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Black Entrepreneurs in Charleston Face an Uphill Road to Becoming Job Creators

Brian McClure

May 9, 2026

Stat of the Week

-STAT OF THE WEEK:-



We are approaching the end of National Small Business Week. Small Business Week is the time the nation stops to recognize the contributions of small business owners across the country.  Everyday, these small business owners are providing clients with a fresh hair cut, selling delicious food passed down over generations, or building new shelves in someone’s home. For many, they’ve navigated financial and social risks, made enormous personal sacrifices, and invested countless resources into their local communities.

 

Starting a business is not easy. They take on many types and many sizes. So I wanted to look into who is starting a business, what kinds of businesses are folks starting, and how long does it take to grow a business?  These questions led me to some interesting data points to consider for this week’s stat of the week.  

In 2023, 78.4 percent of all U.S. businesses had no paid employees and generated nearly 1.8 trillion dollars in revenue that year.

Based on the data, the vast majority of small businesses are what we call non employer firms. These are businesses with no paid employees, where the owner generates income through the business but does not put themselves or anyone else on a formal payroll.  And these firms generate a significant amount of annual revenue that pumps trillions of dollars into our nation’s economy. These businesses are quite literally the backbone of America. 


But there’s also another side to that coin. While these small businesses are important entry points into entrepreneurship, small businesses with paid employees (known as employer firms) also play an important role in a community’s economic, cultural, and social health.  They create jobs, build transferable wealth, anchor commercial corridors, and are more likely to access institutional capital such as government contracts. To be clear, not every business needs to grow into an employer firm. But every entrepreneur who wants that path deserves a fair shot at it. 


Nationally, Black entrepreneurs have made real strides. Between 2017 and 2022, the number of Black-owned employer firms grew by nearly 57 percent. During that period, Black entrepreneurs accounted for more than half of all new employer businesses created during that time. That momentum makes what is happening in Charleston all the more striking. 


In the Charleston-North Charleston metro area, White residents own businesses with paid employees at nearly five times the rate of Black residents. Figure 1 illustrates business ownership rates with paid employees across racial and ethnic groups.



Source: Employer firms per 100 workers by race and ethnicity, Charleston-North Charleston, SC metro area, 2022. National Equity Atlas, Business Ownership Indicators; U.S. Census Bureau, Annual Business Survey (ABS), 2022.


In Charleston, Black residents start and own non employer firms at rates largely comparable to White residents. This mirrors a broader national pattern in which most businesses operate without employees and generate income primarily for the owner.


However, Black-owned businesses in Charleston are far less likely to grow into firms that hire workers and expand operations. Years of structural barriers have shaped who has access to capital, government contracts, and professional networks that support business growth. Those barriers are reflected in this data. As a result, Black business owners in Charleston are more likely to operate in sectors with lower barriers to entry and fewer opportunities for scaling and long-term wealth generation. This may also help explain why many Black-owned businesses are concentrated in types of firms with fewer opportunities for growth, hiring, and long-term wealth generation. 


Figure 2 shows that the gap between Black and White entrepreneurs narrows considerably when looking at businesses without paid employees. Black residents in Charleston own nonemployer firms at rates close to White residents and near the metro average.  Black entrepreneurship in Charleston is vibrant, but it is concentrated in a type of firm that is less likely to spur job creation. 



Source: National Equity Atlas, Business Ownership Indicators; U.S. Census Bureau, Annual Business Survey (ABS), 2022.


The Charleston pattern reflects a persistent national trend. Roughly 96 percent of all Black-owned businesses nationwide operate without paid employees, compared to about 84 percent of businesses overall. That gap shows that Black entrepreneurs across the country face similar barriers to crossing into employer firm status, and that closing it will require deliberate policy intervention at every level.  


If Charleston is to have a truly inclusive economy, it must invest in Black and minority-owned small businesses. This includes expanding access to capital, increasing equitable access to government contracting, and building business development supports designed around the needs of Black entrepreneurs.  Without those investments, existing racial inequities in business ownership and wealth accumulation will persist.


APPENDIX



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