Secrets of Gazelles: The Differences between High-Growth and Low-Growth Business Owned by African American Entrepreneurs

Abstract

The research findings are based on a national survey of 350 African American business owners whose companies had ten to one hundred employees. Each quarter of 2002 and 2003, owners were randomly selected and interviewed. Companies were classified into three groups according to their annual employment growth over five years: gazelles (20 percent or greater rate of growth), growth-oriented firms (1 to 19 percent), and no-growth firms (less than 1 percent or negative). In comparison to no-growth firms, gazelles were more likely to market to the government sector, less likely to compete on the basis of price, more likely to serve regional and national markets, and more likely to have fewer African Americans workers. CEOs of no-growth companies were more likely to have entered business because they lost a previous job. Surprisingly, no statistically significant differences appeared in thirty-nine other variables that defined owner attributes, firm characteristics, and business strategies of gazelles and no-growth firms.