Among the greatest strengths of the United States is its diversity. One group that has become vitally important to our country is the Hispanic community. Since 1970, they have grown from 9.6 million to nearly 64 million people.1 Latinos are currently the second biggest population in America and continue to be one of the fastest growing. According to the U.S. Census, the Hispanic population has grown over 80% since 2020 alone.
Latinos start 82% of all businesses in the United StatesSOURCE: U.S. Hispanic Chamber of Commerce
“With such sizable and rapid growth,” the Pew Research Center declares, “U.S. Latinos have shaped the nation’s demographic story for several decades.” Further, there are now nearly 5 million Hispanic-owned businesses, which account for 10% of all those in America.2
These businesses make an enormous impact on the U.S. economy, so we celebrate their contributions, explore the many challenges Hispanic business owners face, and where entrepreneurs can turn for resources and support.
In case there’s any doubt over who is starting new businesses in our country, the U.S. Hispanic Chamber of Commerce offers some mind-blowing statistics. Latinos currently start a whopping 82% of all businesses in our country. Let’s repeat that – 82% of all new businesses. They’re also opening those businesses at a rate that’s three times the national average. That means they’re growing in revenue and creating more jobs than any other ethnic group, including white-owned businesses. And the nearly 5 million Hispanic-owned businesses currently contribute $800 billion dollars to the economy3 and employ 2.9 million people.2
Dr. Jerry Porras – Professor Emeritus at Stanford University Graduate School of Business and co-founder of the Latino Business Action Network – declares:
“To put this in a wider perspective, in 2020 U.S. Latinos generated approximately $2.8 trillion in GDP (13% of U.S. GDP). If U.S. Latinos were a country, it would be the fifth largest GDP in the world, growing faster than the U.S. economy.”
Hispanic-owned businesses are excelling in a wide range of industries. An October 2022 report from Hello Alice (sponsored by the Latino Business Action Network, U.S. Hispanic Chamber of Commerce, and Square) showed that the majority of Latino businesses – nearly 15% – are in retail and e-commerce. This includes everything from convenience stores to clothing boutiques. These businesses are often the cornerstones of their local communities.
Retail is closely followed by beauty and wellness (11.27%), food and beverage (11.18%), and professional business services (10.15%).
“If U.S. Latinos were a country, it would be the fifth largest GDP in the world, growing faster than the U.S. economy.”Dr. Jerry Porras
Co-founder, Latino Business Action Network
Another industry that boasts a high number of Hispanic-owned businesses is technology and IT services. Latino entrepreneurs are increasingly establishing businesses in this sector, including IT consulting, software development, web design, and digital marketing. In fact more than 10% of Latino-owned employer businesses are in the tech field.
Even so, says Dr. Porras, “less than 1% of all VC funding [for tech businesses] in 2021 went to Latinos.” This illustrates just one of the challenges that exist and can prevent Hispanic entrepreneurs from reaching their full potential. Discrimination and bias are at the heart of barriers that include:
- Access to capital
- Loan approval
- Securing bigger contracts
The pandemic is something else that disproportionately impacted Latino businesses. Already at the start of the pandemic in March 2020, more than 4 out of 5 Hispanic-owned businesses reported a debilitating hit because of the economic crisis.4 And many are still in the process of recovering, especially because of the subsequent economic downturn and inflation.
Clearly Latino entrepreneurs face unique challenges that impact their ability to start and grow successful businesses. Thankfully there are resources and support available. We all have a stake in helping these businesses succeed. “Our country stands to gain considerably from the growth of these businesses founded by inventive and resilient entrepreneurs who are determined to succeed,” asserts Dr. Porras.
Here are some resources:
Latino Business Action Network (LBAN)
The LBAN is a Silicon Valley-based nonprofit with a mission to strengthen the U.S. economy by empowering Latino entrepreneurship across the country.
The USHCC fosters Hispanic economic development and helps create sustainable prosperity for the benefit of American society.
Accion empowers small businesses by funding and growing companies in underserved communities.
Small Business Administration (SBA)
The SBA exists to help small businesses in every way, and currently has proposals in the U.S. Congress that call for new initiatives to reduce barriers to business ownership and growth.
- 8(a) Business Development program
A specific program under the SBA that offers a broad scope of assistance to firms that are owned and controlled at least 51% by socially and economically disadvantaged individuals.
- HUBZone program
Another SBA program that fuels small business growth in historically underutilized business zones by awarding at least 3% of annual federal contract dollars to HUBZone-certified companies.
- Women-owned Small Business (WOSB) Federal Contracting program
The federal government’s goal is to award at least 5% of all federal contracting dollars to women-owned small businesses each year, so this program is designed to provide greater access to contracting opportunities for WOSBs.
- SCORE Hispanic Business Owners Hub
SCORE’s mission is to foster successful small business communities through mentoring, education, and ongoing support to owners.
At Meraki Go, we also consider ourselves partners in your small business and are always offering information on our blog that you may find helpful. Some articles include:
- 5 Steps to Starting a Business
- 6 E-commerce Options to Boost Your Business
- Different Kind of Hybrid: Way WiFi Empowers Retail Small Businesses
- WiFi 101: Networking Basics from Modems to Switches
- 6 Steps to Stay Secure in the Cloud
Hello Alice “The Hispanic Small Business Economy” report October 2022
(3 and 4) Joint Economic Committee Hispanic Entrepreneurship Brief
Latino Business Action Network (LBAN)
(1) Pew Research Center
(3) Small Business Administration (SBA)
Stanford Latino Entrepreneurship Initiative (SLEI)
Stanford Graduate School of Business
(2) U. S. Census Bureau
U. S. Census Bureau - Annual Business Survey (ABS) 2021
(3) U. S. Hispanic Chamber of Commerce