Small Businesses: Marketing Financial Services to Minority Owned Businesses - US

Published by: Mintel International Group Ltd.

Published: Sep. 1, 2007 - 80 Pages

Table of Contents

Scope and Themes

What you need to know

Scope of this report

Resources used for The Consumer sections

Abbreviations and terms

Abbreviations

Terms

Definitions

Figure 1: Cultural heritage of Hispanic survey respondents. 2006

Executive Summary

Minority-owned small businesses increasing at a rapid rate

Minority groups—overview

Minority business owners—who are they?

How do they start and fund their businesses?

What do they think of their financial services provider?

How can you reach minority business owners?

The U.S. Minority Small Business Marketplace

Overview of U.S. small businesses

Overview of minority business owners

Figure 2: Change in number and gross receipts for minority firms, 1997-2002

Figure 3: Minority business representation, by industry sector, 2002

Changing minority demographics

Figure 4: Total population, by race and Hispanic origin, 2002-12

Figure 5: U.S. minority group buying power, 2004

Profile of minority business owners

Figure 6: Use of financial products by minority-owned small businesses, by race/ethnicity, 2003

Figure 7: Suppliers of financial services used by small businesses, by race/ethnicity, 2003

Figure 8: Profile of self-employed, by race/ethnicity, gender and age, January-September 2006

Self-employed and gender

Self-employed and age

Minority business owners and company size

Figure 9: Size of firms, by number of employees—all firms vs. those for which the majority owner is non-white or Hispanic, 2003

Figure 10: Self-employed, by company size and race/ethnicity, January-September 2006

Figure 11: Self-employed by race/ethnicity, company size, gender and age, January-September 2006

Figure 12: Self-employed, by income, education and race/ethnicity, January-September 2006

Trends and opportunities for financial services companies

Hispanics

Figure 13: Percent change in Hispanic population—top 23 cities,-1990-2000

Figure 14: Percentage change in metropolitan areas with the fastest-growing Hispanic populations, 2000-04

Figure 15: Total population and Hispanic population, by age, 2006

Figure 16: Hispanic population projections, 2010-50

Figure 17: Hispanic heritage, language spoken, and born/not born in U.S., by company size, January-September 2006

Black Americans

Figure 18: Counties with the largest number of black-owned firms, 2002

Figure 19: Industries with the most black-owned businesses, 2002

Figure 20: States with the largest number of black-owned firms, 2002

Figure 21: Percent change in black American population—top 23 cities, 1990-2000

Figure 22: Percentage change in metropolitan areas with the fastest-growing black populations, 2000-04

Figure 23: Total population and black population, by age, 2006

Asian Americans

Asian American small businesses

Figure 24: Percent change Asian/Pacific Islander population—top 23 cities, 1990-2000

Figure 25: Percentage change in metropolitan areas with the fastest-growing Asian populations, 2000-04

Asian Americans and financial institutions

Asian American online activity

The Consumer Survey—Types of Businesses Surveyed

Type of business

Figure 26: Type of business owned, by gender—minority respondents who own a business, July 2007

Figure 27: Type of business owned, by age—minority respondents who own a business, July 2007

Figure 28: Type of business owned, by income—minority respondents who own a business, July 2007

Figure 29: Type of business owned, by race/ethnicity—minority respondents who own a business, July 2007

Figure 30: Type of business owned, by marital status and number of people in the househole—minority respondents who own a business, July 2007

Figure 31: Type of business owned, by education—minority respondents who own a business, July 2007

Figure 32: Type of business owned, by Census region—minority respondents who own a business, July 2007

Summary—who owns what

Number of employees

Figure 33: Number of employees, by gender—minority respondents who own a business, July 2007

Figure 34: Number of employees, by age—minority respondents who own a business, July 2007

Figure 35: Number of employees, by race/ethnicity—minority respondents who own a business, July 2007

Figure 36: Number of employees, by marital status and number of persons in household—minority respondents who own a business, July 2007

Figure 37: Number of employees, by education—minority respondents who own a business, July 2007

Figure 38: Number of employees by Census region—minority respondents who own a business, July 2007

The Consumer—Financial Details of Business Owners

Primary source of income

Figure 39: Is business primary or secondary source of income?, by gender, age and income—minority respondents who own a business, July 2007

Figure 40: Is business primary or secondary source of income?, by race/ethnicity—minority respondents who own a business, July 2007

Figure 41: Is business primary or secondary source of income?, by marital status and number of persons in household—minority respondents who own a business, July 2007

Figure 42: Is business primary or secondary source of income?, by level of education—minority respondents who own a business, July 2007

Figure 43: Is business primary or secondary source of income?, by Census region—minority respondents who own a business, July 2007

Are respondents also homeowners?

