Posted by: Richie Bernardo

Expect the Hispanic and Latino community’s contributions to the U.S. economy to be nothing short of monumental in the coming decades. Not only is this demographic expected to make up a third of the U.S. population by 2050 — translating into immense buying power — this group is also creating businesses at 15 times the national rate, according to one report.

The timing therefore could not be more appropriate for Hispanic entrepreneurs to bring their business ideas to fruition. But where is the most fertile ground for a Hispanic-owned enterprise? To answer that question, WalletHub’s analysts compared the 150 largest U.S. cities across 21 key indicators of business friendliness toward Hispanic entrepreneurs. Our data set of 21 key metrics ranges from Hispanic entrepreneurship rate to median annual income of Hispanics to share of Hispanics with at least a bachelor’s degree. Read on for our findings, expert business insight from a panel of researchers and a full description of our methodology.

1. Main Findings
2. Ask the Experts
3. Methodology

Main Findings Embed on your website<iframe src="//d2e70e9yced57e.cloudfront.net/wallethub/embed/6491/geochart-hispanic.html" width="556" height="347" frameBorder="0" scrolling="no"></iframe> <div style="width:556px;font-size:12px;color:#888;">Source: <a href="http://ift.tt/2oLm6Yh;

 

Overall Rank	City	Total Score	‘Hispanic Business-Friendliness’ Rank	‘Hispanic Purchasing Power’ Rank
1	Laredo, TX	66.39	1	2
2	El Paso, TX	56.34	5	6
3	Pembroke Pines, FL	56.19	4	7
4	Corpus Christi, TX	55.85	11	4
5	Brownsville, TX	53.73	9	13
6	Hialeah, FL	53.39	2	81
7	Irvine, CA	53.22	28	3
8	Amarillo, TX	52.56	16	11
9	Springfield, MO	52.38	10	17
10	Oklahoma City, OK	52.15	14	14
11	Gilbert, AZ	51.93	91	1
12	Chesapeake, VA	50.86	31	9
13	San Antonio, TX	50.81	27	12
14	Grand Prairie, TX	50.58	54	5
15	Plano, TX	50.24	19	21
16	Lubbock, TX	50.10	22	16
17	Sioux Falls, SD	50.06	12	41
18	Tulsa, OK	50.05	13	39
19	Miami, FL	49.78	3	93
20	Overland Park, KS	49.71	21	27
21	Fort Worth, TX	49.14	49	10
22	Irving, TX	49.11	50	8
23	Boise, ID	49.03	20	34
24	Port St. Lucie, FL	48.90	32	22
25	Fort Lauderdale, FL	48.56	6	95
26	Orlando, FL	48.54	30	31
27	Garland, TX	48.47	35	20
28	Austin, TX	48.02	51	15
29	Tampa, FL	48.01	7	103
30	Anchorage, AK	47.84	18	59
31	New Orleans, LA	47.80	46	24
32	St. Petersburg, FL	47.66	44	29
33	Henderson, NV	47.53	24	52
34	Aurora, CO	47.43	37	33
35	Raleigh, NC	47.21	33	46
36	Houston, TX	47.11	34	45
37	Charlotte, NC	46.97	43	37
38	Denver, CO	46.93	39	40
39	Jacksonville, FL	46.82	29	61
40	Salt Lake City, UT	46.80	8	122
41	Cape Coral, FL	46.80	23	69
42	Baton Rouge, LA	46.67	42	44
43	Dallas, TX	46.21	38	55
44	Scottsdale, AZ	46.08	36	60
45	Virginia Beach, VA	46.07	40	57
46	Colorado Springs, CO	46.05	41	58
47	Atlanta, GA	45.71	17	101
48	Greensboro, NC	45.19	59	35
49	Arlington, TX	44.85	53	56
50	Durham, NC	44.82	57	47
51	Mobile, AL	44.75	78	28
52	Fremont, CA	44.60	79	30
53	Peoria, AZ	44.48	68	36
54	Chandler, AZ	44.28	90	18
55	Chula Vista, CA	43.78	81	38
56	Washington, DC	43.61	103	23
57	St. Louis, MO	43.56	26	117
58	Huntsville, AL	43.50	75	48
59	Nashville, TN	43.32	80	51
60	Reno, NV	43.08	60	72
61	Shreveport, LA	42.98	52	88
62	Wichita, KS	42.97	58	78
63	Lincoln, NE	42.78	69	67
64	Kansas City, MO	42.71	45	108
