SUMMARY OF FINDINGS______________________CHARACTERISTICS OF BUSINESS OWNERS


=>SUMMARY OF FINDINGS

The 1992 Characteristics of Business Owners (CBO) Survey was conducted to
expand on the data published in the 1992 Economic Census reports: Survey of
Minority-Owned Business Enterprises (SMOBE), MB92-1, -2, -3, and -4, and
Survey of Women-Owned Businesses (WOB) WB92-1.  

CBO provides owner and business characteristics by race, ethnicity, gender,
kind of business, size of business, and legal form of organization for
individual proprietorships, partnerships, and subchapter S corporations. 

The 1992 Economic Census programs identified almost 17.3 million individual
proprietorships, partnerships, and subchapter S corporations with sales and
receipts of $3.3 trillion.  Table A provides summary totals of these firms
by business ownership group based on the responses to SMOBE, WOB, and the
Economic Census.

  Table A. Business Ownership Group:  1992

                                    Firms   Sales and Receipts
  Ownership Group                (number)         ($1,000,000)

  All businesses \1 . . . . .  17,253,143            3,324,200
  All minorities \1 . . . . .   1,965,565              202,011
    Hispanic  . . . . . . . .     771,708               72,824
    Black . . . . . . . . . .     620,912               32,197 
    Other minority(API/AIAN)\2    606,426               99,709
  Women . . . . . . . . . . .   5,888,883              642,484
  Nonminority male  . . . . .  10,114,456            2,526,942
 
     \1  Detail does not add to total because of inclusion of some 
    firms in more than one group.  Firms that were equally owned by 
    two or more minorities are included in the data for each minority
    group, but counted only once at total levels.

     \2 Other minority includes Asian, Pacific Islander, American 
    Indian, and Alaska Native (API/AIAN).

The SMOBE and WOB reports show that most of these firms were concentrated
in the service industries.  Forty-five percent of all U.S. firms, 48
percent of the minority-owned firms, 54 percent of the firms owned by
women, and 41 percent of the firms owned by nonminority males were
classified as services.  Retail trade has the next largest share with 14
percent of all U.S. firms, 16 percent of the minority-owned firms, and 19
percent of the women-owned firms.  However, construction has the second
largest share (15 percent) of the nonminority male-owned firms. 

These same reports show that while the nonminority male- and women-owned
firms are spread across all States, more than half of all minority-owned
firms are located in just four states:  California, Texas, Florida, and New
York.  Approximately 47 percent of the minority population is concentrated
in these four states.

=>OWNER CHARACTERISTICS

The 1992 CBO Survey shows that nearly 50 percent of the business owners in
each group were between the ages of 35 and 54 years of age in 1992, and
over half of those individuals were in the 35 to 44 year age bracket.
Overall, 70 percent of the owners were married.  Fourteen percent of the
owners of women-owned firms responded as veterans, compared to 31 percent
of the owners of nonminority male-owned firms.  Forty-five percent of
Hispanic business owners and 63 percent of API/AIAN business owners were
not born in the United States.  The highest percentage of college graduates
(approximately 49 percent) was among API/AIAN business owners.  Twenty-one
percent of those same individuals completed graduate school.  The education
and foreign born percentages for the API/AIAN group are dominated by the
Asians and Pacific Islanders.

=>HOME-BASED BUSINESSES

Overall, approximately 50 percent of businesses in 1992 were home-based. 
As expected, the percentage of firms operated from a home tended to be
higher for smaller firms.  Fifty-seven percent of businesses with receipts
less than $25,000 in 1992 were home-based, compared to 26 percent of firms
with receipts of $25,000 to $199,999, 16 percent of firms with receipts of
$200,000 to $999,999, and only 5 percent of firms with receipts of
$1,000,000 or more. 

Fifty-four percent of the individual proprietorships were home-based
businesses in 1992.  These same statistics for small corporations and
partnerships were considerably less with only 27 percent of those firms
operating from a home.

