This post originally appeared on startupnation.com/start-your-business
As of 2018, the U.S. Hispanic Chamber of Commerce reported that about 4.4 million Latino-owned businesses in the U.S. contribute more than $700 billion to the economy annually.
A briefing from Geoscape noted that Hispanic-owned businesses have grown 27.5 percent since 2002, double the growth rate of all U.S. firms, which are estimated at 12.3 percent.
As the startup landscape changes and the Latino entrepreneurship market moves the change forward, how are these businesses, big and small, leaving their mark?
Here’s how Hispanic entrepreneurs, and their startups, are making a big impact on small business.
Hispanic firms are spread out all over the country
The report, “State of Latino Entrepreneurship 2018,” published by the Stanford Graduate School of Business, states that nearly 70 percent of scaled Latino firms are located in California, Texas, New York and Florida. Despite the high concentration in these fast-growing states, the report also notes that business growth for firms is not limited to just Latino neighborhoods.
On average, 8 percent of Latino-owned businesses surveyed are technology companies, such as those that develop and sell technology or software.
They’re combating business stereotypes
While refuting stereotypes, the Stanford study also found that Hispanic-owned businesses are skewing toward a younger demographic. Close to half of Latino owners are millennials between the ages of 18 to 35. Almost half have a four-year college degree, and this number only increases for owners of scaled firms — two-thirds of which have owners with college degrees. Less than one-quarter of Latino firms are in construction industries, with fewer businesses in hospitality or leisure.
Three-quarters of Latino business owners have also founded their businesses on their own rather than seeking out loans or outside investors. As noted in the Stanford report, the most common means of self-financing at both startup and growth stages is their personal savings or funding from family and friends. They enjoy online banking (two times more likely to do it than those who are not entrepreneurs) and are 60 percent more likely to invest in mutual funds than their counterparts.
Above all, these entrepreneurs are passionate about their ideas
One of the biggest reasons why Hispanic-owned businesses have been on the rise, apart from the financial reward, has been scaled and unscaled Latino firm owners are naturally inclined toward entrepreneurship. They’re in business because they have a vision for a product or service that can better the lives of others and want to bring it to life.
Careful planning and hard work along the way will allow the business to be successful, grow, and eventually be passed down to their own children. It’s an exciting time to see young entrepreneurs start their own businesses throughout the country and to see how the landscape continues to be impacted by the next generation that inherits these startups as well as continues to establish their own original ones.
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