65	Norfolk, VA	42.67	63	76
66	Knoxville, TN	42.45	66	73
67	Oxnard, CA	42.44	119	18
68	Albuquerque, NM	42.44	62	80
69	Fayetteville, NC	42.09	48	107
70	Bakersfield, CA	41.96	123	26
71	Chattanooga, TN	41.57	47	121
72	Fort Wayne, IN	41.49	74	85
73	Moreno Valley, CA	41.40	122	32
74	Portland, OR	41.31	82	75
75	Fontana, CA	41.28	126	25
76	Tempe, AZ	41.21	93	68
77	Seattle, WA	41.19	99	63
78	Richmond, VA	41.15	65	96
79	Huntington Beach, CA	41.13	56	104
80	Honolulu, HI	40.93	25	134
81	Winston-Salem, NC	40.89	76	91
82	Aurora, IL	40.76	119	50
83	North Las Vegas, NV	40.73	116	53
84	Santa Rosa, CA	40.64	97	71
85	Omaha, NE	40.53	72	99
86	Columbus, GA	40.43	89	84
87	Louisville, KY	40.43	110	66
88	Augusta, GA	40.31	101	74
89	Tallahassee, FL	40.29	67	110
90	Las Vegas, NV	40.22	92	86
91	Indianapolis, IN	40.21	95	83
92	Newport News, VA	40.02	70	111
93	Grand Rapids, MI	39.85	83	98
94	Santa Ana, CA	39.81	87	92
95	Columbus, OH	39.57	135	49
96	Rancho Cucamonga, CA	39.53	115	70
97	San Francisco, CA	39.53	71	118
98	San Bernardino, CA	39.50	124	62
99	Baltimore, MD	39.46	101	89
100	San Diego, CA	39.44	73	119
101	Ontario, CA	39.33	138	43
102	Lexington-Fayette, KY	39.23	129	65
103	Birmingham, AL	39.22	55	131
104	Phoenix, AZ	39.20	88	102
105	Riverside, CA	39.08	136	54
106	Madison, WI	38.97	64	127
107	Stockton, CA	38.92	118	79
108	Mesa, AZ	38.88	104	96
109	Santa Clarita, CA	38.85	134	64
110	Memphis, TN	38.83	84	116
111	Montgomery, AL	38.75	113	87
112	Little Rock, AR	38.60	61	133
113	Jackson, MS	38.56	15	149
114	San Jose, CA	38.48	96	109
115	Anaheim, CA	38.38	100	106
116	Fresno, CA	38.21	111	100
117	Oceanside, CA	37.80	85	124
118	Sacramento, CA	37.53	108	112
119	Glendale, AZ	37.50	106	115
120	Pittsburgh, PA	36.90	149	42
121	Tucson, AZ	36.83	105	126
122	Yonkers, NY	36.80	86	129
123	Modesto, CA	36.51	143	82
124	Cincinnati, OH	36.17	127	114
125	Des Moines, IA	36.15	145	77
126	Minneapolis, MN	36.02	141	94
127	Spokane, WA	35.81	144	90
128	Tacoma, WA	35.71	139	105
129	Chicago, IL	35.59	107	132
130	Garden Grove, CA	35.58	130	120
131	St. Paul, MN	35.25	128	125
132	Akron, OH	35.25	94	140
133	Detroit, MI	35.03	114	136
134	Toledo, OH	34.65	121	137
135	Rochester, NY	34.17	98	144
136	Oakland, CA	33.95	142	123
137	Los Angeles, CA	33.86	117	142
138	Boston, MA	33.73	77	148
139	Worcester, MA	33.68	109	145
140	Milwaukee, WI	33.68	137	130
141	Long Beach, CA	33.52	131	138
142	Vancouver, WA	33.22	147	113
143	Buffalo, NY	32.97	132	139
144	Glendale, CA	32.91	133	141
145	Newark, NJ	32.06	125	146
146	Jersey City, NJ	31.77	140	143
147	Cleveland, OH	31.62	146	135
148	Philadelphia, PA	31.38	148	128
149	New York, NY	30.44	112	150
150	Providence, RI	26.93	150	147

Ask the Experts

To expand the discussion about the present and future of Hispanic entrepreneurship in the U.S., we asked a panel of minority-business experts to share their thoughts on the following key questions:

1. What are the biggest challenges faced by Hispanic entrepreneurs?
2. Should government authorities create programs or other incentives to encourage Hispanic entrepreneurs? If so, what types of programs or incentives?
3. What tips do you have specifically for Hispanic entrepreneurs interested in starting their own business?
4. In evaluating the best cities for Hispanic entrepreneurs, what are the top five indicators?