Of the home-based businesses, male-owned firms were more likely to use the
residence to do clerical work only or to telecommute.  In contrast, 
home-based women-owned firms were more likely to use their residences to 
produce goods or services on the premises. 

=>CAPITAL REQUIREMENTS

Information was collected separately on owners' sources of capital to start
or acquire their businesses, and the firms' use of business loans to
acquire startup capital.  
 
Owners-The majority of 1992 business owners started their enterprises with
less than $5,000.  The highest percentage (66 percent) was among the owners
of Black-owned firms. Owners of API/AIAN-owned firms started with the most
capital; 10 percent of them began their businesses with $100,000 or more. 
Forty-four percent of the owners did not borrow their starting capital, but
used money or assets of their own or from their families.

Firms-Most firms (approximately 60 percent) reported that the businesses
were started or acquired with no cash outlay or with less than $5,000. 
Forty-three percent of all firms did not borrow money to start or acquire
their businesses.   

Of the firms which borrowed money, 24 to 30 percent of the partnerships and
subchapter S corporations reported that their capital originated from
business loans from banking or commercial lending institutions.  However,
only 10 percent of the individual proprietorships reported that their
borrowed capital was provided by bank loans.  Less than 1 percent of the
businesses reported that the money borrowed was provided by 
government-guaranteed loans. 

=>OWNER'S WORK EXPERIENCE

Sixty-six percent of the business owners stated that the business they
owned in 1992 was the first one they had owned.  Overall, most of the
business owners reported that they were the original founders of the
business (approximately 69 percent).  Approximately 21 percent purchased
their share of the business or received a transfer of ownership in the
business.  However, for firms with $50,000 or more in receipts in 1992, the
larger the receipts size of the firm, the less likely the business was to
be owned by the "original founder." 

Fifty-two percent of business owners had 10 or more years of work
experience prior to starting/acquiring their business.  However, 66 percent
of business owners reported having no prior experience as the owner of
another business. 

Fifty-one percent of the business owners managed or worked in their
business the entire year.  About 35 percent of business owners averaged
more than 40 hours per week in their business, while 36 percent worked less
than 20 hours per week.  The percentage of business owners working less
than 20 hours per week was highest in the finance, insurance, and real
estate sector.  The percent of owners working part-time ranged from 46
percent for Hispanics to 56 percent for women.  However, for firms with
between $200,000 and $1,000,000 in sales and receipts, 59 percent of women
business owners worked more than 40 hours per week compared to 35 percent
of all businesses. 

=>PROFITABILITY

In 1992, 35 percent of business owners reported that 75 percent or more of
their total personal income was produced as a result of their business,
while 36 percent reported that none or less than 10 percent of their income
came from the business.  

Thirty-nine percent of businesses reported a net profit of less than
$10,000 from their business while another 21 percent claimed a profit of
$10,000 or more.  However, 20 percent of the businesses reported
experiencing a net loss in 1992.

=>WORK FORCE CHARACTERISTICS

Hispanic-owned firms hired fewer women employees than any other group. 
Thirty-two percent of the owners of Hispanic-owned employer firms reported
that in 1992 less than 10 percent of their employees were women.  Forty-eight 
percent of women-owned firms reported that 50 percent or more of
their employees were women.  This compares to only 35 percent of male-owned
firms.  Survey results indicate that minorities hire minorities.  Fourteen
to 33 percent of the owners of minority-owned employer firms reported that
their work force consisted of 76 to 100 percent minority employees.  

=>EXPORTS

Nine percent of manufacturing firms reported that some sales resulted from
exporting.  This ranged from 1 percent of Black-owned manufacturing firms
to 11 percent of nonminority male-owned manufacturing firms.  

Seven percent of wholesale firms reported having some export sales. 
Percent of sales resulting from exports varied more widely among the
wholesalers from 5 percent of Black-owned firms to 20 percent of 
Hispanic-owned firms and 20 percent of API/AIAN-owned firms.

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