There are approximately 5 million Hispanic- and Latine-owned owned businesses in the U.S. And those businesses are booming, according to Lantern by SoFi’s recent survey of 1,000 Hispanic and Latine business owners in the U.S. In fact, more than two-thirds of survey respondents report that their companies are doing the same or even better than they did before the pandemic.

Some business owners were able to turn the challenging lockdown period into an opportunity: One-third of respondents cited Covid-19 as the motivation for launching their companies.

Even as Hispanic- and Latine-owned businesses thrive, however, respondents report that some roadblocks remain. For instance, half of the Hispanic business owners surveyed say they face prejudice from their customers and from other business owners. Some 40% need a second job in order to make ends meet. Yet despite the obstacles, Hispanic business owners say they would encourage their peers to pursue their entrepreneurial dreams.

How do Hispanic- and Latine-owned businesses flourish even in tough times? Read on to learn the success strategies survey respondents shared with us.

Source: Based on a survey conducted on August 2, 2023, of 1,000 Hispanic and Latine business owners in the U.S. ages 18 and older.

Percentages have been rounded to the nearest whole number, so some data may not add up to 100%. 

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Who is the Boss?

Of the Hispanic and Latine business owners who participated in our survey:•60% are female and 40% are male•62% founded or started their business•56% are sole proprietors, while 44% have at least one partner

Peak Performance

Despite difficulties posed by the pandemic, Latine- and Hispanic-owned businesses are thriving. Seventy-two percent of survey respondents say their business is doing the same or even better than it did before Covid.

Type of Businesses They Own

• Retail: 22%
• Service:17%
• Other: 12%
• Manufacturing: 11%
• Restaurant/food service: 7%
• Subscription business: 6%
• Affiliate (earn commission when a member of their audience buys a product or service they recommend): 6%
• Franchise/franchisee: 5%
• Product as service: (a laundromat, for example): 4%
• Distribution: 4%
• Leasing/renting: (such as construction equipment leasing): 3%
• Brokerage: (connecting buyers and sellers): 3%

Seizing the Opportunity

While some companies shuttered during Covid, a significant number of Hispanic- and Latine-owned businesses launched during that time. In fact, one-third of the Hispanic and Latine business owners surveyed started a business during or after the pandemic.

For some of the one-third of respondents who chose this answer it was a necessity: 30% took the plunge because they could no longer pay their bills and needed a source of income. But for just as many, pursuing a dream was the driving factor. Thirty percent said they launched their companies because they “realized life is short and decided to pursue a passion.”

Of Hispanic and Latine business owners with household incomes above $125,000, 36% said the pandemic gave them additional resources to work with, such as stimulus checks and more time to devote to their startups.

Pain Points

Hispanic- and Latine-owned businesses do face some challenges, however, including:

Inflation Is a Major Concern

The high cost of supplies due to inflation poses the biggest threat to the growth of their business, 54% of respondents say. This was almost double the second greatest obstacle — difficulty hiring qualified employees.

Factors Affecting Business Growth

• High cost of supplies due to inflation: 54%
• Difficulty hiring qualified employees: 28%
• Banks’ reluctance to approve loans: 26%
• Decline in brick-and-mortar business in favor of the internet: 25%
• Supply chain issues: 25%

Good Funding Is Hard to Find

Securing the capital to start a business is often difficult for Hispanic and Latine business owners, according to a recent report from the Stanford Graduate School of Business. Almost half (49%) of the Lantern survey respondents said they used their personal savings to help start or acquire their businesses. And 29% used family savings to help get their business off the ground.

Household income determines how Latine- and Hispanic-owned businesses are funded, our survey found. Respondents with household incomes less than $50,000 were much more likely to use personal savings than those whose household incomes were more than $125,000. Some of the higher earners secured home-equity loans or business loans. Those with lower household incomes did not and instead resorted to personal credit cards and personal assets other than savings.

Where the Startup Money Came From

Those with household incomes under $50,000 used:

• Personal savings: 56%
• Family savings: 25%
• Personal credit cards:11%
• Personal assets other than savings: 8%

Those with household incomes over $125,000 used:

• Personal savings: 36%
• Family savings: 31%
• Home equity loan: 20%
• Business loan from a financial institution: 13%
• Business credit cards: 12%

If you’re thinking about opening a business and looking for startup money, there are small business grants available. Explore the options to find out if you qualify.

They Need Another Job to Make Ends Meet

For a significant number of survey respondents, owning a business doesn’t generate enough income — almost 40% have a second job. That includes 44% of Hispanic and Latine business owners who are 24 and younger.

Prejudice Is Still Prevalent

Half of Hispanic and Latine business owners say they’ve experienced prejudice from customers, business acquaintances, or vendors because of their heritage. Of those, 39% experience it at least quarterly.Those most likely to face prejudice are younger and work in the food business:

• 67% of business owners 24 and under have experienced prejudice
• 62% of restaurant/food service business owners say they’ve faced prejudice

The Trickiest Part of Being the Boss

Work/life balance is the toughest part of owning a company, according to 34% of Hispanic and Latine business owners. Women were the most likely to struggle with this — 60% of respondents who chose this answer were women. Other issues Hispanic and Latine business owners wrestle with:

• Becoming and staying profitable: 32%
• Scaling their business for growth: 27%
• Managing cash flow: 25%
• Assessing and taking risks: 24%

The Family Business

Many Hispanic and Latine business owners keep it all in the family by employing relatives, especially siblings — 41% said they brought a brother or sister onboard. And of the 44% of respondents who own their business with at least one other person, 31% co-own with a sibling.

Other family members they’re most likely to employ:

• Cousin: 27%
• Parent: 23%
• Aunt/uncle: 15%
• Grandparent: 13%

Social Media Makes a Difference

Promoting their business was the most challenging aspect of starting it, survey respondents report. So how do they get the word out? Most Hispanic and Latine business owners (57%) say they use social media to publicize their business. Thirty-seven percent have a website, and 31% rely on listings on online marketplaces to help draw customers in.

Paying It Forward

Supporting their community, culture, and heritage is a priority for Hispanic and Latine business owners. As a bonus, doing good work often allows them to promote their companies at the same time.How they give back:

• 34% encourage other businesses to work with Hispanic and Latine businesses and communities
• 33% try to educate their customers and the public about Hispanic and Latine heritage
• 33% sponsor or participate in Hispanic and Latine community events or groups
• 29% contribute to Hispanic and Latine programs or causes
• 22% seek out other Hispanic- and Latine-owned businesses to work with

Their Best Business Advice

Despite the challenges they may face as business owners, survey respondents encourage others to pursue entrepreneurship. These are the words of wisdom they would pass along to those hoping to start Hispanic- and Latine-owned businesses.Rise above prejudice and racism:

• “Don’t be afraid and don’t let racism discourage you.”
• “If you can, go for it. You will face racism, but don’t let that deter you from chasing your dreams.”

Be proud of your heritage and promote it:

• “Admire your heritage, no matter what people say. Be proud of what you do and who you are.”
• “Embrace your cultural heritage and leverage it as a unique selling point in your business.”
• “Do what you love and express your culture.”

The Takeaway

Despite some challenges, many Hispanic- and Latine-owned businesses are flourishing post-pandemic. Most are doing the same or even better than they did before Covid-19, according to our survey. Hispanic and Latine business owners take great pride in their heritage, and they use their businesses to give back to their communities and raise awareness of their culture.

This article originally appeared on SoFi.com and was syndicated by MediaFeed.org.

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