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• Jacob L. Vigdor Daniel J. Evans Professor of Public Policy and Governance at University of Washington, Evans School of Public Policy and Governance
• Guillermo de los Reyes Heredia Associate Professor of Latin American Literature and Cultural Studies, and Director of Undergraduate Studies in the Department of Hispanic Studies at University of Houston
• Eric Hershberg Director of the Center for Latin American and Latino Studies, and Professor of Government in the School of Public Policy at American University
• Zulema Valdez Associate Professor in the Department of Sociology at University of California, Merced
• Robert W. Fairlie Chair and Professor in the Department of Economics at University of California, Santa Cruz
• Barbara Bird Professor of Management and Director of the Latino Entrepreneurship in the DC-Metro Area Project at American University, Kogod School of Business
• Eileen Díaz McConnell Associate Professor in the School of Transborder Studies at Arizona State University
• Sarah Deutsch Professor of History in the Trinity College of Arts and Sciences at Duke University
• D. Daniel Sokol Professor of Law at University of Florida Levin College of Law
• Betty Francisco Founder and President of FitNation Ventures and Co-founder of the Latina Circle
• José R. Llanes Professor of Organization and Leadership in the College of Education at Auburn University
• Isaura Flores Assistant Dean and Associate Professor of Business Entrepreneurship at University of North Texas, School of Business
• Laura Huang Assistant Professor of Management and Entrepreneurship at the Wharton School of the University of Pennsylvania
• Andrea Guendelman Co-Founder and CEO of BeVisible
• Denisse Olivas Lecturer of Marketing and Director of the Center for Hispanic Entrepreneurship at The University of Texas at El Paso, College of Business Administration
• Angela Franco President & CEO of the Greater Washington Hispanic Chamber of Commerce
• Mark T. Schenkel Sr. Vice President of Finance for the United States Association for Small Business & Entrepreneurship, and Associate Professor of Entrepreneurship in the Jack C. Massey College of Business at Belmont University

Jacob L. Vigdor Daniel J. Evans Professor of Public Policy and Governance at University of Washington, Evans School of Public Policy and Governance What are the biggest challenges faced by Hispanic entrepreneurs? Aside from the challenges every entrepreneur faces -- uncertainty about the viability of a business model or location -- Hispanic entrepreneurs may have a particularly hard time accessing the credit they need to start up. Small business owners typically rely on more than just commercial banks -- help from family members or business partners can make a big difference. Hispanic families tend to come from the lower end of the wealth spectrum. Should government authorities create programs or other incentives to encourage Hispanic entrepreneurs? If so, what types of programs or incentives? A business idea doesn't necessarily become more viable as a function of the entrepreneur's ethnicity. In general, I'd be wary of government efforts to underwrite what is fundamentally economic risk-taking. If the main barrier to entrepreneurship is lack of access to family wealth, then government efforts to encourage savings and wealth-building would do more than anything else. What tips do you have specifically for Hispanic entrepreneurs interested in starting their own business? As a small business owner myself, I can tell you that there is no satisfaction greater than knowing that you are satisfying a need in your community, putting bread on your employee's tables, and having control over the operation. These things are great. The money is often not great. Census survey data reveal that self-employed people often earn less money per year than those who work traditional jobs, even though they often put in longer hours. Believe in your idea, be able to convey your enthusiasm to others -- employees, banks, customers -- and do whatever you can to start small. Be prepared to scrape by financially, but have the time of your life. Guillermo de los Reyes Heredia Associate Professor of Latin American Literature and Cultural Studies, and Director of Undergraduate Studies in the Department of Hispanic Studies at University of Houston What are the biggest challenges faced by Hispanic entrepreneurs? I believe some of the challenges have to do with access to information, knowledge of the new regulations, and insufficient funds to start-up a business. It is also difficult to venture and navigate outside their own community. Should government authorities create programs or other incentives to encourage Hispanic entrepreneurs? If so, what types of programs or incentives? Yes. First, providing enough funds for Hispanic entrepreneurs that are part of a program in which they can be informed about the new regulations, accessibility and how to navigate outside their own communities. There should be more federal funds to provide start-up packages to start businesses to invigorate their communities at large. What tips do you have specifically for Hispanic entrepreneurs interested in starting their own business?

