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w w w.g e osc a p e.co m
Tel: 888.211.9353 • Email: info@geoscape.com • www.geoscape.com
Tel: 888.211.9353 • Email: info@geoscape.com • www.geoscape.com
Hispanic-owned businesses represent a strategic growth opp...
Tel: 888.211.9353 • Email: info@geoscape.com • www.geoscape.com
The United States Hispanic Chamber of Commerce (USHCC), th...
The number of Hispanic entrepreneurs
in the U.S. has grown exponentially
over the past two decades, fueling the
economy du...
Tel: 888.211.9353 • Email: info@geoscape.com • www.geoscape.com 05
In sheer numbers, the fastest growing states for Hispan...
Tel: 888.211.9353 • Email: info@geoscape.com • www.geoscape.com 06
Hispanics in
Business Report
Hispanic Small
Business Ow...
The Impact of Hispanic Businesses
on the Financial Sector
In recent years, Hispanics have generated tremendous
growth oppo...
Tel: 888.211.9353 • Email: info@geoscape.com • www.geoscape.com 08
Hispanics in
Business Report
Though they may have more
...
THE CONTRIBUTION OF
HISPANIC-OWNED BUSINESSES
TO THE U.S. ECONOMY
*Nielsen Scarborough USA 2016 Study Release
Hispanic bus...
Sources
Geoscape, American Marketscape DataStream,Series 2016
Nielsen Scarborough, USA+R1 2016
Kauffman Index Startup Acti...
Tel: 888.211.9353 • Email: info@geoscape.com • www.geoscape.com
Geoscape 2016 Hispanic Business Report
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Geoscape 2016 Hispanic Business Report

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Hispanic-owned businesses represent a strategic growth opportunity within the U.S. economy. This is why Geoscape produces this annual report.

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Geoscape 2016 Hispanic Business Report

  1. 1. w w w.g e osc a p e.co m Tel: 888.211.9353 • Email: info@geoscape.com • www.geoscape.com
  2. 2. Tel: 888.211.9353 • Email: info@geoscape.com • www.geoscape.com Hispanic-owned businesses represent a strategic growth opportunity within the U.S. economy. That is why Geoscape produces this annual report. As the non- Hispanic white population ages, retires and depends increasingly on social security and pensions, Hispanic entrepreneurs will begin to bear more of the burden to thrust the economy forward. Hispanic entrepreneurs are more youthful, connected digitally and more socially engaged than non-Hispanics overall. However, this asset must not be neglected; it is everyone’s business to support the prosperity of Hispanic businesses because the multiplier effect of their growth will need to fuel more American jobs and income in the years to come. In the face of difficult circumstances gaining employment in corporations, Hispanics create their own path to wealth through entrepreneurship – this is an American value that Hispanics embrace wholeheartedly. In this report, you’ll find that Hispanic businesses are growing at 2.5x the rate of all U.S. firms. You will also see that Hispanic businesses contribute nearly $668 billion in revenue to the national economy – this number will continue to increase. Additionally, in this report you will find that the regions of growth may not be those you would expect, as Hispanic households and businesses spread throughout the nation. We look forward to your comments so that we may continue to evolve this publication into a more useful resource that guides decision making at all levels. 02 Hispanics in Business Report César M Melgoza Founder & CEO E X E C U T I V E S U M M A R Y César M. Melgoza Founder & CEO
  3. 3. Tel: 888.211.9353 • Email: info@geoscape.com • www.geoscape.com The United States Hispanic Chamber of Commerce (USHCC), the country’s largest Hispanic business organization, advocates on behalf of these enterprises through our network of more than 200 chambers and business associations, as well as over 220 major corporate partners nationwide. The USHCC is proud to once again partner with Geoscape, one of the nation’s leading business intelligence firms, to launch the fourth installment of our Hispanic Business and Entrepreneurs report. While the economic contributions of the Hispanic business community have become clear, this annual study is critically important in conveying the impact Hispanic enterprises have on all aspects of our nation’s well-being, including household wealth and purchasing power. In this report – under the visionary leadership of its Founder and CEO, Cesar Melgoza – Geoscape has provided updated, unbiased data that highlights the burgeoning influence of America’s Hispanic businesses. The findings presented in the subsequent pages serve as a reputable source of information for policy makers, corporate executives, members of the media, and researchers who seek a complete and insightful understanding of the Hispanic market and its thriving entrepreneurial community. At the USHCC, while we are