America’s Hispanic entrepreneurs have been on a tear.
There are now more than 3.1-million Hispanic-owned businesses in the U.S., an increase of nearly 40 percent since 2007 and double the number recorded in 2002. And despite the lingering weakness from the Great Recession that began at that time, revenue at those companies jumped 30 percent to a projected $468 billion for 2013.
That’s according to a new study by the U.S. Hispanic Chamber of Commerce and Geoscape, a Miami-based demographics-intelligence company. Drawing on an analysis of data from the Census Bureau, the Department of Commerce, and proprietary resources, the researchers found the rapid growth in America’s Hispanic population is being reflected across the U.S. business landscape. There were about 52 million Latinos in America in 2012; they make up 17 percent of the nation’s population, according to the Pew Hispanic Center and Census figures.
Among the findings of the report:
Hispanics are more likely to be self-employed when compared to the general U.S. population. Some 9.1 percent of Hispanics are self-employed; that number tops at 7.8 percent for all of America, according to statistics from Geoscape and the market research company Scarborough.
The study predicts that the region it dubs the South Atlantic—which includes the states Florida, Georgia, South Carolina, North Carolina, Virginia, West Virginia, and Maryland—will surpass the Pacific states this year in terms of the number of Hispanic-owned businesses, for the highest concentration in the U.S. The Pacific division—California, Hawaii, Oregon, Washington, and Alaska—is estimated to have 795,839. The South Atlantic is projected to have 866,000.
The region with the highest rate of growth between 2007 and 2013 is the study’s East South Central states—Kentucky, Tennessee, Alabama, and Mississippi—with a 59 percent increase in Hispanic-owned businesses. The South Atlantic followed, with 52 percent.
Nearly 30 percent of Hispanics who identify themselves as small business owners earn more than $100,000. Comparatively, 20 percent of all U.S. households earn more than $100,000 in annual household income.
The USHCC and Geoscape teamed up to investigate the health of this market as each struggled to fill the gaps left by standard measures, says Thomas Verna, vice president for marketing at Geoscape. The U.S. Census does a Survey of Business Owners every five years, with 2007’s readings released in 2010. Data taken last year won’t be made available until 2015.
“We felt the need for this data was clear and necessary,” says Verna who adds that the data draws a very positive picture for young Hispanic entrepreneurs, not just in the typical business segments, but in other more meaningful areas as well, such as technology, creative arts, retail, and consumer goods. “We believe there is a new rebirth and succession plan for American businesses that will include innovation and entrepreneurship from many different segments of our multicultural population.”
Geoscape further broke down the numbers according to an internal marketing metric that categorizes the Hispanic Americans into five demographic segments, each defined by the degree to which members “have adopted American culture, language, and traditions.” (For more on these segments, download the company’s breakdown here.)
Among those groups, Geoscape found 57 percent of Hispanic business owners were bilingual and bicultural. But some 26 percent of the entrepreneurs were classified as those who a) preferred to speak Spanish, b) immigrated as an adult more than 10 years ago, and c) follow Hispanic cultural practices. The findings track a recent Gallup World survey that found newcomers were more likely to possess entrepreneurial characteristics than native-born residents in high-income economies.
Verna says Geoscape analysts weren’t surprised by the South Atlantic’s new dominance in the Hispanic-owned business numbers. “Here in Florida, there has been a significant growth in South American immigration and with that has come a significant influx of capital, resources and ambition,” he says. But he also pointed to California, where the growth in various Asian populations has brought similar resources to the business communities there, offering a different picture of small business opportunity.
It’s a level of growth that’s becoming impossible for the wider economy to ignore, says Javier Palomarez, president and CEO of the USHCC. “Oftentimes, the Hispanic business community has been viewed as a separate entity,” he says. “While we are proud of being businesses who happen to be Hispanic, we are first and foremost American businesses. Every tax bill we pay, every job we create, every product we manufacture and every service we provide goes to benefit the American economy.”