As we celebrate Hispanic Heritage Month this year, it’s a good time to recognize the many contributions of Hispanic small business owners. Wells Fargo serves as lead sponsor of the Latino Donor Collaborative’s U.S. Latino GDP Report, which tracks the growing influence of the Latino community within the U.S. economy, and the results are incredibly promising.
Latinos contributed $2.7 trillion to the U.S. GDP in 2021, equivalent to the seventh largest economy in the world, and they’re growing 57 percent faster than the U.S. economy overall. From 2010 to 2019, the U.S. Latino GDP is the third-fastest growing among the ten largest GDPs in the world, with the U.S. economy ranking fourth.
Latinos are also accounting for 68 percent of the growth in U.S. labor participation, due in large part to Latina business owners. As of 2019, Latina women owned 18 percent of all women-owned businesses, and between 2014 and 2019, Latina-owned firms grew 40 percent (according to Latinas in Business Inc.). These are significant numbers and show the impact Latina business owners are making on the country’s overall economy.
That said, we all know small business owners have continued to struggle to stay open due to the pandemic’s repercussions and other economic issues. While the statistics surrounding Latina-led companies are sobering – twice as many Latina-owned companies experienced closure during the COVID-19 pandemic compared to their male counterparts – the following tips can help aspiring Latina entrepreneurs stay on a path to success.
Develop a business plan
Having a good idea is not enough. Developing an effective business plan can help you prioritize how to spend your time and money while setting measurable goals. It also can help you identify current or future obstacles that can be used to anticipate and avoid potential risks. For example, with COVID-19 impacts, you may have had to create more online offerings, enhance your digital presence, negotiate relationships with supply chains and vendors or reduce hiring. Whatever the issue, now is an ideal time for business owners to review their plans to ensure that they are prepared to navigate complex economic issues.
Get mentorship support
Latinos are increasingly in advantageous positions to start their own businesses — they’re younger, with higher educational attainment: Nearly 90 percent of Latino post-millennials are high school graduates. They’re contributing to the labor force in greater numbers, buying more homes and closing the wealth gap at a more rapid rate. But the past year and a half has reinforced what we’ve always known: It takes a village. As women business owners continue to climb out of the pandemic impacts and build from survivability toward recovery and opportunity, connecting with mentors and other experts is one of the most effective ways to exchange knowledge, share best practices, and learn from one another.
Latinos are also accounting for 68 percent of the growth in U.S. labor participation, due in large part to Latina business owners.
Find the right guidance and information
Many women may not know where to turn for trustworthy information to support them with critical business decisions. Thankfully, there are many free resources and tools to help educate women business owners. The SBA.gov website, which offers information in Spanish, is a fantastic place to start. Additionally, the Minority Business Development Agency connects women to resources, events and opportunities to help them succeed through its Enterprising Women of Color Initiative. Finally, the U.S. Hispanic Chamber of Commerce has more than 200 local chapters designed to support Hispanic business owners and has specific Latina entrepreneur programing.
Get credit-ready
Once you have a business plan, have connected with mentors and other experts, and have done your research, getting credit ready will be a critical next step before obtaining business financing. It’s important to work with a bank that offers tools and resources that make financing easier to understand, and a banker who shows you what your business needs in order to get approved for a loan. Before applying for a small business loan or line of credit, your bank will want to see that your business generates steady cash flow, has low levels of debt, and is in a strong financial position in order to manage debt payments. The more you know about what bankers want to see in a credit application, the more prepared you will be to pursue credit for your business.
By creating or updating a business plan, looking into mentorship opportunities, increasing knowledge, and getting credit ready, more Latina entrepreneurs can achieve success.
Patty Juarez is executive vice president and head of diverse segments for Wells Fargo. For more information, news, insights and perspectives from Wells Fargo, visit stories.wf.com.
