Latino-owned businesses are thriving in the United States, according to the latest reports Lantern by SoFi Surveya financing company, for 1,000 Latino business owners in the country.
In the United States, there are approximately five million Hispanic-owned businesses in operation, playing an important role in the American economy.
More than 66% of respondents reported that their businesses are doing the same or better than before the COVID-19 pandemic.
Although most Latino-owned businesses grow in the United States, some participants indicated that they face bias from their customers and other business owners.
About 40% of respondents said they needed a second job to make ends meet. However, Hispanic business owners say they would encourage their peers to pursue their entrepreneurial dreams.
How Hispanic and Latino-Owned Businesses Thrive?
The Lantern by SoFi survey focused on Hispanic and Latino business owners to learn how they created and run their businesses, the challenges they faced, and advice they have for future business owners.
To achieve this, the team surveyed more than 1,000 Hispanic and Latino business owners in the United States to develop the 2023 State of Hispanic and Latino Business Owners Survey.
54% of respondents indicated that the main challenge hindering the growth of Hispanic/Latino businesses is high input costs due to inflation.
41% of Hispanic/Latino business owners employ siblings, followed by cousins (27%) and parents (23%).
Hispanic/Latino business owners commonly report using personal savings to start their businesses. However, higher-income taxpayers report using more diverse financing sources, for example, a mortgage line of credit, a business loan from a bank, among others.
More growth for Latin companies
Of the Hispanic and Latino business owners who participated in our survey, 60% were women and 40% were men. While 62% stated that they had established or started their own business. 56% of them are sole proprietors, while 44% have at least one partner.
Despite the difficulties posed by the pandemic, Latino and Hispanic-owned businesses are thriving. 72% of respondents said their business is doing the same or even better than it was before COVID-19.
What types of businesses do Latinos own most in the United States? According to the survey, retail trade ranks first at 22%; followed by service companies at 17%; manufacturing, 11%; Restaurant and food services, 7%; Subscription companies by 6%.
6% of Latino businesses in the U.S. are affiliates, that is, when they sell a product or service online; 5% are franchisors or franchisees; 4% of those products are service businesses, such as laundry; 4% of distribution companies. Rent and rent at 3%.
The American dream
Although some Latino businesses have closed during COVID-19, many have opened during this time of health and economic crisis.
A third of Hispanic and Latino business owners surveyed said they opened their businesses during or after the pandemic.
Some of them indicated that the pandemic led to their inability to pay their bills and they needed a source of income, which is why they opened their own business.
For many, pursuing a dream was the deciding factor in starting entrepreneurship. 30% indicated that they launched their companies because they “realized that life is short and decided to devote themselves to a passion.”
Among Hispanic and Latino business owners with household incomes of more than $125,000, 36% said the pandemic gave them additional resources to work with, such as stimulus checks and more time to customize their startups.
To read the full survey, go here connection.