National Small Business Day: Hispanic businesses offer great potential for the economy

For more than 60 years, the country has recognized the work of small businesses and their impact on society. For this reason, May 10 is commemorated as National Small Business Day. And although the work of all Americans is celebrated, it is important to highlight the work of Hispanics who offer great potential for the U.S. economy.

According to the Hispanic Chamber of Commerce, there are at least 5 million Hispanic-owned businesses in the country that, combined, contribute more than $800 billion to the U.S. economy each year. The work of Latino entrepreneurs has been highlighted by media outlets such as Bloomberg, which has detailed that, despite facing difficulties, many of the Hispanic small businesses have managed to overcome obstacles and achieve success.

"The positioning of Latino brands in the United States has taken decades and in their consolidation they have had to overcome different challenges in their strategy, depending on a series of variables that range from the target audience to the industry to which they are dedicated," explained Bloomberg.

In the meantime, those efforts are reflected in the data. It recently came to light that there has been a huge growth in Hispanic entrepreneurship in the United States. According to a report by the The Wall Street Journal citing the Census Bureau, Latino startups accounted for 36% of launches last year compared with 25% in 2019.

In this regard, WSJ noted that "for many immigrants, entrepreneurship is a matter of necessity." It also explained that although these are generally family businesses, there has also been an increase in those companies that are backed by venture capital. "While Latino-owned businesses are mostly mom-and-pop operations, they also include venture-backed firms. Venture-capital-backed startups with Hispanic founders tend to be concentrated in financial services, healthcare, commerce and shopping, according to Crunchbase, which estimates that these firms receive less than 5% of venture funding," WSJ indicated.

America ‘need[s] to do a better job of supporting these companies’

Mario Rodriguez, vice president and sales director of Minority Business Development at PNC Financial, notes that this growth of Hispanic people with small businesses is a challenge for financial firms, which, in his opinion, should support entrepreneurs more. He is convinced that this will not only help businesses to succeed, but will also benefit society.

"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 ... 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," said Rodriguez in an interview published by PNC in 2023.

PNC also detailed that, according to a survey it conducted among Hispanic entrepreneurs, they "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). They are likely to own very small businesses, with 94% reporting 10 or fewer employees and 78% reporting annual revenue of less than $100,000."