The number of black and minority ethnic (BME) business start-ups has reached record levels having grown by a third, from 32,000 in 2000 to 50,000 in 2004 according to research from Barclays. BME business start-ups now account for 11 per cent of all new business start-ups. The growth numbers are also bolstered by real success with BME's business performance outstripping that of their white counterparts. They are three times more likely to have a turnover between £250K and £1M and to employ staff.

Louise Fowler, small business marketing director for Barclays said: "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."

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. However, there is no room for complacency as BMEs still face some unique barriers."

Such barriers may include payment, as among BME entrepreneurs the majority (61%) feel that they receive less money for performing the same function as their white counterparts.

Young BME entrepreneurs, as with most ethnic entrepreneurs, rely on family. Almost half would turn to family and friends for advice rather than solicitors. Three quarters (73 per cent) 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, London has the highest number of black and minority ethnic businesses with 38 per cent of all BME businesses, followed by the West Midlands, South East and the North West. As all these areas have large BME populations, and with few claiming to be involved in trade outside of their local area or region, this suggests that many of the businesses cater for the BME communities in which they are based.

Other key findings:-

· Of all the BME businesses Pakistani and Chinese business owners show the highest rates of entrepreneurial activity, with 22 per cent and 19 per cent respectively, although the rate seen for Black African Caribbean self-employment is low at just 7 per cent.

· There were a few differences noted amongst the BME broad sub-groups namely; South Asian more likely to be involved in transport (12% vs. just 1% of Chinese) or property/finance (18% vs. 8% African-Caribbean). African-Caribbean and Middle Eastern are more likely to be involved in retail (19% and 30% respectively, compared to 13% South Asian and 12% Chinese). Chinese most likely to be in catering (30% vs. 23% of all BME), construction (10% vs. 5% overall) and business/professional services (20% vs. 14% overall)

· Two thirds of BME entrepreneurs identified self-confidence as an obstacle to success, while just over eight per cent said racism.

· This may be as a result of family support - which 63 per cent cited as a reason for their success.

· BME entrepreneurs now account for 11 per cent of all new business.

· Fewer BME entrepreneurs were involved in the leisure/personal services or in production/manufacturing.

Free copies of the report Black and Minority Ethnic Entrepreneurs is available to download from the Barclays website at www.business.barclays.co.uk

ABOUT BARCLAYS

Barclays is an international financial services group engaged primarily in banking, investment banking and asset management. In terms of market capitalisation employed, Barclays is the third largest financial services group in the UK and provides services to 730,000 businesses, primarily in the UK.