The number of black and minority-owned business start-ups has reached record levels in Britain and now account for 11 per cent of all new business start-ups.
Research from Barclays bank has found that the number of minority-owned start-ups has risen by a third, from 32,000 in 2000 to 50,000 in 2004. The growth numbers is also matched by their performance. Black and minority ethnic (BME) firms outstripped that of their white counterparts, while they are three times more likely to have a turnover between £250K and £1M and more likely to employ staff.
According to Barclay's Louise Fowler: "The rise in BME businesses is due to a surge in the number of young BME entrepreneurs, with more than twice as many running their own business compared to their white counterparts.
They are focusing on being innovators in business/professional services and catering, unlike the older generation where almost half are retail entrepreneurs."
However few claimed to be involved in trade outside of their local area or region, suggesting that many of the businesses cater for the communities in which they are based.
Pakistani and Chinese business owners show the highest rates of entrepreneurial activity, with 22 per cent and 19 per cent respectively. But the rate for Afro-Caribbean self-employment is low at just seven per cent.
Professor Monder Ram OBE, Director of the Centre for BME Research at De Montford University in Leicester, said: "Overall the research findings are hugely encouraging and indicate the important contribution BMEs are making to the economy.
"Their entrepreneurial efforts are also noticeable for the 'non-traditional' sectors they are entering, such as property and finance."
Nevertheless, Professor Ram added, they still face some unique barriers. These may include payment, since six out of 10 of those surveyed said they felt that they receive less money for performing the same function as their white counterparts.
But only eight per cent felt they had been held back by racism.
Young ethnic entrepreneurs put much of their success down to family support. More than six out of 10 cited their families as key to their success, while almost half would turn to family and friends for advice rather than a solicitor.
But entrepreneurial activity also runs along family lines. Three quarters of those surveyed have family members with a history of setting up businesses, whilst in 14 per cent of cases the family provided informal finance. In almost a quarter of businesses family members physically helped out.
Regionally, the number of ethnically-owned firms closely mirrors areas with large ethnic minority populations. London has the highest number of businesses with 38 per cent, followed by the West Midlands, South East and the North West.