As the fastest growing group of entrepreneurs in the United States, Hispanic business owners have played a critical role in the economy's recovery from the coronavirus pandemic. Despite this surge, Hispanic and Latin Americans continue to face significant barriers to success including lower incomes and loan rates than their white counterparts.
In pre-pandemic times, these businesses generated about $500 billion in annual revenue and employed 3.4 million people, according to a report from Stanford University. Even during the pandemic Hispanic and Latino-owned businesses have outpaced white-owned businesses in revenue growth as Hispanic and Latino-owned businesses have grown their revenue at a compound annual growth rate of 25% compared to 19% for white-owned businesses, the report found.
"Latinos have an entrepreneurial spirit," Juan Hernandez III, the CEO and Co-founder of investment non-profit Creser Capital, tells CNBC Make It. "A lot of that is driven by wanting to support their families, being able to fund many of our cultural traditions, and also being active in their communities … as long as Latinos are healthy and able, you're going to see us working hard and launching businesses for a long time, it's what we do."
CNBC Make It spoke to five Hispanic entrepreneurs about the biggest challenges they faced starting their businesses, how their heritage has influenced them as leaders and the advice they have for the next generation of entrepreneurs.
CEO and Co-founder of Creser Capital
Santa Rosa, California
How we can address the racial wealth gap
We created this financial institution on the belief that Hispanic small business owners need to have investment, education and financial coaching in order for them to transform their lives, and eventually our effort is to close the wealth gap in Sonoma County, California. People don't really understand that Sonoma County has gone through a lot in the past few years: several devastating wildfires, then the coronavirus pandemic. Hispanics and Latinos bore the brunt of those crises. We were working in the vineyards and hospitality business, then as essential workers on the frontlines of the pandemic.
We know that access to education and affordable health care is a bridge to close the wealth gap, but entrepreneurship is also a way to close the wealth gap. I want to help close that gap for Hispanic and Latino business owners by providing them capital at the three stages of development, at the launch, growth and scaling stages. In any situation, I want them to know, 'You're supported, we got you.'
My biggest inspiration
I'm the product of two ladies that were entrepreneurs. My grandmother on my dad's side, Maria, was a big influence on me. She raised eight kids in a Mexican barrio in Houston, Texas. She used to make menudo [a traditional Mexican soup] in the mornings, she sewed clothes and she was a midwife. She was an entrepreneur in her community back in the 1940s, and by herself, she was able to provide for her kids. Not only that, but she bought a house for herself and her family after her husband left her. She's incredible.
On my mother's side, my grandma, Ramona, also had an entrepreneurial spirit. She used to make handmade pillows, blankets, and she sold them to raise money to send back to low-income people in Mexico and for missionary efforts through her church. Those stories and their spirit really led me to the work that I'm doing now.
Founder and Owner of Karina Cruz Enterprise, K's Balloons Inspirations
How my business saved my life
About three years ago, right after my divorce, I needed to make money, and I needed to rebuild my sense of self. It was a very difficult, challenging time. I thought back to when I was 16, shortly after I got married, when my father signed me up for a balloon decorating class in Mexico. He wanted me to have professional skills and be able to make my own income.
After the divorce, I returned to this skill, and started teaching balloon decorating classes at local schools and churches in Dallas. This work has infused life into my body and spirit. The purpose of my work is not simply about balloons — I want to inspire other women to improve their lives by starting their own businesses and discovering their own gifts and talents.
The biggest challenge I had to overcome
It took a long time for me to be able to believe in myself and realize my power. I went through various therapies, workshops and programs ... this is what empowered me. Now, I try to empower other women in my classes by teaching them the technique of balloon decoration and financial skills. These women inspire me and give me strength.
Founder and owner of Buena Vista Optical
Improving access to health care in Hispanic and Latino communities
I was raised by a Mexican mother and Puerto Rican father, and spent part of my childhood in Puerto Rico, so I always spoke Spanish at home. After graduating from optometry school, my husband, Dr. Todd W. Sims, and I decided to open a practice in Chicago, as we both had family there and knew there were a lot of Spanish-speaking patients in the city that were not getting the care they needed. The moment we opened, word of mouth spread, because if there's anything you need to know about Latinos, it's that when we find a doctor we love, we tell everybody.
All of our staff is bilingual, so the moment you call to schedule an eye exam, you're able to speak with someone in Spanish. If the doctor we have on call is not fluent in Spanish, we have a scribe in each room to help translate. Having bilingual staff is so essential, especially in medicine where communication needs to be very clear, especially when explaining treatment or hearing a patient's concerns.
So many times Spanish-speaking patients will tell us that they've been seeing another doctor for years and have never been able to understand their condition until they've stepped foot in our office. Even when we refer patients to a specialist, they're usually not bilingual and the patient has no idea what's going on. They'll come back to us for help. A lot of optometrists in the area are actually now paying us to be able to explain treatments and issues to patients, which is a little bit frustrating. We need to prioritize hiring bilingual or multilingual staff, especially in medical offices and in neighborhoods with large immigrant populations.
Founder and CEO, Maria Empanada
How the pandemic impacted my business
Before the pandemic, we had five locations in Colorado, and we had to temporarily shut down all of them. We ended up permanently closing two locations because those restaurants were only near offices, and nobody was going to offices, so it was completely deserted, there were no customers. The pandemic hurt us a lot. It was terrible. But at the same time, we were able to get creative and think of solutions fast. We packaged and delivered empanadas. We adapted a better online ordering system, figured out how to ship empanadas nationwide and taught online empanada making classes. We're a lot better now.
Staying true to myself
At first, people were skeptical about my food and my business because they didn't know about Argentinian culture or flavors, or even what an empanada was. Some customers came in and asked for a fork and knife, but we don't eat empanadas with forks and knives in Argentina. Few people came into the store and everyone had suggestions about what I should do, like adding frijoles [beans] or rice on the menu, but in Argentina, you don't eat an empanada with those sides. Even if the temptation to change was there, I set firm boundaries and kept the business pure and authentic to my culture. I think that's the gift I've given to the United States: bringing in something foreign and different that can now be celebrated.
Many of our artesanas, the women who help make the empanadas and the closures on the dough, are Hispanic. Many are grandmothers who find it difficult to get a job in the U.S. Some don't speak English. Growing up, my family didn't always have jobs or an income, and the economy in Argentina was very unstable. Now, I have the opportunity to give jobs in the United States, which is so beautiful.
Owner and CEO of Manolo's Bakery
Charlotte, North Carolina
What I want aspiring entrepreneurs to know
I came to the United States because I always believed in the American dream, that if I came here and I worked hard, I could reach any dream. But you have to go from dreaming and having a vision to actually putting in the work toward your goal. There's a long, hard road to success. It's never easy starting your own business. But there are a couple tools that can help you: first, study and find a mentor, whether it be a professor, a business leader you admire or someone in the industry you want to work in. Meet and learn from people smarter than you.
You might need to sacrifice some things in your life to achieve your dream, like money or time, but never give up. Finally, get involved with your local community, and find ways to give back to them through your business. Word of mouth will help your business, and you'll spend less on advertising. It's also important to share in your success with others, and inspire future leaders.