Entrepreneurship is one of the most important trends in the business world today. Although the technological revolution has dominated it, the facts show that in number, traditional businesses still dominate the landscape. And, Latino-Owned businesses highlight in this context.

In the United States, it is evident. According to an investigation led by Stanford Latino Entrepreneurship Initiative, and named “State of Latino Entrepreneurship”, released last April, “the United States is home to more than 63 million Latino/as, making up 19% of the country’s population. With a collective economic contribution of $3.2 trillion and ownership of nearly 5 million businesses generating more than $800 billion in annual revenue, the Latino/a community serves as a prominent consumer base and a growing force in economic development.”

The study reveals that “Latino/a-owned employer businesses (LOBs) continue to grow at a faster pace than White-owned employers businesses (WOBs) in terms of revenue, number of businesses, employees, and payroll. Between 2007 and 2022, the United States experienced a 57% growth in the number of LOBs, substantially surpassing the 5% increase in the number of WOBs during the same period. The number of employer LOBs surged from 295,000 in 2007 to 463,000 in 2022, whereas the number of employer WOBs modestly increased from 4.1 million to 4.3 million in the same timeframe”.

The growth opportunities are evident. However, it is necessary to overcome some challenges that prevent better performance.

The first one is the scale: perhaps the rising number of Latino-owned businesses in the United States hasn’t been able to become bigger.

The other considerable problem is related to the margins: it is hard to achieve better net incomes.

Why and what must be done to get a better business ecosystem for them?

Some barriers hit hard

The cited study has four conclusions.

• One of the most important issues is to enhance access to capital. “Creatively tailored financial products and services could bridge the gap, particularly for smaller operations and those facing the highest barriers such as Latina entrepreneurs and tech-centric firms”, explains the investigation.
• Small and medium Latino businesses could get more access to corporate and public sourcing and procurement services. Becoming bigger suppliers can be a path of growth. According to the study, “developing programs aimed at aggressively increasing the participation and contract size among Latino/a-owned businesses – especially immigrant and female-owned– in government and corporate contracting has the potential to ameliorate the revenue gaps experienced by these two groups of entrepreneurs. Making the contracting process accessible and more equitable, and providing targeted training on bidding for contracts can help Latino/a and minority-owned businesses tap into new growth opportunities”.
• Getting more innovation and technology opens doors to operational consolidation. One of the findings is that the adoption of Artificial Intelligence, for instance, is led by Latino/a-owned businesses that generate $1M or more in annual revenues and are primarily engaged in selling or developing technology or software products and related services (tech-centric). “More employer firms can benefit from innovative approaches to enhance business operations. Hence, encouraging and facilitating the broader implementation of AI and other technologies among Latino/a-owned firms can propel them to new heights of competitive advantage. Programs offering technological guidance, resources, and funding can ensure these businesses continue to lead in innovation,” said the study.
• Finally, diversity is another success factor. “Recognizing the varied experiences of women, tech-centric businesses, and immigrant entrepreneurs within the Latino/a community can help create targeted support structures to address their specific challenges. Initiatives that provide mentorship, networking, and educational resources tailored to these subgroups can promote a more inclusive entrepreneurial ecosystem, leveraging the full spectrum of Latino/a entrepreneurship for enhanced economic growth.

In conclusion, a mix of access to capital, technological implementation, open doors in contracting with public institutions and great corporations, and diversity, could lead to an economic boom in Latino-owned businesses. The path is clear.

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