What would it take for more Black-owned businesses to grow and hire?

On this page: We are already in business and The gap is in growing

The next two paragraphs are my own account of a public meeting, told as I remember it. They are not a transcript.

I was at a DeKalb County town hall in Stonecrest held by our county CEO, Lorraine Cochran-Johnson, when residents began asking a question I have heard for years: why are the big box stores not coming to Stonecrest? The CEO talked about population density and how density is what attracts big box stores. Then the room did something I keep thinking about. The same residents who wanted the big stores made it clear they did not want the density. They did not want the crowding that comes with it. They wanted the stores without the thing the stores say they need.

I did not hear those residents as unreasonable. I heard them asking for what a big store brings: jobs close to home, a place to spend money without driving to the next county, a stronger tax base, and the feeling that someone believes in where we live. That left me with a different question. If what we want is what the store brings, does it have to come from a company that decides from somewhere else whether we qualify? Growing the revenue of Black businesses leads to employing others in our community, to wealth building, and to attracting other businesses. That, to me, is economic development from a business perspective, and it does not wait on anyone's density formula. So I went to the Census Bureau's business counts to see what we already have.

We are already in business

In 2023 Black Americans owned 4.4 million businesses that have no employees, the one person operations the Census Bureau calls nonemployer businesses. That is 14.4 percent of all such businesses in the country, while Black residents are 12.2 percent of the population ^[1][3]. Together those owners took in $128.7 billion. Another 200,885 Black-owned businesses had employees on the payroll, and in 2023 they employed 1,864,727 people, paid them $69.8 billion and made $249.0 billion in sales ^[2].

Where Black residents are the majority, the pattern is even stronger. In Stonecrest, 85.1 percent of nonemployer businesses are Black-owned. DeKalb County has 131 Black-owned nonemployer businesses for every 1,000 Black residents, against 107 in the nation ^[1][3]. And the strength reaches far past Georgia. Maryland has 10,470 Black-owned businesses with employees, one in every ten employer firms in the state, and they employ 101,896 people; in Maryland's 4th Congressional District nearly one in four employer firms is Black-owned ^[2]. In the District of Columbia Black-owned employer firms are 13.9 percent of the total and pay an average of $52,722 per worker ^[2]. Black-owned firms in Texas employ 200,483 people, more than in any other state, and in Massachusetts they average 25.9 workers each, against 9.3 nationally ^[2]. Colorado and Washington each have about 10 Black-owned employer firms for every 1,000 Black residents, twice the national rate ^[2][3]. In King County, Washington and Dakota County, Minnesota, Black-owned one person businesses averaged about $52,000 in receipts, close to twice the national average for Black-owned nonemployer businesses ^[1]. Metro Atlanta holds three of the five congressional districts with the most Black-owned employer firms in the country: Georgia's 6th, 5th and 13th ^[2].

One plain note on counting. The Census Bureau calls a business Black-owned when Black owners, alone or in combination with another race, hold at least 51 percent of it. The population figures here count people who are Black alone, so the figures per 1,000 Black residents run a little high. They are still a fair way to compare places.

The gap is in growing

Starting is not where we fall behind. Growing is. Black owners hold 14.4 percent of the one person businesses but only 3.4 percent of the businesses with employees, and those businesses employ 1.4 percent of the people who work for employer firms ^[1][2]. For every 1,000 Black residents there are 4.9 Black-owned employer firms; for every 1,000 Americans there are 17.7 employer firms of all kinds ^[2][3]. Georgia shows the same shape: 37.5 percent of the one person businesses and 8.7 percent of the employer firms. So does Maryland: 34.1 percent and 10.0 percent ^[1][2]. And the typical Black-owned one person business took in $29,324 in 2023, about half the $57,607 average for all nonemployer businesses ^[1].

That gap is not a story about effort. Four million people do not open businesses because they lack drive. It is a story about the step between working for yourself and paying someone else, and one of the surest ways across that step is steady work from a customer large enough to plan around. Government is that kind of customer. In the federal money story we found that in federal fiscal year 2025 the typical majority Black county had $31 per resident in federal contract work performed there, against $77 in the typical county elsewhere, about 40 percent of the rate ^[4]. That record shows where the work was done, not who owns the businesses that did it. But it tells us the building money that comes as contracts is thin where many of our businesses are.

