By Pam O’Brien
There are approximately five million Hispanic- and Latin-owned businesses in the U.S.
And those businesses are booming, according to Lantern by SoFi’s recent survey of 1,000 U.S. Hispanic and Latin business owners. In fact, more than two-thirds of survey respondents report that their companies are doing the same or even better than they did before the pandemic.
But even as Hispanic- and Latin-owned businesses thrive, respondents report that some roadblocks remain. For instance, half of the Hispanic business owners surveyed say they face prejudice from their customers and from other business owners. Some 40% need a second job in order to make ends meet.
Yet despite the obstacles, Hispanic business owners say they would still encourage their peers to pursue their entrepreneurial dreams. So, how do Hispanic- and Latin-owned businesses flourish even in tough times? The data below speaks for itself.
Before diving into the data, here’s some information on the 1,000 interviewed candidates:
- 60% identified as female, 40% as male
- 62% founded their own business
- 56% are sole proprietors with 44% of them having at least one partner
Candidates from all kinds of businesses were interviewed, but the top business types owned were:
- Retail: 22%
- Fee-for-service: 17%
- Manufacturing: 11%
- Food Industry: 7%
- Subscription: 6%
Seizing the Opportunity
Despite difficulties posed by the pandemic, Latin- and Hispanic-owned businesses are thriving. Seventy-two percent of survey respondents say their business is doing the same or even better than it did before COVID-19.
While some companies shuttered during the pandemic, a significant number of Hispanic- and Latin-owned businesses launched during that time. In fact, one-third of the Hispanic and Latin business owners surveyed started a business during or after the pandemic.
For some of the one-third of respondents who chose this answer, it was a necessity: 30% took the plunge because they could no longer pay their bills and needed an additional source of income. But for just as many, pursuing a dream was the driving factor. Thirty percent said they launched their companies because they “realized life is short and decided to pursue a passion.”
Of Hispanic and Latin business owners with household incomes above $125,000, 36% said the pandemic gave them additional resources to work with, such as stimulus checks and more time to devote to their startups.
Securing the capital to start a business is often difficult for Hispanic and Latin business owners, according to a recent report from the Stanford Graduate School of Business. Almost half (49%) of survey respondents said they used their personal savings to help start or acquire their businesses. And 29% used family savings to help get their business off the ground.
For a significant number of survey respondents, owning a business doesn’t generate enough income—almost 40% have a second job. That includes 44% of Hispanic and Latin business owners who are 24 and younger.
Social Media Makes a Difference
Promoting their business was the most challenging aspect of starting it, survey respondents report. So how do they get the word out? Most Hispanic and Latin business owners (57%) say they use social media to publicize their business. Thirty-seven percent have a website and 31% rely on listings on online marketplaces to help draw customers in.
Paying it Forward
Supporting their community, culture and heritage is a priority for Hispanic and Latin business owners. As a bonus, doing good work often allows them to promote their companies at the same time.
How they give back:
- 34% encourage other businesses to work with Hispanic and Latin businesses and communities.
- 33% try to educate their customers and the public about Hispanic and Latin heritage.
- 33% sponsor or participate in Hispanic and Latin community events or groups.
- 29% contribute to Hispanic and Latin programs or causes.
- 22% seek out other Hispanic- and Latin-owned businesses to work with.
Their Best Business Advice
Despite the challenges they may face as business owners, survey respondents encourage others to pursue entrepreneurship. These are the words of wisdom they would pass along to those hoping to start Hispanic- and Latin-owned businesses:
Rise above prejudice and racism:
- “Don’t be afraid and don’t let racism discourage you.”
- “If you can, go for it. You will face racism, but don’t let that deter you from chasing your dreams.”
Be proud of your heritage and promote it:
- “Admire your heritage, no matter what people say. Be proud of what you do and who you are.”
- “Embrace your cultural heritage and leverage it as a unique selling point in your business.”
- “Do what you love and express your culture.”
Despite some challenges, many Hispanic- and Latin-owned businesses are flourishing post-pandemic. Most are doing the same or even better than they did before, according to our survey. Hispanic and Latin business owners take great pride in their heritage and they use their businesses to give back to their communities and raise awareness of their culture.
To view the full report, visit https://lanterncredit.com/small-business/survey-of-hispanic-owned-businesses.