The Latino community in the USA is growing at an exponential rate. Currently, Hispanics are the biggest minority within the USA making up to 20% of the current population.
With the population growth, Hispanics have become a new force in the business community as well. In fact, Forbes is calling Latino-Owned Businesses in America, “unstoppable”. Similarly, Inc. is claiming that Latino-owned businesses are booming.
But are they really?
In reality, Hispanic businesses are growing but with growth, they are also experiencing some unique challenges.
Let us explore some common pitfalls of Latino businesses and common ways out.
Common Reasons behind Latino-Owned Business Growth
Access to Technology
Most Latinos living in the USA are immigrants who came here to live their American dreams. These immigrants now have families here, and better learning and earning opportunities, which has helped them grow financially.
Thanks to this financial growth, they have access to better technology, which is helping them expand their business. Moreover, Latinos are seen to be tech-savvy; reports show that 85% of Latinos own a smartphone, compared to 77% of Caucasians in the USA. Similarly, the study also reveals that 85% of Hispanics use social media compared to 80% of Caucasians in the USA.
Even brands like Cox have recognized the high demand for tech among the Hispanic community. To cater to their needs, Cox is offering dedicated support for Hispanic customers. These customers can reach out to 24/7 Cox servicio al cliente and inquire about the internet-related queries.
· Rise in Education
Most of the Hispanics, when moved to the US, faced issues with their job. Rather than feeling discouraged, this first generation of Hispanic Americans recognized the need for education and started investing in the education of their kids.
Today, most Hispanic kids have better access to education offering them an opportunity to understand business trends better. This literature is not just limited to business, niche research, and building better strategies for business, it also extends to tech.
This growing tech and digital literacy is helping Latino-owned business target their customers better. These businesses are much better at handling online communities, launching good marketing campaigns, and attracting more customers.
· Improvement in Economic Condition
Hispanics are now earning more than ever. Compared to 2000, when the median household income for Hispanic households in America was $33,447, Hispanics are now earning $65,540 in 2023. This means that within 23 years, the overall median income per household has nearly doubled.
This growth in the economy means that Hispanics have better access to private funds. More parents are ready to invest in their kids’ startups and business ideas. This has created an entrepreneurial spirit within the community helping more kids and families to get into the business compared to seeking jobs.
· Mainstream Hispanic Culture Recognition
We can all agree that Latino communities have long been under the shadow of other communities, especially coactions. Hispanic culture, music, food, and fashion were considered too loud to appeal to the American masses.
However, now Hispanic culture has gained a lot of attention and global recognition. This has given a boost to the Hispanic economy. Customers love Hispanic food, fashion, and music now, which helps more businesses grow and get global recognition.
Common Challenges Faced By Latino-Owned Businesses
Considering all these growth tactics, one might think that Latino businesses are indeed unstoppable. However, while mentioning growth opportunities we also need to recognize the unique challenges that Latino-owned businesses are facing.
Here are some common challenges faced by Hispanic business owners:
· Accessing to Funding
Small Latino-owned businesses have shown immense growth but when it comes to scaling, these businesses struggle. Majority of the Latino business owners have a low credit score, which is the reason they struggle while acquiring a business loan. Moreover, investors find it hard to trust Latino businesses with big funding due to stigma and stereotyping against Hispanics.
· Networking Barriers
Business networking is a very important part of scaling and growing business in the USA. While most Caucasian-based businesses flourish in Silicon Valley, Hispanic businesses fail to get the same attention, investments, and advantages. Moreover, the strong networking and monopoly in the business community restrict Hispanics from entering lucrative niches.
· Language and Cultural Barrier
Seamless communication is a very important factor for business growth. There is no doubt that Latino business owners are now more educated and can easily communicate in English. However, most business owners still struggle with advanced communication. Moreover, they are not culturally aware of the American audience, which only makes it challenging for businesses to grow.
· Landing a Contract
Hispanic-owned businesses are doing great on a small scale, however, when it comes to scaling or landing a huge contract, they still face discrimination. A report by Standard Business School reports that Latino Entrepreneurs are struggling when it comes to Accessing Contracts. Moreover, even when Latino-owned businesses have access to contracts they are relatively smaller and insignificant compared to other communities.
Ways to Overcome These Challenges
- The Hispanic community should come together to address stereotypes
- The community needs to build a strategic plan or a funding method to help Latino businesses scale
- Hispanics should be offered tech and business-based scholarships to help them get into tech business
- Government and financial firms need to step in and create investment opportunities for Latino-owned businesses.