proud to advocate on behalf of business owners who happen to be of Hispanic descent, we never forget that we are first and foremost American businesses. Every tax bill we pay, every job we create, every product we manufacture and every service we provide goes to benefit our nation’s economy. The significance of this study, therefore, cannot be overstated. The insights presented in the report showcase the evolution of this vibrant entrepreneurial segment and make bold predictions of unprecedented growth in regions not traditionally associated with large Hispanic populations. Throughout all corners of the United States, Hispanic entrepreneurs play a crucial role in supporting the growth of local communities. They create American jobs, maintain our leadership in global markets, and contribute toward the mutual prosperity that makes America’s economy the greatest in the world. 03 Hispanics in Business Report Javier Palomarez President & CEO of the USHCC F O R E W O R D Javier Palomarez President & CEO of the USHCC
  4. 4. The number of Hispanic entrepreneurs in the U.S. has grown exponentially over the past two decades, fueling the economy during the recent recession and into the future. Hispanic immigrants in particular are now more likely to be entrepreneurs than the average member of the U.S. population overall. Based on Geoscape projections in this annual report, the number of Hispanic-owned businesses is expected to grow to more than 4.23 million this year, representing a continued impressive growth rate of 27.5% since 2012. The figure is more than double the growth rate for all U.S. firms. According to the same report, the growth rate for all U.S. firms between 2012 and 2016 is estimated at 12.3%. On the next page is a breakdown of the growth in Hispanic-owned businesses by state, indicating where the growth is occurring. THE CHANGING LANDSCAPE OF ENTREPRENEURS IN THE U.S. Changes in Ethnic Composition of Entrepreneurs As we witness the shift in demographics of the U.S. population, spurred by post-recession optimism about entrepreneurship, new data suggests the entrepreneurial landscape is shifting also. The most recent data shows the Hispanic share of all new entrepreneurs is 20.8%, compared to 10% a decade ago. Since Hispanics form 18.4% of the U.S. this fact indicates that Hispanics have a greater tendency to become entrepreneurs. Hispanics are the fastest growing portion of the workforce and are 1.5 times more likely than the general population to start a new business, according to the Kauffman Index of Entrepreneurial Activity. Tel: 888.211.9353 • Email: info@geoscape.com • www.geoscape.com 04 SOURCE: Kauffman Index Startup Activity National Trends Robert Fairlie, Arnobio Morelix, E.J. Reedy and Joshua Russell, 2015 Hispanics in Business Report
  5. 5. Tel: 888.211.9353 • Email: info@geoscape.com • www.geoscape.com 05 In sheer numbers, the fastest growing states for Hispanic entrepreneurial activity continue to be California, Texas and Florida fostered by considerably greater Hispanic migration and overall economic growth as compared to the rest of the country. The states of New York, Georgia, Arizona and Illinois have also experienced substantial business growth. Specifically between 19,500 and 51,500 Hispanic-owned firms were established there during this four year period. The number of Hispanic-owned businesses in South and Mid-Atlantic States, including Virginia, North Carolina and Pennsylvania support an ongoing trend that can be attributed to the migration of Hispanics into the region for jobs and local socioeconomic conditions including industrial composition and the low cost of living relative to other regions. Hispanic-Owned Business Growth by State 2012 to 2016 Hispanics in Business Report Hispanic-Owned Business Growth by State 2012 to 2016 Net Increase in Number of Hispanic-Owned Businesses from 2012 to 2016
  6. 6. Tel: 888.211.9353 • Email: info@geoscape.com • www.geoscape.com 06 Hispanics in Business Report Hispanic Small Business Owners Wealth Statistics versus All Hispanic Households Immigrants are venturing out and starting new businesses at a rate that far outpaces their share of the population. In fact, recent studies show that immigrants are twice as likely to start a new business as someone born in the U.S. One of the reasons so many Hispanics start their own business is the opportunity for financial reward. Since many immigrants who come to the U.S. seeking work end up in low-paying industries, they are more likely to turn entrepreneurial as their only option to earn more money. Among all U.S. Hispanic households, 38% earn greater than $50,000 in household income per year compared to 66% among Hispanic small business owners. Furthermore, Hispanic small business owners are 1.7 times more likely to earn in excess of $100,000 per year than Hispanics overall.