Figure 44: Home ownership rates, by race/ethnicity, 1996 and 2005

Figure 45: Home ownership rates, by race/ethnicity—minority respondents who own a business, July 2007

Figure 46: Home ownership rates, by gender, age and income—minority respondents who own a business, July 2007

Figure 47: Home ownership rates, by marital status and number of persons in household—minority respondents who own a business, July 2007

Start-up funding

Figure 48: Primary source of funds to start business, by gender, age and income—minority respondents who own a business, July 2007

Figure 49: Primary source of funds to start business, by race/ethnicity—minority respondents who own a business, July 2007

Figure 50: Primary source of funds to start business, by marital status and number of persons in household—minority respondents who own a business, July 2007

Figure 51: Primary source of funds to start business, by education—minority respondents who own a business, July 2007

Financing cash flow

Figure 52: Credit card usage by race/ethnicity and gender—self-employed, January-September 2006

Figure 53: Types of loans held by race/ethnicity—self-employed, January-September 2006

Figure 54: Financing cash flow needs, by gender, age and income—minority respondents who own a business, July 2007

Figure 55: Financing cash flow needs, by race/ethnicity—minority respondents who own a business, July 2007

Figure 56: Financing cash flow, by marital status and number of persons in household—minority respondents who own a business, July 2007

Figure 57: Financing cash flow, by level of education—minority respondents who own a business, July 2007

The Consumer—Business Owner Relationship with Financial Institutions

Interest in financial educational programs

Figure 58: Interest in financial educational programs, by gender, age and income—minority respondents who own a business, July 2007

Figure 59: Interest in financial educational programs, by race/ethnicity—minority respondents who own a business, July 2007

Figure 60: Interest in financial educational programs, by education—minority respondents who own a business, July 2007

Interest in financial products/services

Figure 61: Self-employed who have life and/or health insurance, by race/ethnicity and company size, January-September 2006

Figure 62: Interest in financial products and services, by gender, age and income—minority respondents who own a business, July 2007

Figure 63: Interest in financial products and services, by race/ethnicity—minority respondents who own a business, July 2007

Figure 64: Interest in financial products and services, by education—minority respondents who own a business, July 2007

Figure 65: Interest in financial products and services, by Census region—minority respondents who own a business, July 2007

Reasons for choosing a financial services provider

Figure 66: How financial institution was chosen, by gender, age and income—minority respondents who own a business, July 2007

Figure 67: How financial institution was chosen, by race/ethnicity—minority respondents who own a business, July 2007

Figure 68: How financial institution was chosen, by marital status and number of persons in household—minority respondents who own a business, July 2007

Figure 69: How financial institution was chosen, by education—minority respondents who own a business, July 2007

Would you recommend your bank or credit union to others?

Figure 70: Would you recommend your current primary bank or credit unions to others?, by gender, age, and income—minority respondents who own a business, July 2007

Figure 71: Would you recommend your current primary bank or credit unions to others?, by race/ethnicity—minority respondents who own a business, July 2007

Figure 72: Would you recommend your current primary bank or credit unions to others?, by level of education—minority respondents who own a business, July 2007

Marketing to minorities and additional recommendations

Marketing to Asian Americans

Marketing to Hispanics

Figure 73: Hispanic ad spending, by industry, 2004 and 2005

Appendix: Industry Associations

Appendix: Advertising and Promotion

Figure 74: Banco Popular small business banking direct mail creative, June 2007

Figure 75: TotalBank Totally Free Business Checking direct mail creative, August 2007

Figure 76: Blue Cross Blue Shield of Florida, print advertisement, May 2007

Figure 77: Capital One general small business direct mail creative, August 2007

Figure 78: American Express Simply Cash general business credit card direct mail creative, July 2007

Abstract

This report looks at the attitudes and behavior of minority small business owners, including Asian Americans, African Americans, and Hispanic Americans (of various countries of origin, and differing lengths of residency in the United States) and their means of starting business and funding business expenses.

Mintel presents specific information about relevant attitudes and perceptions of self-employed minority business owners. In order to create advertising and marketing that resonates with target consumers, it is essential to identify those attitudes, concerns, and needs most relevant to that target group.

Loans to minorities have almost tripled since 2002 and risen in dollar value from $3.5 billion to more than $6.7 billion. Between 1997 and 2002, the growth of minority-owned firms outpaced the national rate, increasing 35% compared to 10% for all classifiable firms. Gross receipts for minority firms grew 13%, again surpassing the growth rate for all classifiable firms.

Major race and ethnic groupings include:

• White
• Black or African American
• American Indian and Alaska Native
• Asian and Pacific Islander
• Hispanic

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