America's
entrepreneurs play a vital role in the stability and prosperity
of our national economy. They take the risk necessary to create
wealth and employment opportunities, develop innovative products,
and introduce new business practices into the marketplace.
This importance extends far beyond America's borders, as the
U.S. demographic changes; it is critical that we use the entrepreneurial
talent available in all our communities to maintain a growing
national economy.
A recent study of new business starts
revealed some interesting facts. First, new business starts
are up 35 % over this period last year. Secondly, minorities
actually lead the U.S. in new business starts. More specifically,
the report shows that Blacks are more than 50% more likely
than whites or Hispanics to report that they are in the process
of starting a business. Further, 26 out of every 100 Black
men with graduate education experience report efforts to start
a new business as opposed to 10 out of every 100 White men
with the same education level.
Unfortunately, 50% of those startups
fail within the first two years. The reasons given for failure
vary but the most common reason for failure is the lack of
proper funding. With the recent developments in the U.S.,
one would believe that perhaps funding is not available. However,
contrary to that belief, the National Venture Capital Association
reported that $4.6 billion or 11% of venture capital funds
go unused yearly because venture capitalist and entrepreneurs
lack the resources to connect with each other. Even when funds
are available, there remain significant disparities between
minority and non-minority owned firms in terms of acquiring
those needed funds.
In 1997, there were 3,039,033 minority
-owned firms in the US generating $591.3 billion in gross
receipts with over 4.5 million employees. In addition, growth
rates in both numbers and gross receipts of minority -owned
firms substantially exceeded those of non-minority firms between
1992 and 1997. Additionally, it has been found that minority
owned businesses are frequented by minorities. With the Black
"Buying Power" on the rise, as reported by International
Demographics Inc, minority owned businesses should continue
to develop and prosper.
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