Scaling to $1 Million: How Small Businesses Fare by Owner Race and Gender

We tracked firm revenues for the first five years of business (or fewer, if they ended their banking relationship prior to completing five years of business.) and recorded initial annual revenues and whether they attained $1 million in revenue in that time span.

This figure has two panels stacked vertically, each of which is a vertical grouped bar chart. The title reads “Incidence of $1 million firms by initial revenues.” In the top panel, subtitled “Owner race,” firms are grouped by initial year revenue and owner race. Initial year revenues are bucketed into five groups: less than $100,000; $100,000-$249,999; $250,000-$499,999; $500,000-$749,999; and $750,000-$999,999. Bars represent the share of firms in the given initial revenue bucket and owner race that attain $1 million in revenues. Across all races, firms with lower initial revenues are less likely to attain $1 million in revenues, but within initial revenue buckets, Black-owned firms are consistently less likely to attain $1 million in revenue than Asian-, Hispanic-, and White-owned firms. Among firms with initial revenues less than $100,000, 2 percent of Asian-owned firms, 0.3 percent of Black-owned firms, 0.7 percent of Hispanic-owned firms, and 1.3 percent of White-owned firms attain $1 million in revenue. Among firms with initial revenues between $750,000 and $999,999, 51 percent of Asian-owned firms, 42 percent of Black-owned firms, 55 percent of Hispanic-owned firms, and 53 percent of White-owned firms reach $1 million in revenue.

In the bottom panel, subtitled “Owner gender,” firms are grouped by initial year revenue and owner gender. Initial year revenues are bucketed into five groups: less than $100,000; $100,000-$249,999; $250,000-$499,999; $500,000-$749,999; and $750,000-$999,999. Bars represent the share of firms in the given initial revenue bucket and owner gender that attain $1 million in revenues. Across both genders, firms with lower initial revenues are less likely to attain $1 million in revenues, but within initial revenue buckets, female-owned firms had consistently lower shares of reaching $1 million. Among firms with initial revenues less than $100,000, 0.6 percent of female-owned firms and 1.4 percent of male-owned firms attain $1 million in revenues. Among firms with initial revenues between $100,000 and $249,999, 2.8 percent of female-owned firms and 4.4 percent of male owned firms reach $1 million in revenue. Among firms with initial revenues between $250,000 and $499,999, 10 percent of female-owned firms and 13 percent of male-owned firms reach $1 million in revenue. Among firms with initial revenues between $500,000 and $749,999, 28 percent of female-owned firms and 31 percent of male-owned firms reach $1 million in revenue. Among firms with initial revenues between $750,000 and $999,999, 52 percent of both female-owned and male-owned firms reach $1 million in revenue. The chart note reads, “Firms with unknown race or gender or no classifiable majority ownership by race or gender are not shown in their respective charts. Source: JPMorgan Chase Institute.”

We thank our research teammate, Laura Wilcox, for her hard work and contribution to this research. We also thank Elizabeth Ellis, Alfonso Zenteno, Annabel Jouard, Stephen Harrington, and Kate Finnerty for their support. We are indebted to our internal partners and colleagues, who support delivery of our agenda in a myriad of ways, and acknowledge their contributions to each and all releases. We would like to acknowledge Jamie Dimon, CEO of JPMorgan Chase & Co., for his vision and leadership in establishing the Institute and enabling the ongoing research agenda. We remain deeply grateful to Tim Berry, Head of Corporate Responsibility, Heather Higginbottom, Head of Research, Policy & Insights, and others across the firm for the resources and support to pioneer a new approach to contribute to global economic analysis and insight.

This material is a product of JPMorgan Chase Institute and is provided to you solely for general information purposes. Unless otherwise specifically stated, any views or opinions expressed herein are solely those of the authors listed and may differ from the views and opinions expressed by J.P. Morgan Securities LLC (JPMS) Research Department or other departments or divisions of JPMorgan Chase & Co. or its affiliates. This material is not a product of the Research Department of JPMS. Information has been obtained from sources believed to be reliable, but JPMorgan Chase & Co. or its affiliates and/or subsidiaries (collectively J.P. Morgan) do not warrant its completeness or accuracy. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice. No representation or warranty should be made with regard to any computations, graphs, tables, diagrams or commentary in this material, which is provided for illustration/reference purposes only. The data relied on for this report are based on past transactions and may not be indicative of future results. J.P. Morgan assumes no duty to update any information in this material in the event that such information changes. The opinion herein should not be construed as an individual recommendation for any particular client and is not intended as advice or recommendations of particular securities, financial instruments, or strategies for a particular client. This material does not constitute a solicitation or offer in any jurisdiction where such a solicitation is unlawful.

Wheat,Chris.Chan, Stacey. Tremper,Nicholas. 2024. “Scaling to $1 Million: How Small Businesses Fare by Owner Race and Gender.” JPMorgan Chase Institute https://www.jpmorganchase.com/...