Hispanic-owned businesses are on a roll. Since 2011, the five-year average growth rate in the number of Hispanic-owned businesses has been double or triple the national average for all businesses, according to the Stanford Latino Entrepreneurship Initiative. All told, Hispanic-owned businesses contribute $700 billion annually to the U.S. economy, according to the U.S. Hispanic Chamber of Commerce.

Here’s a closer look at the average Hispanic small business owner, as seen by several recent studies.

Small business owner profile

Guidant Financial’s survey of current and aspiring small business owners reports Hispanic entrepreneurs are:

Gender

76% male

23% female

Age

18-29: 8%

30-39: 21%

40-49: 33%

50-59: 28%

60-plus: 10%

Education

Hispanic business owners prove that you don’t need a college degree to be a success in business. 43% of those in the survey have a high school diploma or GED. About one-fourth have a bachelor’s degree, 19% have an Associate’s degree, and 14% have a Master’s degree or higher.

Motivation

What motivates Hispanic entrepreneurs to start their own businesses? Compared to the average business owner, Hispanics are much less likely to say they started their business as a result of being laid off/job outsourcing (7%) or due to dissatisfaction with corporate America (12%). Slightly more than half (51%) say they were “ready to be my own boss,” while 47% “wanted to pursue my passion.” In addition, about one-third (32%) saw an opportunity and jumped on it.

Location

The most popular states for Hispanic small business owners are

California Florida Texas Arizona New York

In a separate study, WalletHub reports that nine of the top 20 cities for Hispanic entrepreneurs are in Texas.

Industry

The most common industries for Hispanic small business owners are:

Business services—11%

Food/restaurant—11%

Automotive—9%

Home services—7%

Other—33%

How are Hispanic entrepreneurs doing?

Hispanic entrepreneurs are doing better than the average entrepreneur when it comes to growing their businesses. Some 81% of Hispanic entrepreneurs say their business is profitable, compared to 68% of all survey respondents. More than half (51%) of Hispanic business owners have between two and five employees and 14% have six to 10 employees; 26% are solo entrepreneurs.

Expressing their confidence, the majority of Hispanic small business owners said if they had additional capital, they would spend it on expansion (57%) or equipment (53%).

One factor helping Hispanic businesses thrive is their attention to hiring and retaining employees. A whopping 81% of Hispanic entrepreneurs in the 2018 Bank of America Hispanic Business Owner Spotlight say being able to attract and retain quality employees directly affects their growth. That’s why 87% of Hispanic entrepreneurs make it a point to reward and motivate their employees, compared to 54% of non-Hispanic entrepreneurs in the same study.

Hispanic small business owners are also passionate adopters of social media marketing. They’re 20% more likely to use digital tools than non-Hispanic entrepreneurs, according to the Bank of America study. Some 78% of Hispanic entrepreneurs use social media for marketing their businesses (compared to 49 percent of non-Hispanics), 76% use it for networking (compared to 46% of non-Hispanics), and 74% use it to communicate with customers (compared to 39% of non-Hispanics).

Challenges for Hispanic-owned businesses

Guidant found the number-one challenge for Hispanic business owners is lack of capital/cash flow, cited by 63% of survey respondents. Marketing/advertising and administrative work tied for the 2nd/3rd biggest challenges.

Although the Hispanic business owners Guidant surveyed are less likely than the average entrepreneur to feel that capital is a problem for them, a survey by Biz2Credit reports that although things are improving, credit scores continue to be a problem for many Hispanic business owners. Their average credit scores are below 600, which is often the minimum score that banks and other lenders will accept when deciding whether or not to extend a loan.

Despite these challenges, the average annual revenues of Hispanic-owned businesses grew from $258,702 in 2016-2017 to $327,189 in 2017-2018, an increase of 26.5%, according to Biz2Credit.

Clearly, there’s a lot to celebrate about Hispanic business owners’ success and their many contributions to our nation’s economy.

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