  7. 7. The Impact of Hispanic Businesses on the Financial Sector In recent years, Hispanics have generated tremendous growth opportunities for the financial services industry. The growth in the number of Hispanic consumers and more specifically Hispanic business owners has led to an increase in the base of middle- and higher-income Hispanic households. This has led to Hispanics increasing their usage of a wide array of financial services. As a result, Hispanics have become a viable source of growth in the financial services industry. Hispanic Small business owners in particular represent an important growth opportunity for Tel: 888.211.9353 • Email: info@geoscape.com • www.geoscape.com 07 Hispanics in Business Report marketers of financial services mainly because Hispanics in general have been underserved. In fact, many Hispanic owned business owners are not comfortable with their current level of knowledge about financial planning, and many are indeed unfamiliar with specific personal and business financial planning services. Not surprisingly, their weak familiarity with specific financial planning services inhibits their use of those products. A minority have an established relationship with a financial advisor, though they realize the importance of consulting with one. Many financial institutions are banking on the growth of small business, with minority and Hispanic-owned firms at the center of U.S. economic expansion. Familiarity Given their discomfort with their level of knowledge about financial planning and the number who have been approached infrequently by advisors, it’s not surprising that many Hispanic Business Owners (HBOs) are unfamiliar with specific personal financial planning services: Just over half of HBOs indicate that they’re familiar withsometypeofretirement planning, less than 40% with estate planning, and only about a third with life insurance planning. *Hispanic Business Owners Report 2015 New York Life Research.
  8. 8. Tel: 888.211.9353 • Email: info@geoscape.com • www.geoscape.com 08 Hispanics in Business Report Though they may have more inmediate concerns, such as paying for their kids’ education, HBOs do realize the importance of consulting with a financial advisor and planning for retirement. They admit that they’re not comfortable with their current level of knowledge about financial planning. Passing along their business to their family and leaving a legacy for future generations aren’t a high priority. Feelings About Financial Advisors Most HBOs realize the importance of consulting with a financial advisor (above), but a minority have an established relationship with one. Obstacles to building that relationship include mistrust, hight perceived cost (vs. value), and infrequency of being approached (with almost 40% expressing moderate to weak agreement that they’ve been approached about life insurance or financial planning). *Hispanic Business Owners Report 2015 New York Life Research. Importance of Financial Planning *Hispanic Business Owners Report 2015 New York Life Research.
  9. 9. THE CONTRIBUTION OF HISPANIC-OWNED BUSINESSES TO THE U.S. ECONOMY *Nielsen Scarborough USA 2016 Study Release Hispanic business owners take advan- tage of commercial banking services and invest at a significantly higher rate when compared to the general Hispanic popu- lation. According to data from Geoscape and Scarborough, Hispanic small busi- ness owners are nearly 2x more likely to conduct online banking and 60% more likely to invest in mutual funds. Other banking services such as online bill pay and home re-financing are also utilized at a significantly higher rate when com- paring Hispanic small business owners to the general U.S. Hispanic population. As the Hispanic population in the U.S. continues to expand, more Hispanic- owned businesses are being launched. And as Hispanic immigrants have exceeded the country’s overall entrepreneurship rate and are more likely to start new businesses than the U. S. population overall, this will have a profound impact on the U.S. economy as moreHispanicspursueentrepreneurship. Hispanic-owned businesses are fast becoming the bell-weather for future growth. Their relatively young age cohorts, increasing household incomes, and impact on the financial sector paint a very positive picture for the American economy during the next decade or more. Tel: 888.211.9353 • Email: info@geoscape.com • www.geoscape.com 09 Hispanics in Business Report
  10. 10. Sources Geoscape, American Marketscape DataStream,Series 2016 Nielsen Scarborough, USA+R1 2016 Kauffman Index Startup Activity National Trends, 2015 Robert Fairlie, Arnobio Morelix, E.J. Reedy and Joshua Russell U.S. Census Bureau, Survey of Business Owners 2002 U.S. Census Bureau, Survey of Business Owners 2007 U.S. Census Bureau, Survey of Business Owners 2012 U.S. Census Bureau, Economic Census Summary 2002 U.S. Census Bureau, Economic Census Summary 2007 U.S. Census Bureau, Economic Census Summary 2012 U.S. Census Bureau, Non-employer Statistics 2014, May 2016 U.S. Census Bureau, 2014 County Business Patterns, April 2016 U.S. Department of Commerce, Bureau of Economic Analysis Gross Domestic Product, Comprehensive Revision, Q2-2013 For more information about this report or to find out about other Geoscape products and services, contact Geoscape at: 1-888-211-9353 or visit us at www.geoscape.com. Hispanics in Business Report Tel: 888.211.9353 • Email: info@geoscape.com • www.geoscape.com 10
  11. 11. Tel: 888.211.9353 • Email: info@geoscape.com • www.geoscape.com

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