4 Current Challenges and Triumphs of Hispanic Business Owners New data about the fastest growing segment of entrepreneurs.
By Carolyn Rodz
Opinions expressed by Entrepreneur contributors are their own.
My love for small business started before I could count in a cookie factory in La Paz, Bolivia, where my grandparents led hundreds of employees to build the largest commercial bakery in the country. As I grew, my understanding of how those cookies supported a community grew as well. From the machinists who fixed those two-story conveyor belts when they broke down to the vendors who sold them in their stores to the families who literally broke bread over those delicious marraquetas, entrepreneurship has never been about a paycheck to me; it's about building an engine to empower a community.
This Hispanic Heritage Month, as my company, Hello Alice compiles stories of fellow Hispanic-owned small businesses, I'm reminded not only of the spirit and determination of my family but also of the nearly 5 million emprendedores who contribute an estimated $800 billion annually to our economy and empower communities across our country.
The statistics are inspiring yet concerning: there is a $1.5 trillion opportunity gap for Hispanic owners and lots of progress to be made. Our latest data report, published in partnership with Square, the United States Hispanic Chamber of Commerce, and the Latino Business Action Network, surveyed more than 2,700 small business owners about the challenges and opportunities facing them today.
Lack of funding opportunities limit growth
As the rollercoaster ride of inflation continues to impact the health of most small businesses, Hispanic owners ranked access to capital and the ability to grow as their top challenges of 2022.
A few alarming takeaways:
- 89 percent of Hispanic owners told us that inflation was currently impacting their business — that's four percentage points higher than among non-Hispanic owners
- 70 percent said the impacts are worse than six months ago
- 43 percent of all Hispanic owners struggling with growth are having trouble either obtaining raw materials or inventory in the current economy
We must expand access to the capital continuum to ensure Hispanic owners can secure the grants, loans, credit and other opportunities needed to succeed despite economic headwinds. For immediate help, owners can turn to these free, invaluable resources to get started:
- The USHCC Navigates Small Business Program can connect you with grant opportunities, disaster relief and more capital solutions and mentorship
- Small Business Development Centers set up in your area by the SBA can help you access capital or get counseling about options available to you
- SCORE offers dedicated resources for Hispanic entrepreneurs and you can quickly get in touch with a business mentor near you for advice
- The Small Business Funding Center helps match you to relevant grants and credit to support working capital
If you've been shut out of funding options due to your credit score, consider a credit-building secured credit card, which can improve your profile to appeal to more lenders, often with the benefits of a regular card — these do require a security deposit upfront, but this can be well worth getting in the door to capital access if you have no other avenues.
Related: Carlos Slim Helú is still the richest man in Latin America
Hiring can test an otherwise sunny outlook
Though 81 percent of Hispanic owners say they're confident their companies will grow in 2023, consistent with the overall small business community, they cited customer acquisition and hiring as crucial factors in determining their success more often than non-Hispanic counterparts:
- 68 percent of Hispanic owners were having trouble finding and recruiting candidates
- More than a third struggled to offer competitive pay and benefits
- 70 percent of owners said they're having trouble finding qualified workers — 54 percent higher than among non-Hispanic owners
Getting more education is critical as the global hunt for talent continues and there are free resources already out there to help:
- Head to the SBA's learning center for education on recruiting and retaining talent
- Make an appointment for free bilingual counseling through the US Hispanic Chamber of Commerce
- Access the resource centers at platforms like Monster and Indeed to read up on tips to keep you competitive
- Hop over to Hello Alice's series of guides on hiring for personalized solutions for your business
- Stay apprised of business news, which can reveal solutions as they emerge — perhaps you need to look into your automation potential instead of a new hire
Marketing as an obstacle and opportunity
Hispanic owners are focused on raising brand awareness online, just like the millions of small businesses on social media today. But owners were more likely than all entrepreneurs to cite marketing as a significant challenge, with over half identifying paid advertising (57 percent) and social media (54 percent) as potential growth areas as well.
In fact, 42 percent of Hispanic owners spend more than a quarter of their marketing budget on digital platforms like Instagram or TikTok compared to just 30 percent of non-Hispanic owners.
Optimizing their online presence helps Hispanic owners achieve goals around customer acquisition and retention while getting the most bang for their buck.
Here are three, free e-sources available:
- The Small Business Digital Alliance can help you get started and grow on social
- Mastercard's Digital Doors program can help you assess your digital presence and connect you with tools and expert recommendations to optimize it
- Hello Alice and our partners at TikTok teamed up to offer educational resources and regularly host events, workshops, and webinars to keep owners informed on how to optimize their presence on the fastest-growing social platform
Software solutions
Nearly 22 percent of owners struggling with day-to-day operations stated managing time as an obstacle, a consequence of their limited resources:
- Look for software savings and discounts! Numerous business credit cards (even secured options) can offer you rewards for spending on software or discounts on solutions you already use, like Intuit, Adobe, and then some; resources such as the Hello Alice Business Solutions Center also offer discounts on software solutions
- Square's Town Square Business Resource Center, available in English and Spanish, offers authoritative research and how-to guides to help Hispanic owners get the most out of digital solutions and its Seller Community (also available in English and Spanish) can help you access peer-to-peer knowledge and troubleshooting for their entire ecosystem of software solutions
Finding ways to proactively connect owners with the right tools at the right time can help them streamline operations, accelerate growth and maximize efficiency.
Related: The 50 Franchise Companies Doing the Most to Champion Diversity
