Latino entrepreneurs are a powerful driver of US economic growth

With a 2015 population of 57 million, Hispanics/Latinos make up about 17.6 percent of the U.S. population. And with 4.2 million Hispanic-owned businesses contributing more than $668 billion to the American economy each year, they are also a key driver of economic growth in the United States. In fact, data shows that Hispanics continue to experience a higher rate of self-employment than the general population at large. A 2015 study showed that the number of Hispanic/Latino entrepreneurs grew a whopping 57 percent between 2007 and 2015.

The numbers are even stronger when looking at Latina entrepreneurs. A 2016 State of Women-Owned Businesses report showed that since 2007 the number of Latina-owned businesses increased by 137 percent. The report showed that there are 1.9 million Latina-owned firms in the U.S., generating more than $97 billion in revenue each year.

Latinos as entrepreneurs

A study by the Kauffman Foundation found that Latino/Hispanic immigrants are twice as likely to engage in business and entrepreneurship as native-born Americans. Why? Here are a few reasons.

• A large market: Although growth of the Hispanic/Latino population in the U.S. has slowed by nearly one-half over the last several years, the market is still 57 million strong. Many Latino entrepreneurs target their products and services to other Latinos to capitalize on cultural needs that are not met by mainstream businesses.
• Focus on building long-lasting relationships. Latinos are known for their strong focus on personal connections and relationships, and this extends to the way they treat their business customers. In interviews, many Latino entrepreneurs say that it’s important for them to take the time to get to know their customers, try to establish some connection, and even socialize. This attitude helps Hispanic entrepreneurs maintain their customer base, easily form ties and agreements or build strong business partnerships.
• Giving back to family and community. The strong family and community orientation of the Latinos has also served to benefit their businesses and the Hispanic community at large. The practice of giving back to family and community has made possible, for example, increased opportunities for mentoring of young Hispanic entrepreneurs. Giving back, whether it’s through a monetary donation or by serving in the board of a community organization, also contributes a more positive image of the business and promotes public trust and support.
• Just-go-for-it attitude. The Hispanic immigrants who first came to the United States did not have easy lives. Battling discrimination and the fears of deportation, many of them had to be gutsy, fearless risk-takers just to survive. It’s this same fearless attitude that has made Latinos successful in business. Their go-big and just-go-for-it attitude is what pushes them to set up a business even with the lack of business knowledge and capital, or what drives them to expand even with a tough competition.

The role of Hispanic businesses in the growth of the U.S. economy cannot be discounted. In fact, given their strong growth and influence not just among Latinos, but on mainstream society too, the overall small business community of the U.S. is dependent on the Hispanic small business community. A Stanford University study showed that in today’s dollars, Latino-owned businesses have the potential to add $1.4 trillion to the U.S. economy. Indeed, the Hispanic community’s small businesses do not appear so small at all.