Latino-owned businesses play a significant role in the U.S. economy. According to the U.S. Hispanic Chamber of Commerce, there are more than 5 million Latino-owned businesses in the United States, contributing approximately $800 billion annually in revenue. These businesses provide jobs to more than 2.9 million people across the country in sectors like agriculture, construction, hospitality, and technology, support families, and contribute to local economies, particularly in communities where they are prevalent.
Over the past decade, Latino entrepreneurs have been starting businesses at a rate three times higher than the national average, according to the Stanford Latino Entrepreneurship Initiative. This growth has a direct impact on job creation and economic development, particularly in states with large Latino populations like California, Texas, and Florida.
The Challenges of Latino Businesses
Despite their success, Latino business owners face many obstacles. Access to capital is one of the biggest barriers. Latino entrepreneurs are less likely to be approved for loans compared to non-Latino peers, even with similar credit scores and business models. This inequity limits their ability to expand, hire more workers, or invest in new opportunities. Additionally, many Latino-owned businesses operate in industries hit hardest by the pandemic, like hospitality and retail, and continue experiencing difficulties getting back to prepandemic levels.
Shifting immigration policies also have far-reaching consequences for Latino-owned businesses, especially those employing workers with different migratory status. Not only a climate of fear creates labor shortages, economic strain, and heightened anxiety within communities, it can also lead to significant disruptions, causing delays in production and increased operational costs.
- Labor Shortages: Industries like agriculture and construction rely heavily on immigrant labor. Deportations and increased enforcement can cause workforce disruptions, delays, and higher costs for employers.
- Reduced Consumer Spending: Families affected by deportations often lose income, which reduces their ability to spend. This can impact businesses that depend on their local communities for revenue.
- Increased Stress: Business owners and employees who fear immigration enforcement may struggle to focus on operations or long-term planning, which can affect growth and stability.
What Latino Business Owners Can Do
There are practical steps Latino entrepreneurs can take to safeguard their businesses and communities:
- Educate Yourself and Your Employees: Understanding your rights during immigration enforcement actions is crucial. Many community organizations such as MIMA Baltimore provide resources, including guides in Spanish, to help businesses navigate these situations.
- Seek Community Support: Local Hispanic chambers of commerce and other community organizations can offer valuable resources, including funding opportunities, legal assistance, and networking events.
- Advocate for Policy Changes: Joining coalitions that push for fair immigration and economic policies ensures that Latino voices are represented in the decision-making process.
- Leverage Technology: Digital tools can help businesses reduce dependence on labor-intensive processes and create new revenue streams, such as online sales or virtual services.
Why Supporting Latino Businesses Matters
Supporting Latino businesses is not just about aiding individual entrepreneurs—it’s about investing in the economic future of the United States. A report by McKinsey & Company projects that by 2050, Latinos will contribute over 25% of the U.S. GDP, making them a critical component of long-term economic stability.
Latino businesses also play a pivotal role in creating culturally rich and diverse communities. From family-owned restaurants serving traditional dishes to small businesses offering products and services tailored to Latinos, Latino entrepreneurs bring unique perspectives and solutions to the economý and the marketplace.
Latino-owned businesses are more than economic contributors; they are community builders and symbols of perseverance. By staying informed, seeking support, and advocating for change, Latino entrepreneurs can continue to grow and succeed. At the same time, it is essential for policymakers, community organizations, and consumers to rally behind these businesses, recognizing their invaluable contributions to the nation’s economy and culture.
As a Latina entrepreneur, I am committed to supporting my community in Maryland. That’s why I established the Facebook group Emprendedores Latinos – Para Crecimiento Económico to provide resources and opportunities and continue driving the sustainable growth of our businesses. I invite you to join the group and participate—share your comments about your challenges, lessons learned, and successes.
Veronica Cool is a Dominican entrepreneur dedicated to building bridges between cultures and empowering Latinos in the United States. Connect on Facebook at @HispanicStrategy, @VeronicaACool, @coolassociates (IG), or through the Facebook groups Yo Quiero Trabajo and Emprendedores Latinos- Para Crecimiento Económico.
*This article first appeared in the January edition of Baltimore Latino.
