First, the good news: The Accion Opportunity Fund reports that Hispanic-owned businesses are the fastest-growing segment of U.S. small business owners, increasing 34% over the last 10 years. And according to the U.S. Hispanic Chamber of Commerce, these businesses contribute over $800 billion in annual economic activity in the country. Moreover, business ownership is second only to homeownership as a means to building wealth om America.
Last year the 4th Annual Bank of America 2020 Hispanic Business Owner Spotlight noted that Hispanic entrepreneurs were “anticipating a year of robust business growth, with revenue projections reaching a four-year high.” And they planned to expand their businesses and add employees? Of course, that was pre-pandemic. So, how did they actually fare in the year of the pandemic? And what are their current expectations?
The 2021 Hispanic Business Owner Spotlight shows that while acknowledging their own stressors, Hispanic business owners focused on helping their employees navigate these challenging times. In fact, 84% of Hispanic entrepreneurs changed, or plan to change, their approach to employee wellness and benefits due to the pandemic.
Top changes include:
- 61% cut their own salaries in order to keep employees on staff
- 51% gave employees a more flexible work schedule
- 44% allowed their team to work remotely
- 33% offered some type of monetary incentive
- 29% increased the number of paid sick days for their staff
- 27% expanded their wellbeing programs to include behavioral and mental health programs
How to Destress
Almost all (99%) Hispanic business owners reported experiencing additional business-related stress due to the pandemic. How did they cope?
- 55% participated in “enjoyable activities”
- 52% prioritized time with family and friends
- 45% adopted healthy lifestyle habits
- 36% turned to religion/spirituality
While maintaining their optimism about their business’s future prospects, money is tight. Only 25% of the entrepreneurs rate their current financial situation as “strong.” Most (60%) say it’s fair, and 15% rate theirs as poor.
To deal with their financial situation, 49% of Hispanic entrepreneurs plan to apply for a bank loan or line of credit this year. And they expect to invest that money in:
- 41% marketing and promoting their business
- 35% new equipment
- 34% creating or retooling products for their businesses
This optimistic outlook permeates the entire small business community. According to Sharon Miller, the President of Small Business at Bank of America, their research shows all “small business owners are remaining positive and hopeful for the future of their business and our economy. The Summer 2021 Black Business Owner Spotlight [showed] that over the next 12 months, nearly half of Black entrepreneurs expect their revenues will increase, and the economy will improve at both the local and national levels. Additionally, nearly one-quarter plan to increase hiring efforts.”
And Hispanic business owners are even more optimistic about the coming year for their businesses.
- 81% expect revenues to rise
- 74% think their local economies will improve
- 64% believe the U.S. economy will improve
- 43% plan to hire more employees
Of course, there are still obstacles to overcome. The National Bureau of Economic Research estimates that at the beginning of the pandemic alone, the number of Black business owners decreased 41% between February and April 2020. The number of Latino business owners fell 32%, Asian business owners declined 26%, and white business ownership was off 17%.
The U.S. Hispanic Chamber of Commerce’s report also says Hispanic-owned small businesses “play a central role in their communities.” The Bank of America report underscored this, revealing that 60% of Hispanic entrepreneurs volunteered to help their local communities during the pandemic.
But that support was a two-way street. The Hispanic business owners say they received support during the pandemic from:
- 66% friends and family
- 61% online communities
- 59% their local communities
- 55% small business bankers
- 53% small business advocacy groups
And, of course, SCORE is always here to help. If you don’t yet have a mentor, you can find one here.