1. Be informed about the new regulations;
2. Learn about your own community vis-à-vis other communities in your city;
3. Advertising your business is pivotal;
4. Make sure that all your papers are in order and up-to-date;
5. Seek trustworthy legal advice.

Eric Hershberg Director of the Center for Latin American and Latino Studies, and Professor of Government in the School of Public Policy at American University What are the biggest challenges faced by Hispanic entrepreneurs? I can say that a study conducted under auspices of the Center that I direct, identified a lack of access to credit as a major obstacle facing Hispanic entrepreneurs in the DC metropolitan area, and I understand that the scholarly literature suggests that this is a problem nationwide. Public policies aimed at strengthening Latino-owned firms -- and minority-owned firms more generally -- are especially important, given what we know about their critical role in maintaining mixed income neighborhoods in settings where gentrification brings about an increase in housing costs. Typically, public policies aimed at sustaining mixed income neighborhoods focus on access to affordable housing, which is essential, but so too is access to retail establishments that satisfy the preferences of diverse consumers. Latino-owned firms have an important role to play in this regard. Zulema Valdez Associate Professor in the Department of Sociology at University of California, Merced What are the biggest challenges faced by Hispanic entrepreneurs? Recent census figures indicate that Hispanics now constitute the largest American minority group. The rise of this population has coincided with an unprecedented growth in Hispanic business. The Hispanic share of American entrepreneurs grew from 10.5 percent in 1996 to over 20 percent in 2015. During the past ten years, the number of Hispanic-owned businesses has doubled, growing from 1.5 million to over 3 million. This rate of growth in business ownership is twice that of the general population. This year, the projected combined annual revenue of these businesses is over $450 billion dollars – an increase of over $100 billion dollars in the past six years. Clearly, Hispanic entrepreneurship is making a significant contribution to the American economy. Yet, not all Hispanic entrepreneurs succeed, and in fact, those who do are usually the exception rather than the rule. My research shows that without a doubt, Hispanics do not lack the ambition, drive, passion, or “entrepreneurial spirit,” to succeed in business ownership. Many, however, lack sufficient financial capital, access to credit, business networks, or business skills needed to thrive in business. The biggest obstacle for Hispanic entrepreneurs is securing sufficient startup capital. Many Hispanic entrepreneurs do not qualify for or even try to secure a bank loan. Instead, they use a small amount of personal savings, take out a second mortgage on their home, or borrow from family, friends, or their co-ethnic community. These sources rarely generate enough startup capital, which may lead to laying-off workers, just breaking even, relying on a spouse’s job to keep the business afloat, or eventual business closure. A second challenge for Hispanic entrepreneurs is developing meaningful social relationships within the American business world. The lack of access to business networks and information channels limits the degree to which Hispanics can secure needed resources and support for business success. Finally, many first-time Hispanic entrepreneurs start their businesses without a business plan. The lack of a business plan leads to many avoidable problems, like knowing what to charge for a service or product to make a profit, how to advertise to a targeted clientele, and understanding the costs of running the business, from securing a location to purchasing supplies. Should government authorities create programs or other incentives to encourage Hispanic entrepreneurs? If so, what types of programs or incentives? Hispanics who are interested in starting their own businesses would benefit from seeking out local business organizations like the Chambers of Commerce or Hispanic business associations, or identifying non-profit organizations with a mission to foster local business development, microfinance institutions, or local business incubators. Beyond providing crucial information on funding or establishing business connections, these organizations often provide training in business and financial planning, navigating financial institutions or locating angel investors, and web development and social media tools, to increase the chances of business success. What tips do you have specifically for Hispanic entrepreneurs interested in starting their own business? Government authorities can play a role in fostering Hispanic entrepreneurship. Hispanic small business owners have benefited from loans and tax subsidies provided by government agencies like the Small Business Administration. Others have made substantial progress by pursuing and qualifying for programs such as the 8(a) business development program for disadvantaged individuals and businesses. Such government programs are crucial and should be expanded to promote Hispanic business. There is a particular need for programs that are geared towards the Hispanic self-employed (with no employees), who make up a disproportionate number of Hispanic business owners. For example, the Small Business Administration currently offers a micro-loan program that works with non-profit agencies as intermediaries; this program could be expanded and centralized to promote its existence, streamline access, and create consistency from state to state. An SBA micro-loan could make the difference between a Hispanic entrepreneur who is self-employed with no employees and just breaking even, to one who can hire employees, expand the business, and perhaps even turn a profit for the very first time. There are good reasons for the government to promote and encourage Hispanic entrepreneurship. First, although most Hispanic entrepreneurs are self-employed (with no employees), securing a government loan or tax break may foster business growth and development, which would create jobs. Second, by providing opportunities for Hispanics to start businesses, especially those with innovative ideas but without access to sufficient start-up capital, the government may sponsor a successful high-growth company. Third, the end of the Great Recession has been followed by a “secular stagnation,” characterized by a significant decline in business dynamism and an increase in business consolidation. Promoting new enterprise through policy may foster entrepreneurial activity among those would-be entrepreneurs who might otherwise wait for better market conditions, which may help spark a more robust economic recovery. Finally, opportunities for business start-up should be encouraged from diverse groups and diverse companies, to increase the potential for the development of innovative and creative enterprises among ethnic and racial minorities and women, who are less likely to start enterprises or succeed in business. Robert W. Fairlie Chair and Professor in the Department of Economics at University of California, Santa Cruz What are the biggest challenges faced by Hispanic entrepreneurs? The two biggest challenges that I found in my research are the lack of access to financial capital and limited human capital. Should government authorities create programs or other incentives to encourage Hispanic entrepreneurs? If so, what types of programs or incentives? I think that the following programs could be useful:

