Hispanic business owners are front and center during this election cycle, and the pattern continues as presidential nominee Mitt Romney speaks on Monday at the U.S. Hispanic Chamber of Commerce’s annual convention in Los Angeles, the largest gathering of Hispanic business leaders.
These entrepreneurs, who are starting small businesses at twice the rate of the national average, have become part of mainstream America, said former Commerce Secretary Carlos Gutierrez, who served under the George W. Bush administration between 2005 and 2009.
One Forbes article projects that Hispanic business owners will have contributed nearly 8 percent each year to the economy over the 10-year span ending in 2015. In Florida, New Mexico, and Texas, Latino-owned enterprises account for 20 percent of all businesses.
“In many ways, they’re sort of leading the charge,” Gutierrez said. He added that Hispanic business owners are concerned about tax increases, more regulations, and how the Affordable Care Act may affect their businesses. “If they reach the point when they have 50 employees, they will be subject to onerous regulations. They’re saying, ‘Look there’s no incentive to become larger.’ ”
“The No. 1 issue [for Hispanic business owners] is the economy, jobs, education,” Gutierrez said during a phone interview on Saturday, shortly after a town-hall meeting targeted to Hispanic business owners in North Carolina. An estimated 60 to 70 people attended the event, he said.
A recent PNC Bank survey found that nine of 10 Hispanic business owners say they are optimistic about the future of their companies. Nearly 70 percent said they feel their business is meeting or exceeding their expectations; 77 percent said they expect their businesses to grow in the next two years.
But a large number—seven of 10—said they also plan to save money or reduce capital spending in the next six months due to the uncertain economy.
“Hispanic business owners are taking a conservative approach to managing their business as they hunker down in the current economy,” Jesus Munoz, vice president of business banking at PNC, said in a statement. About 15 percent of Hispanic business owners surveyed said they planned to reduce staffing.
Gutierrez, along with Romney’s son Craig and Hispanic business leaders, has been touring the country to sway Hispanics to vote for Romney.
Below are some insights from the Bureau of Business Research into Hispanic-owned businesses in Texas.
Business growth explosion
Hispanic-owned businesses in Texas grew at rapid pace. Between 2002 and 2007, these enterprises increased by 40.2 percent to 447,589. Still, these Hispanic companies lag in receipt sales, employment, and payrolls. Average gross sales receipts for Hispanic businesses was $134,287, significantly lower than those of mainstream firms at $546,228.
Management and communication skills gap
What limits growth of many Hispanic business owners in Texas is a lack of management and communications skills. As a result, many of their businesses remain small. About 59 percent have no more than nine workers (47 percent had four employees; 22 percent five to nine workers).
Hispanics build their negocios from scratch
The vast majority of Hispanic businesspeople in Texas (80 percent) said they started their firms from the ground up. About 9 percent said they purchased their businesses; 3 percent indicated they inherited it.
Most businesses are in service sectors
While 22 percent of Hispanic-owned businesses are in the construction industry, more than 40 percent are in the service sector, such as professional, scientific, and technical services, retail trade, and health care.
Source: Bureau of Business Research report, “Survey of Texas Hispanic-Owned Businesses with Paid Employees.”