Geoscape 2016 Hispanic Business Report

w w w.g e osc a p e.co m
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

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

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

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

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.

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
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.

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).
Importance of Financial
Planning

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.
Hispanics in
Business Report

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, Economic Census Summary 2002
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

Geoscape 2016 Hispanic Business Report

Recommended

Recommended

More Related Content

What's hot

What's hot (19)

Similar to Geoscape 2016 Hispanic Business Report

Similar to Geoscape 2016 Hispanic Business Report (20)

Recently uploaded

Recently uploaded (20)

Geoscape 2016 Hispanic Business Report