The number of businesses owned by Hispanic entrepreneurs has grown significantly in recent years, despite the obstacles they face, such as limited access to financing. Hispanic businesses are strengthening in the U.S. , as is the contribution of this population to the country's economy.
Contribution of the Hispanic Workforce
Latinos are the largest minority group in the United States, and their contribution to the workforce is growing. Studies support this community's contribution to the country's economy. They are the second-largest workforce , and the Gross Domestic Product generated by this population grew from $1,38 trillion in 2012 to $2,13 trillion in 2015, according to figures from the Latino Donor Collaborative.
Hispanics have a high rate of youth joining the workforce in the coming years. Thus, it is estimated that the number of workers of Latino origin will continue to increase. But their contribution to the Gross Domestic Product is not only due to the number of people, but also to the quality of their training.
The Peterson Institute for International Economics estimates that the contribution of Hispanics will continue to increase over the next two decades. And, furthermore, he predicts that they could contribute to the growth of the United States' GDP more than the non-Hispanic labor force.
In addition, the number of businesses owned by Latino owners has grown. And with this, there is also a greater demand for financial services and wealth management by this population.
Hispanic businesses strengthen in the US
Forbes magazine published figures demonstrating the growth of Hispanic-owned businesses. Among the most relevant data points is that the profits earned by these companies are twice the national average.
The Latino Business Report corroborates this fact and indicates that Hispanic companies in the United States exceed the growth rate of those that belong to other groups. There is even a significant increase in the number of companies owned by women.
Along with the increase in the number of Hispanic-owned businesses, this population is also seeking more financial advice. The reason is that they need more planning to keep their businesses growing.
Financing is the challenge of entrepreneurs
With this trend, opening a business in the United States is encouraging for Hispanics. However, it is necessary to mention the obstacles that are presented at the time of undertaking.
The main problem they face is the difficulty in accessing financing . Although they are the group with the most growing companies, they have the least access to bank loans.
This poses the challenge of improving financing for Latino entrepreneurs. As well as access to other resources that allow them to start and grow their businesses.
Latino consumer potential
The Latino population in the United States exceeds 50 million people. Projections indicate that by 2030 there will be more than 70 million. This makes them a potential consumer that companies must dedicate themselves to knowing to satisfy their needs.
One of the main characteristics of the Hispanic consumer is that they come from diverse cultural backgrounds, so consumption patterns vary within the community depending on their country of origin. Businesses face the challenge of understanding these differences in order to leverage the potential of these customers.
Latinos' ties to their culture are strong. Although younger people, especially those born in the United States, have better adopted the customs of the country, there is still an important difference between the Hispanic consumer and the other communities.
Hispanics prefer companies that speak their language and many companies have understood it that way. So they understand that to reach this market they must speak the same as them. And they also have to adapt their products and services to what these consumers expect.
Latino Entrepreneurs Must Get Closer to Their Community
Hispanic entrepreneurs, too, should be concerned with better understanding their own community. This will allow them to get closer to them and generate an offer that meets their needs.
Hispanic consumers demand products and services that align with their existing knowledge. Cultural differences are reflected in their tastes and needs, as well as in their purchasing patterns, which differ from those of other demographic groups.
By understanding what our own community expects, it will be possible to maintain better relationships with its members. In this way, bonds are created that, over time, benefit the company, consolidating its position in society.
While Hispanic-owned businesses are growing stronger in the US, they face many challenges to achieve success. However, the potential is there, and it must be harnessed. Learn more about successful entrepreneurs in our digital magazine.
