Hispanic owned businesses across the United States are growing more than twice the national average since 2007, according to a new report.
The Hispanics in Business 2014 study, by Geoscape, says Hispanic owned businesses will grow to 3.22 million by the end of 2014 and exceed $486 billion in annual revenue. The number of Hispanic businesses has increased 43 percent since 2007, the rate of all U.S. businesses increased 18 percent during the same period, and revenue that year was $358 billion.
The growth is significant, the report's authors say, because it shows that Hispanics are increasingly becoming a major source for employing America's workers and thereby becoming even more pivotal to the health of the U.S. economy.
"The Non-Hispanic population is older, retiring disproportionate to younger Latinos," said Cesar Melgoza, CEO and founder of Geoscape. "So as we baby boomers age and continue to retire then greater reliance of Latino businesses will be a fact of life. So as we move forward it becomes everyone's business that Latinos do well.”
The study suggests the growth is based on, among other things, better digital connectivity, the fact that Latinos use their smart-phones more than anyone else, allowing for "easier promotion and dissemination of great ideas." Lower barriers to entry and easier access to capital are also credited l for helping foster Latino business growth. Though, still a major issue for entrepreneours, Melgoza says banks like Wells Fargo and Bank of America are doing a better job giving lines of credit to Latino business entreprenours.
Hispanics are more likely than any other ethnicity to start a business, and that spark for entrepreneurship, may actually be an unintended positive consequence from a lack of opportunities in Corporate America.
"When other doors are not open for Latinos in corporate America then we tend to become entreprenours," Melgoza said. "Sometimes our networks aren’t as extensive. You don’t have family in the good paying jobs, it's much less of a good old boys network, so entrepreneurship, is sometimes, the only path toward prosperity."
While there are more new Latino business owners, the challenge, experts say, is making sure these businesses not only stay viable but grow.
And for that to happen, policy makers need to specifically address the needs of Latino business owners, Melgoza explained to Fox News Latino. The need for training Latino business owners on financial management, human resources, strategy, operations becomes much more important - once a business owner establishes a viable business but once a business grows from a dozen employees and a few million dollars of revenue, new issues arise.
"That's where we may eventually run into roadblocks, to build a bigger business is much more complex. One thing policy makers should think about is making business training and financial management to entreprenours more accessible at the right language, time and costs," Melgoza said.
"It’s in everyone's interest. As soon as the baby boomers retire, they are going to want to know who is going to pay for this? We need to root for these Hispanic businesses so that they can continue to employ there grandchildren."