Latinos are projected to make up 29 percent of the U.S. population by 2050, and their purchasing power will soon surpass $1.3 trillion. Hispanic-owned businesses throughout the U.S. have climbed to revenues of over $660 billion, according to the U.S. Hispanic Chamber of Commerce. Latino small business owners will play an increasingly important role in our economy.
Hispanic-owned small businesses are the fastest-growing business segment in the U.S. America’s economic future rests on the backs of small businesses, and Latinos start three out of every four new businesses.
According to a study by the Stanford Graduate School of Business, Latinos are starting businesses more frequently than others, but these businesses are smaller in scale and making less money than their counterparts as a result. In fact, Latino businesses could have made an additional $1.4 trillion — almost 8 percent to the $18 trillion U.S. economy in 2012 — if they were equal to the U.S. average in scale.
As more and more Latinos achieve upward economic mobility, it’s important that opportunities for small business ownership continue to be encouraged.
Among many challenges facing Latino business owners is access to capital. When Latino entrepreneurs start their businesses, 70 percent of their funding comes from personal savings, according to the Stanford study, while just 6 percent comes from commercial loans. Chances of a Latino business owner obtaining a commercial loan is less than their white counterparts.
Other critical resources, including business training and education, are not readily available to a majority of Latino start-ups. It is true across the board in every industry, and the construction industry is no different. Latino-owned small businesses are growing at a steady pace in the construction industry with tremendous potential to scale up, if they get the support they deserve with access to essential business resources. They need support with lines of credit, bonding, payroll and business training for vital business acumen.
In my 30-year career in the industry, I have worked with many Latino small business owners who strive to make their mark in the industry every day. Latin oowned small business contractors have tremendous potential to get established successfully and scale up.
‘Our best bet’
Richard Diaz is a case in point. He worked his way through the ranks as an ironworker for over 30 years and started his own business as a contractor just five years ago. As a 30-year career ironworker from Iron Workers Local 433 in Los Angeles, he lacked knowledge on business fundamentals. Fortunately, he had all the characteristics needed to be successful, including drive, determination and entrepreneurial spirit. He got up to speed very quickly with business training and resources that were available.
Today, Diaz is a successful contractor, having completed 15 structural steel and 15 ornamental projects. His company is working on a couple of high-profile projects now. He’s also helping fellow contractors get established.
Diaz is a posterchild for Latino-owned small business success. There are many budding Latino entrepreneurs in the construction industry with potential to scale up and add millions of dollars to the construction industry and economy. They are the U.S. economy’s best bet.
For more information, visit www.impact-net.org or call (202) 393-1147.