Taking Care of Business: The Future Looks Bright For Hispanic-owned businesses in Southern Arizona
It’s been a long road to recovery since the Great Recession of 2008 but we’re finally seeing some steady improvements. One of the bright spots driving this growth concerns Hispanic-owned businesses, both nationwide and within Southern Arizona.
According to Scarborough Research, Hispanic-owned businesses enjoyed a 44% increase over the past five years, over three times the national average of non-Hispanic businesses. Much of this growth involved small businesses with less than ten employees, showing the power of entrepreneurship within the Hispanic community.
If you’re looking to start your own enterprise, now might be a perfect time to catch the rising tide. Read on to discover how Hispanic-owned businesses accomplished this amazing growth and how you can thrive along with them.
Hispanic-owned business growth: By the numbers
Optimism is everywhere, as a number of recent research suggests that Hispanic-owned businesses exceeded all expectations. A study by Bank of America’s 2017 Hispanic Small Business Spotlight found that 76% of Hispanic-owned businesses in the US planned to grow their business over the next five years. This is compared to 55% of non-Hispanic-owned businesses, showing that Hispanic business owners continue to be a formidable economic force.
Even more encouraging is that the same report found that 54% of Hispanic-owned businesses planned to hire in 2017. These numbers illustrate how Hispanic businesses are increasingly playing a larger role in our country’s economic development. And with the Associated Press reporting that Hispanic-owned businesses grew at fifteen times the national rate from 2012 to 2015, this influence has become difficult to ignore.
Arizona: A particular hotbed of thriving Hispanic-owned businesses
Arizona has long been home to a vibrant Hispanic business community. But recent statistics show that the Hispanic market experienced hyper-charged growth over the past decade.
A report by the Arizona Hispanic Chamber of Commerce (AHCC) concluded that Hispanic-owned businesses in the state grew by 70% from 2007 to 2015. This number is even more impressive considering the rest of Arizona’s business sector grew by 2% over the same period.
The University of Arizona’s Eller College of Management began tracking the progress of Hispanic-owned businesses in the state and found equally encouraging results. Eller’s Making Action Possible (MAP) project found that both Tucson and Phoenix possessed higher-than-average numbers of Hispanic-owned businesses compared to the rest of the country.
According to the study, Tucson held the fourth-highest number of Hispanic-owned businesses, trailing only El Paso, San Antonio and Albuquerque. The report states that about a quarter of Tucson’s businesses were Hispanic-owned. The city was also one of only three metropolitan areas that saw double-digit growth.
While Tucson’s growth was impressive, Phoenix experienced its own surge in Hispanic-owned businesses. The city ranked 8th overall in the MAP study, with 16% of its businesses being Hispanic-owned. This exceeded the national average of 12%.
Women continue to dominate the Hispanic-owned business landscape
One of the more positive discoveries in the MAP report was the influence of women business owners in Arizona. The state had the highest number of Hispanic-owned businesses run by women at 46.7%. This blew past the national average of 44.5%.
The increase of female business owners shows the expanding diversity in the nation’s business landscape. It also lends evidence to the theory that educational gains lead to more business ownership. James Garcia, director of the AHCC, credits this growth to increased graduation rates among Arizona Hispanics. Garcia also credits the 2008 recession for the growth in female-fronted businesses. He says that when massive layoffs hit the middle class, many women decided to start their own business rather than look for a job.
Which types of Hispanic-owned businesses are growing?
While Hispanic business owners of all types are seeing record growth, some particular industries stand out from the pack.
The category of Other Services accounted for the largest percentage of Hispanic-owned businesses in Southern Arizona, according to the MAP study. Other Services include repair and maintenance, such as automobile, machinery or furniture repair. It also includes personal services like hair and nail salons, dry cleaners and funeral homes.
Support and Waste Management occupied the number two spot. This category includes bookkeeping, janitorial services, landscaping, security, call center services, collection and travel agencies. Construction, healthcare and social assistance rounded out the rest of the list.
What still needs to be done?
The development of Hispanic-owned business serves as an inspiration to all those who dream of starting their own business. But rather than rest on our laurels, we need to accept that there’s still work to do.
A study by the website Wallethub analyzed 150 cities in the US to find out which are the best for Hispanic entrepreneurs. The city of Gilbert clinched the 11th spot on the list, one of the few positive results from the report. The same study found less flattering results for Phoenix (104), Mesa (108), Glendale (119) and Tucson (121). These results show that despite the recent growth, there’s still a long road ahead to help entrepreneurs reach their goals.
What can we do?
Fortunately, there are a number of organizations and programs to assist present or future Hispanic business owners. Last year, the Tucson Hispanic Chamber of Commerce rolled out AZBizLoans.com (now owned by David Allen Capital) in partnership with the Arizona Chamber of Commerce. The site provides access to funding for those business deemed too risky for banks. There’s also the Fuerza Local Accelerator, presented by Local First Arizona to “build and support the local Latino business community.” The program offers a Spanish language business accelerator course that graduates more than twenty-five Latin micro-entrepreneurs per year. For women looking to build their own business, the Amber Grant for Women awards grants of $500 each month and a $2,500 at the end of the year to a qualifying individual.
It often proves difficult to obtain startup funding for a small business. These programs serve as invaluable resources for those looking to throw their hat in the ring.
Finally, if you feel yourself getting the business owner bug or are looking to grow your business, check out Vantage West’s wide variety of business loans. We offer everything from commercial real estate and business installment loans to commercial vehicle and equipment leasing loans. You can always contact our business lending department if you’re not sure where to start.