The growth in Hispanic-owned businesses in the U.S. is outstripping that of companies in general, according to a study released Monday.
Between 2012 and 2015, the number of Hispanic-owned businesses has grown at an annual rate of 7.5 per cent, 15 times faster than the 0.5 per cent growth rate for all companies, according to the study by the consulting firm Geoscape and the United States Hispanic Chamber of Commerce.
There are an estimated 4.07 million Hispanic-owned businesses in the country, up 57 per cent since 2007, the study said.
Revenue at Hispanic-owned companies has also surged, rising 88 per cent to a projected $661 billion this year from $351 billion in 2007.
While Geoscape expected an increase in growth of Hispanic-owned businesses, the pace came as a surprise, said Cesar Melgoza, CEO of the Miami-based company that has released other studies on Hispanic business in the U.S.
One reason for the increase is the difficulty some Hispanics have found working and advancing in big U.S. companies.
“Many choose to create their own businesses because they didn’t see the opportunities in Corporate America,” Melgoza said.
Many Hispanic entrepreneurs have started service companies like restaurants, he said. That’s in line with the continuing overall growth of the service sector of the economy, but some Hispanic owners who recently arrived in the U.S. tend to start companies in industries that they’re familiar with, such as construction or landscaping, Melgoza said.
The fastest growth over the past three years has been in Minnesota, Iowa, Missouri, Kansas, Nebraska, North Dakota and South Dakota, where the number of Hispanic-owned businesses grew by 30 per cent. Geoscape attributed the increase to the migration of Hispanics into these states for jobs and their low cost of living relative to other regions. The slowest growth has been in New York, New Jersey and Pennsylvania, with the number of businesses increasing 20 per cent.
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