Latino entrepreneurs account for 82% of new business startups in the U.S. today, with Latino companies opening at three times the rate of businesses overall, according to the U.S. Hispanic Chamber of Commerce (USHCC). In total, the Hispanic business community comprises more than 5 million companies.

Though these businesses generate a sizable $800 billion annually for the national economy, they have the potential to generate much more. Specifically, says the USHCC, if Latino businesses were to match the sales of the average non-Latino business, the U.S. economy would stand to gain a $1.5 trillion boost.

“When you recognize the potential impact of the Hispanic business economy not just in the U.S. but globally, it becomes clear that we, as business partners and individuals, need to do a better job of supporting these companies and their leaders,” says Mario Rodriguez, vice president and Minority Business Development sales director at PNC. “Promoting greater access to resources, capital, technology and more will not only strengthen the Latino communities, but also empower Hispanic-owned businesses to scale and grow.”

Survey Uncovers Who Latino Business Owners Are and What Concerns Them

With the intent of better understanding the needs, challenges and successes of the Hispanic business community, Hello Alice, with partners USHCC, Square and the Latino Business Action Network (LBAN), conducted a survey of small business owners in late 2022. The resultant Hispanic Small Business Economy report includes interesting data points, as well as insights into the challenges and opportunities that are top of mind for these entrepreneurs.

To the first point, Hispanic small business owners:

  • Represent every adult age group, with 54% younger than 40 and 46% 40 or older. 60% are female, 38% male and 1% gender-nonconforming (the remaining 1% preferred not to answer).
  • Are likely to own very small businesses, with 94% reporting 10 or fewer employees and 78% reporting annual revenue of less than $100,000.
  • Frequently lead newly established businesses, with most (62%) founded in the past five years.
  • Are more likely than the overall business owner population to operate in the food and beverage (11%), professional business services (10%) and construction (6%) industries. The top industry for Hispanic small businesses is consumer goods/retail/e-commerce, with 15% of businesses falling into this category.

To the second point, the following issues are top of mind for Hispanic business owners:

Raising capital and growing the business:

When asked about their greatest business challenges, Hispanic business owners most commonly cited raising capital (30%) and growing their businesses (24%). Inflation, which 89% of respondents said is impacting their companies, exacerbates these challenges, as does the need for more readily accessible financial education.

“One of our focuses at PNC is to empower Latino business owners with knowledge about the various stages of business growth so they understand the best course of action at any stage in their company’s development,” explains Rodriguez. “We also work to connect entrepreneurs with funding opportunities, whether within our own organization, or with microlenders or other organizations dedicated to the startup segment.”

Technology solutions to support day-to-day operations and business growth:

As technology continues to play a growing role in how businesses run, Latino small business owners are looking for software solutions that help drive efficiency and growth. Nearly all — 96% — of small business owners reported that they are either always on the lookout for the latest technology solutions or are open to new technology solutions that improve their processes.

“Technology can help entrepreneurs streamline their day-to-day operations, expand their capabilities and scale their businesses for the long term,” says Rodriguez. “As their trusted advisors, we have the responsibility to understand where their business is now and where they want to go; then we can recommend tools to help them reach those goals. PNC, for example, offers technology solutions related to automating ordering processes, accepting credit and debit card payments, and managing and forecasting cash flow and inventory.”

Looking toward the future, Rodriguez concludes, “As more and more business partners and advisors step up to support Latino small business owners by sharing solutions, we will help accelerate the growth and success of not only the Latino business community but the U.S. economy overall. The better we understand the challenges and goals of these passionate business leaders, the sooner we can help them reach their amazing potential.”