• Disadvantaged business contracting programs;
• Programs to build wealth.

What tips do you have specifically for Hispanic entrepreneurs interested in starting their own business? One thing often overlooked is gaining work experience in the industry of intention for the business. For example, if you want to start a restaurant then go work in a restaurant first. I found that this is very important for business success. Barbara Bird Professor of Management and Director of the Latino Entrepreneurship in the DC-Metro Area Project at American University, Kogod School of Business What are the biggest challenges faced by Hispanic entrepreneurs? One of the biggest challenges is planning. We did not ask that question, but were drawn to the study because of an earlier study that found immigrant entrepreneurs from Central America did less short and long-term planning than did immigrant entrepreneurs from South America. We attribute the lack of planning in part, to differences in education and industry experience, as well as differences in financial capital. In our study, over 30% had a loan and 50% started with financial capital of over $3000. So, our sample does not appear particularly needy. However, like all entrepreneurs, the Latinos say they want more access to funding -- again we did not ask. Like many entrepreneurs, they need to plan for target markets, competition etc. Should government authorities create programs or other incentives to encourage Hispanic entrepreneurs? If so, what types of programs or incentives? Latinos are a big part of the DC metro community and are critical to the economic well-being of the Latino (and other) economy. I suspect that a more representative sample would find a need for government and NGO support for preparing for and the first years of starting a venture. We were unable to find a business advisory group in Maryland that could provide us the access to client, largely because they were strapped for time and office space. Other service providers do not provide business advice. More is needed, especially in nearby Maryland counties. What tips do you have specifically for Hispanic entrepreneurs interested in starting their own business? Get advice on planning. No one is going to give a loan or make a personal investment if you do not have a plan. You can probably start a self-employment business without much capital beyond what your family and friends can contribute. But to grow the business so you can employ others, needs more resources (loans, investors, office space, equipment, formalized business with a web page, bank account, and business address among other things). Self-employment and very small businesses (where employees are only family members or close friends) face issues of survival beyond the founder. Eileen Díaz McConnell Associate Professor in the School of Transborder Studies at Arizona State University What tips do you have specifically for Hispanic entrepreneurs interested in starting their own business? Learn about the demographics of your targeted market. There are many great local, state and regional sources of information about the age, racial/ethnic composition, income, wealth, and other characteristics of individuals and households that could be relevant to your business. Draw on your rich social networks to develop and promote your business. Get involved with a local Hispanic Chamber of Commerce, if available. Use social media to advertise and develop your brand. Consult experts in the areas where you might need assistance. Stay authentic to who you are and why you believe in your business. Sarah Deutsch Professor of History in the Trinity College of Arts and Sciences at Duke University What are the biggest challenges faced by Hispanic entrepreneurs? One thing that seems important in this regard is the tremendous variety of people lumped under the label "Hispanic" who come or came to the US with wildly different amounts of capital and education, and have communities in the U.S. with vastly different resources for supporting entrepreneurship. Another major factor is the production of Hispanic media generated in other Spanish-speaking places in the Americas that provides a unique vehicle to market to Spanish-speaking U.S. residents, setting them apart from other ethnic and immigrant groups and, by that