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Commerce Department Report Shows Hispanic-Owned Businesses Are Growing, Creating Jobs
Hispanic-owned businesses outpace growth of non-minority-owned firms, but are still underrepresented based on population
WASHINGTON (September 21, 2010) – The U.S. Commerce Department’s Minority Business Development Agency (MBDA) and the U.S. Census Bureau today announced that the number of Hispanic-owned firms increased by nearly 44 percent between 2002 and 2007 to 2.3 million, according to data from the U.S. Census Bureau’s 2007 Survey of Business Owners. Employment at these firms also grew by 26 percent from 1.5 million to 1.9 million workers, significantly higher than that of non-minority-owned firms.
“It is encouraging that the Hispanic business community is growing, but we need to create the right conditions for Hispanic-owned businesses to grow more quickly,” MBDA’s National Director David A. Hinson said. “We encourage Hispanic-owned businesses to explore new markets and take advantage of their existing cultural, family or business ties in foreign countries to export as a means to grow and compete in today’s global economy.”
While minority-owned businesses are experiencing substantial growth, Hispanic businesses still represent only 9 percent of all classifiable businesses but 13 percent of the adult population. In 2007, average gross receipts for Hispanic-owned firms increased to $152,700 from $141,000 in 2002, but are still well below gross receipts for non-minority-owned firms, which had average gross receipts of $490,000.
“If the number of Hispanic businesses was representative of the adult Hispanic population in America, there would be 3.4 million Hispanic businesses generating $1.4 trillion in gross receipts paying 7.5 million workers,” Hinson said. “There is still progress to be made in the growth of minority businesses that would give them an even greater impact on our economy.”
Of all Hispanic-owned firms with employees, approximately 44,000 have revenues of more than $1 million, accounting for $224 million in gross receipts and the employment of 1.2 million workers.
“These firms have business models that are helping to facilitate growth, and we need to share the best practices of these firms with the rest of the minority business community,” Hinson said.
MBDA continues to collaborate with other public and private-sector partners to help minority-owned businesses grow and to create the right conditions to support that growth. Initiatives include
MBDA’s Global Construction Program, which provides opportunities for minority businesses in the construction industry to compete for more than $1 billion in international construction contracts; building relationships with traditional and non-traditional sources of funding, which generated nearly $1 billion in financial packages for clients facilitated through MBDA last year; and increasing the number of Hispanic businesses that export, businesses that are twice as likely to export compared to non-minority-owned firms.
“The businesses that we represent are a vital source of job creation and economic stimulus but their true potential is going unrealized,” said Javier Palomarez, president and CEO of the U.S Hispanic Chamber of Commerce. “That is why the U.S. Hispanic Chamber of Commerce is working with MBDA and other federal agencies to tackle long-standing challenges our firms have with access to contracts and access to capital. We need to reach business parity to ensure a strong future for the growing, and aging, American population.”
As the nation’s population demographics change, the Hispanic business community also continues to change. Highlights:
Between 2002 and 2007, the rapidly growing Hispanic population increased by 18 percent, compared to only 1 percent growth for non-minorities.
Hispanic-owned firms outpaced the growth of non-minority-owned firms by 44 percent from 1.6 million Hispanic businesses to 2.3 million during this period.
Employment at Hispanic firms also surpassed employment at non-minority-owned firms, growing by 26 percent from 1.5 million workers to 1.9 million workers, compared to 0.03 percent growth for non-minority-owned firms.
Average gross receipts generated by Hispanic firms increased by 8 percent from $141,000 per firm in 2002 to $153,000 per firm in 2007. In comparison, all minority firms and non-minority-owned firms had gross receipts in 2007 of nearly $179,000 and $490,000, respectively.
In 2007, the adult Hispanic population represented 13 percent of the U.S. population, but Hispanics held only 9 percent of all classifiable businesses, 3 percent of gross receipts and 3 percent employment of all classifiable businesses.
If the number of Hispanic firms reflected the 2007 adult Hispanic population share, there would be more than 3.4 million Hispanic-owned firms, an additional 1.2 million beyond the current level.
If gross receipts and paid employment also reflected the 2007 adult Hispanic population share, Hispanic firms would generate approximately $1.4 trillion in gross receipts, $1.1 trillion more than their actual receipts, and employ 7.5 million workers, about four times their actual employment.
The Survey of Business Owners defines Hispanic-owned businesses as firms in which Hispanics own 51 percent or more of the equity, interest or stock of the business.
For more information about the Hispanic business community, or minority-owned firms in the United States, please contact Lahne Mattas-Curry at email@example.com.
About the Minority Business Development Agency (MBDA)
MBDA, www.mbda.gov, an agency within the U.S. Department of Commerce, celebrates 40 years of promoting business growth for minority businesses. In doing so, minority-owned firms are better equipped to create jobs, impact local economies and compete successfully in domestic and global marketplaces. With a nationwide network of more than 45 business centers and strategic partners, MBDA assists minority entrepreneurs and business owners with consulting services, contract and financing opportunities, bonding and certification services, building business-to-business alliances and executive training.