more likely to rent their shop space, and to be less profitable than White businesses. However, despite these organizational and individual characteristics, the survival rates of Black and White businesses were not significantly different. Logit analyses suggested that variables such as race, education, size of business, and the average income of those living in the neighborhood, in this sample, did have significant effects on business profitability but did not explain business survival.