Seven in Ten Hispanic Small Businesses Optimistic About Future, Despite Headwinds
Survey reveals that post-pandemic, Hispanic small businesses are rebounding nicely, yet may be missing opportunities to prepare for future challenges.
Every year, Hispanic-owned businesses contribute over $800 billion dollars to the U.S. economy, and Hispanic entrepreneurs are starting businesses at a rate roughly three times the general population. However, millions of Hispanic small businesses (HSBs) disproportionately impacted by COVID-19 are still working to financially recover.
According to a new survey released today from the United States Hispanic Chamber of Commerce (USHCC) and Nationwide in collaboration with Reimagine Main Street, the majority of Hispanic small businesses (HSBs) are optimistic about the future of their business, despite the fact that only two in five are optimistic about the future of the economy.
The study of more than 600+ HSBs around the country reinforced that in times of global economic distress, HSBs encounter disproportionate barriers in accessing and maintaining the capital and resources needed to run and scale a business. Namely, many owners struggle to find the right partners to help them make their business more resilient, highlighting opportunities for business owners and those who serve them.
Although survey results show that 69% of HSBs remain optimistic about the future of their business in the face of this year's economic headwinds, 56% do not have cash reserves. Many HSBs are experiencing the effects of high inflation (51%), soft demand (41%), increased input costs (77%), supply chain disruptions (74%) and a tight labor market (60%) without the benefit of a financial safety net.
“Our research, in partnership with Nationwide, has armed us with invaluable information to better understand the needs of our community and business owners. The results of this survey unequivocally demonstrate how the lack of appropriate and available resources to Hispanic businesses can hinder their success when they experience unexpected business challenges like the recent global pandemic,” says Ramiro A. Cavazos, President & CEO of the U.S. Hispanic Chamber of Commerce. “By advocating for more resources and services, as well as continuing to empower our network of over 260 local chambers, the USHCC remains duly committed to helping Hispanic businesses find equal footing in times of economic distress.”
While many HSBs are taking some important steps to prepare for future adversity, data shows many business leaders have opportunities to build and enhance relationships with financial institutions, creditors, and specialized subject matter experts who could help enhance their risk management strategy. Despite the fact that almost all HSBs (94%) are open to seeking guidance about ways to make their business more resilient, nearly half (44%) struggle to find the right partners to help them do so.
“If the pandemic taught us anything, it’s to expect the unexpected. The data shows the importance of small businesses preparing for the next potential risk, whether that’s another financial crisis or more localized business disruption,” explains Juan José Perez, President of Corporate Solutions at Nationwide. “There is no better way to prepare than investing time to build the right risk management network, including strong relationships with an advisor or financial professional, insurance agent and other experts who can help businesses plan for challenges ranging from attracting and retaining the best talent or accessing capital, to defending against cyber threats. Small business owners are often stretched thin and have to wear many hats, but they don’t have to go it alone when it comes to anticipating potential challenges in the future and putting plans in place to prepare for them.”
“Hispanic-owned small businesses account for roughly 5% of US national GDP and are an important source of jobs in communities across the country,” said Tammy Halevy, Executive Director of Reimagine Main Street, a project of the Public Private Strategies Institute. “The survey data highlights optimism and resilience of Hispanic entrepreneurs in the wake of pandemic-related shocks and current economic challenges and also points to opportunities for business owners to seek valuable guidance from trusted networks like the US Hispanic Chamber of Commerce and subject-matter experts like Nationwide.”
Currently, the USHCC is working across its platform of 260 local Hispanic chambers of commerce to offer HSBs access to 25+ programs to educate, accelerate, and mentor business owners. The Chamber has focused its advocacy on behalf of Hispanic-owned businesses, Hispanic chambers of commerce, and corporate partner members, guided by their “Three Cs:” Capital, Capacity, and Connections. The Chamber is an anchor member of the Reimagine Main Street network which has been focused on elevating solutions to help small business owners and the people they employ recover from the pandemic and build a more equitable economy.
Both Cavazos and Perez advise business owners looking to expand or enhance their team of risk management partners to leverage their network to identify opportunities to build relationships with advisors or financial professionals, insurance agents, attorneys, cyber security experts, benefits consultants, creditors and other experts who can help them plan for resilience. These relationships can come from personal or professional connections with other business owners or organizations like local Hispanic chambers of commerce from around the country.
To help business owners think about planning for resilience, Nationwide has created a risk management checklist that can serve as a discussion guide with advisors or financial professionals.
This poll is part of a regular series of surveys of diverse small business owners developed by Reimagine Main Street in collaboration with network partners including the United States Hispanic Chamber of Commerce. The online survey was fielded from June 9 to July 6 using a convenience sample of small employers with up to 500 employees. The survey was available to respondents in both English and Spanish. Business owners were contacted by email using lists cultivated by the Public Private Strategies Institute and the USHCC membership list. The national sample of Hispanic small business owners included 671 respondents.