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Hispanic Women Entrepreneurship: Understanding Diversity Among Hispanic Women Entrepreneurs


Introduction

It was estimated that there were 1.9 million Hispanic women-owned firms in the United States in 2016, employing 550,400 workers and generating $97 billion in revenues.[1] The number of Hispanic women entrepreneurs grew at a faster rate than any other group – 137 percent between 2007 and 2016. [2] With the United States Census Bureau projecting the number of Hispanic women to nearly double by 2050 and for Hispanic people to become the number-one minority group in the United States, the growth rate in the number of Hispanic women-owned businesses is expected to continue to surge.[3]

However, Hispanic women are underrepresented as entrepreneurs. While their share of the population is 8.3 percent, their share of businesses is 5.3 percent.[4] In addition, on average, Hispanic women-owned businesses are significantly smaller than businesses owned by other major racial and ethnic groups. According to the 2012 Survey of Business Owners and Self-Employed Persons (SBO), Hispanic women-owned businesses generated on average $54,000 in revenue per year compared to businesses owned by their White women counterparts ($171,000)[5] and businesses owned by White men ($716,000).[6] Employer firms represented five percent of Hispanic women-owned firms while employer firms represent 12 percent of White women-owned firms. White men-owned firms were five times more likely to be employers than Hispanic women-owned firms.[7]

Because of the recent and projected increase in their numbers, Hispanic women entrepreneurs are an untapped engine of economic growth. Understanding what sets these firms apart from others is key to unlocking their potential. If revenues generated by Hispanic women-owned firms matched those currently generated by other women-owned business, they could add $155 billion[8] in revenues and 80,000 new jobs to the U.S. economy.[9]

 

This Report

Hispanic people  are the most diverse ethnic group in the U.S. It is crucial to understand how that diversity influences the challenges and opportunities Hispanic women face in starting and growing their businesses, yet few studies have tried to understand the extent to which diversity affects the revenues, sales and job creation of Hispanic women-owned businesses.  This report identifies the unique characteristics of Hispanic women entrepreneurs, reviews entrepreneurship training program practices that work to encourage successful business outcomes among this population, highlights specific programs that exemplify these practices and suggests targeted tactics to unlock their potential.

This report includes a review of the literature that shows that the Hispanic community is not homogeneous and how this diversity impacts business success. It analyzes quantitative information about Hispanic women and Hispanic women entrepreneurs from publicly available data and from the 2012 Survey of Business Owners and Self-Employed Persons (SBO).  The report also shows differences between Hispanic and White individuals. When relevant, it highlights information about other minority groups such as Asians and Blacks. Because of the large number of studies and databases used or cited in this study, there is no consistency between the use of the ethnic categories “White” and “non-Hispanic White.” The report relies on the category definitions used by each individual study.

Importantly, the report highlights the dimensions that shape program outcomes as well as providing examples of how five entrepreneurship training programs customize these dimensions to meet the specific needs of Hispanic women entrepreneurs.

 

[1] These estimates are based on projections. The last official number from the Survey of Business Owners and Self-Employed Persons (SBO) estimates 1.5 million Hispanic women entrepreneurs. The projections and the methodology used to derive them are available in “The 2016 State of Women-Owned Businesses Report,” American Express OPEN and Womenable, 2016, accessed February 11, 2017, http://www.womenable.com/content/userfiles/2016_State_of_Women-Owned_Businesses_Executive_Report.pdf.

[2] Ibid.

[3] “Projections of the Population by Sex, Race, and Hispanic Origin for the United States: 2015 to 2060,” U.S. Department of Commerce U.S. Census Bureau, 2012, accessed December 7, 2016, https://www.census.gov/population/projections/data/national/2012/summary....

[4] 2012 Survey of Business Owners and Self-Employed Persons.

[5] Because of the large number of studies and databases used or cited in this study, there is no consistency between the use of the ethnic categories “White” and “non-Hispanic White.” The report relies on the category definitions used by each individual study.

[6] 2012 Survey of Business Owners and Self-Employed Persons. Note that in the context of this study, “White” refers to non-Hispanic Whites, since Hispanic may refer to individuals of any racial background.

[7] Ibid.

[8] This was calculated as follows: Average revenues of non-Hispanic women-owned firms x Number of Hispanic women-owned Firms = Revenues that Hispanic women firms would have if they reached average revenues of non-Hispanic women-owned firms. Revenues that Hispanic women-owned firms would have - Revenues that Hispanic women-owned firms already have = Additional revenues.

[9] This was calculated as follows: Average employment of non-Hispanic women-owned firms x Number of Hispanic women-owned firms = Number of employees that Hispanic women-owned firms would employ if they reached average employment of non-Hispanic women-owned firms. Number of employees that Hispanic women-owned firms would employ - Number of employees that Hispanic women-owned firms already employ = Additional employment.


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