On this page: Why the step up is so steep; Some states already changed the rules; and What you can do, wherever you live

Why the step up is so steep

When I talk with owners about bidding on public work, the same walls come up. Public construction work usually requires a bond, a promise from a bonding company that the job will be finished and the suppliers paid, and a bonding company wants years of financial statements and a track record a young firm does not have yet. Contracts carry insurance minimums sized for larger firms. Agencies often bundle many small jobs into one big contract that only a large company can carry. And when the government pays slowly, the small firm is the one floating payroll and supplies for months. None of these rules says a small business may not apply. Together they decide who can.

Federal rules reserve most purchases between $15,000 and $350,000 for small businesses, but "small" there can mean hundreds of employees, and there is no federal size class for micro businesses, so a five person firm still competes with much larger companies that also count as small ^[5]. The Small Business Administration does guarantee bonds for small businesses on contracts up to $9 million, or $14 million for federal work, which is one answer to the bonding wall when owners know to use it ^[5].

Some states already changed the rules

By our count, nine states either define micro businesses in law or regulation or run a state micro business program with a published size test: California, Virginia, Washington, Montana, Texas, Nebraska, Pennsylvania, New Jersey and Vermont ^[6]. Three of them tie that definition directly to state contracts. California certifies microbusinesses with average yearly receipts of $6 million or less, gives certified small and micro firms a 5 percent bid preference, lets agencies award up to $249,999.99 for goods and services directly after two quotes, and raises the penalty when the state pays these firms late ^[6]. Virginia certifies micro businesses with 25 or fewer employees and $3 million or less in receipts and sets aside state technology purchases up to $10,000 for them ^[6]. Washington defines a microbusiness as one with less than $1 million in yearly revenue, lets the contractor on public works of $150,000 or less hold back 10 percent of the payment in place of a bond, and tells state buyers to break up large contracts and make more than one award ^[6].

Georgia is closer than most people realize. State law already defines a Tier One small business as one with 10 or fewer employees or $1 million or less in yearly receipts. Today that label is used for reporting only and carries no benefit ^[6]. A bill called the Georgia Small Business Set-Aside Act, HB 863, cleared a House committee and reached the House calendar in 2026, then stalled ^[6]. So Georgia does not need to invent a definition. It needs to attach something to the one it already has, and many states with a small business certification on the books are in the same position.

What you can do, wherever you live

Here is what a state law or purchasing rule can include. Every item already exists in at least one state ^[6].

• A size definition for the smallest firms, such as 10 or fewer employees and $1 million or less in revenue (Montana; Georgia's Tier One).
• A reserved lane for small purchases. Virginia sets aside purchases up to $10,000 for micro firms; New York lets agencies buy up to $500,000 from small firms without formal bidding.
• A bid preference, such as California's 5 percent.
• A simple direct award path after a few quotes, as in California.
• A spending goal with a band for the smallest firms. New Jersey reserves 5 percent for firms with revenue up to $500,000 inside a 25 percent goal; Maryland requires 15 percent with certified small businesses.
• Bond relief. Washington allows retainage in place of a bond on small public works; Louisiana accepts bonds guaranteed by the Small Business Administration on set aside work.
• Faster payment, with higher late payment penalties when the state pays small firms late, as in California.
• Smaller contracts and more winners, by breaking up large contracts and making multiple awards, as in Washington.
• Capital beside contracts, such as Montana's micro loans up to $100,000 and Nebraska's refundable micro business tax credit.

Two offices decide most of this. The state legislature writes the definitions, set asides, preferences and payment rules into law. The state purchasing agency, often called general services, administration or enterprise services, sets the dollar limits, the bonding and insurance terms and how big each contract is. Start by asking your state purchasing office three questions: what size category does the state use for its smallest businesses, does that category carry any benefit in bidding, and how many contracts went to firms in it last year. Then take the answers to your state legislators and ask them to attach a benefit to that category. If you own a business, register with your state's certification program and at SAM.gov, the federal system a business must join before it can win federal work, so you are counted when the rules change.

I keep coming back to that room in Stonecrest. Residents wanted jobs, places to shop and a reason for others to invest, and they were told to wait for a density we do not want. The businesses that can deliver some of that are already here, 6,300 of them in Stonecrest alone, most working by themselves. Helping even a share of them hire one person is economic development we can start this year, and it is built by people who already live where the money stays.

Facts in this story come from the official Census, Treasury and state records listed below. The year of each figure is shown with it. Public agencies release data on their own schedules, and SourceLine updates each figure as soon as it is published.