Posted at 4:47 AM
With the recent conclusion of another annual celebration of Hispanic Heritage Month, here are two sources of business data that show gains in America’s Hispanic-owned businesses.
Survey of Business Owners
The number of U.S. businesses owned by Hispanics grew by more than 1 million firms, or 46.3 percent, from 2.3 million to 3.3 million from 2007 to 2012. In contrast, the total number of all U.S. firms increased 2.0 percent during the same period, from 27.1 million to 27.6 million.
Hispanic business ownership is defined as having people of Mexican, Puerto Rican, Cuban or other Hispanic origin (such as Dominican or Salvadoran) owning more than 50.0 percent of the stock or equity in a nonfarm business operating in the United States. Hispanics owned 12.0 percent of all businesses in 2012, up from 8.3 percent five years earlier.
The rate of increase in receipts for Hispanic-owned firms also outpaced that of all firms. Hispanic-owned firms totaled $473.6 billion in receipts in 2012, an increase of 35.1 percent from $350.7 billion in 2007. In contrast, receipts for all firms grew 11.7 percent during the same period, from $30.0 trillion in 2007 to $33.5 trillion in 2012.
These statistics come from the 2012 Survey of Business Owners, which provides a broad socio-economic picture of business owners across the nation and is part of the U.S. Census Bureau’s fiveyear economic census.
The Survey of Business Owners not only identifies whether business owners are of Hispanic origin in general, but also their nationality, or specific Hispanic group. Each Hispanic group saw the rate of increase between 2007 and 2012 in the number of firms they owned outpace the national average: Cuban (up 12.4 percent to 281,982), Mexican (up 56.8 percent to 1.6 million), other Hispanic or Latino (up 44.1 percent to 1.1 million) and Puerto Rican (up 65.0 percent to 258,221).
Additionally, slightly under half of Hispanic-owned firms (approximately 1.5 million, or 44.5 percent) in 2012 were owned by women.
Annual Survey of Entrepreneurs
More business statistics from the inaugural 2014 Annual Survey of Entrepreneurs, which provides statistics for employer businesses only, show that among the nation’s nearly 300,000 Hispanic-owned firms with paid employees, more than half were located in one of three states: California (66,487), Florida (59,987) or Texas (49,722). Among the 50 most populous metro areas, Hispanic-owned firms were most commonly found in Miami-Ft. Lauderdale-West Palm Beach (44,599), New York-Newark-Jersey City (28,949) and Los Angeles-Long Beach-Anaheim (28,858).
Returning to the nation as a whole, Hispanic-owned employer firms were most likely to be found in the accommodations and food services (40,371) and construction (40,340) sectors.
The survey also revealed a wide range of additional findings about Hispanic business owners and their firms. For example:
96.1 percent of Hispanic-owned businesses (that reported language information) conduct transactions in English, with 66.9 percent conducting transactions in Spanish, potentially in addition to other languages.
13.1 percent of Hispanic-owned businesses (compared with 8.9 percent of all businesses that provided the time in businesses information) have been in business less than two years.
57.7 percent of Hispanic-owned businesses (that provided profitability information) were profitable; another 20.5 percent had losses, while 21.9 percent broke even.
52.4 percent of Hispanic business owners (who reported citizenship information) were not born a U.S. citizen.
35.7 percent of Hispanic business owners (who provided the education information) had a bachelor’s degree or higher prior to establishing, purchasing, or acquiring the business.
20.2 percent of Hispanic business owners (who provided the information) spend an average of 60 or more hours per week managing or working in the business, and 48.2 percent spend more than 40 hours doing so.
A separate topical module in the Annual Survey of Entrepreneurs focused on innovation and research and development activities of businesses. Responses to the survey from Hispanic-owned businesses revealed, for instance, that 34.4 percent have upgraded a technique, equipment or software to significantly improve a good or service. Here are a few other interesting facts:
29.7 percent have improved performance for a good or service by making changes in materials, equipment, software or other components.
13.7 percent have developed a new use for a good or service.
30.7 percent have made it easier for customers to use a good or service.
23.9 percent have applied a new way of purchasing, accounting, computing, maintenance, inventory control or other support activity.
20.6 percent have reduced costs by changing the way a good or service was distributed.
20.5 percent have made a significant improvement in a technique or process by increasing automation, decreasing energy consumption or using better software.
15.9 percent have decreased production costs by improving the materials, software or other components.
16.0 percent have changed a delivery method to be faster or more reliable.
Please note that the statistics from the two surveys referenced in this blog are not directly comparable due to methodological differences. This is just a small snapshot of data about America’s economy collected by the Census Bureau and available at census.gov.
Cross-post from Random Samplings, the official blog of The U.S. Census Bureau