marketing, operating as a homogenizing force on the "Hispanic" consumer. Of course, not all "Hispanic" entrepreneurs aim at "Hispanic" consumers, indeed many entry-level businesses build from experience and networks in low-wage industries including food, lawn, and cleaning services that serve a largely non-Hispanic clientele. The low capital investment in these (with the possible exception of food) makes them less vulnerable to the usual high rates of failure in small business. Finally, the growth of credit unions particularly serving Spanish-speaking populations such as the Latino Community Credit Union in North Carolina, provide a wide range of reliable financial services and advice particularly geared to an immigrant clientele, a clientele often wary of or not so welcomed at major financial institutions. D. Daniel Sokol Professor of Law at University of Florida Levin College of Law What are the biggest challenges faced by Hispanic entrepreneurs? There are a series of challenges, many of which are inter-connected: lack of financing, lack of entrepreneurial legal exposure (how best to navigate legal and regulatory issues that emerge, such as tax, entity choice, and corporate governance so as to identify and solve issues earlier and cheaper), an under-developed entrepreneurial eco-system of early stage investors and advisers dedicated to Latino entrepreneurship in both small enterprise and venture capital backed growth companies. Should government authorities create programs or other incentives to encourage Hispanic entrepreneurs? If so, what types of programs or incentives? The best incentive is for the government to help with education. Overall, the best investment is in financial literacy - a program that provides basics of finance and accounting. However, there are other areas where government support can create a more robust group of Latino entrepreneurs. There is an under-supply of Latino engineers and Latino majors in business. Access to education is a formidable challenge and so government incentives to help with student debt, particularly for STEM and business majors would improve the chances for entrepreneurial success. Further, with lots of Latinos in the armed forces, the government could help increase programs on entrepreneurship for members of the armed forces. What tips do you have specifically for Hispanic entrepreneurs interested in starting their own business? A few things come to mind: create and refine a business plan, analyze the potential market in terms of size and growth potential, barriers to entry, and most importantly, be passionate about the business. Betty Francisco Founder and President of FitNation Ventures and Co-founder of the Latina Circle What are the biggest challenges faced by Hispanic entrepreneurs? The biggest challenges for Hispanic entrepreneurs are limited access to seed and growth capital, as well as social capital - the connections and resources needed by businesses to scale and succeed. Hispanic entrepreneurs often start with fewer assets than their non-Hispanic counterparts. This restricts their ability to invest sufficient capital in their ventures or to accelerate growth. Hispanics are also less likely to seek equity funding, instead preferring to borrow from friends, family or credit cards. As a result, Hispanic/Latino-owned businesses tend to be smaller and grow at a slower pace. Those who do pursue loans, often bump up against historical lending barriers faced by minorities, and access to equity financing, such as venture or private equity is almost impossible without the “right” connections. Immigrant entrepreneurs may also face additional challenges around language, cultural and business norms; limited business education and limited access to the political and social networks need to grow. Should government authorities create programs or other incentives to encourage Hispanic entrepreneurs? If so, what types of programs or incentives? Hispanic entrepreneurs represent one of the largest drivers of US economic growth, according to the latest research by the Stanford Latino Entrepreneurship Initiative. While Hispanic are launching businesses 10 times faster than the general population, most are small and are not getting to scale. So it’s in the interest of government to create policies, programs and incentives that (1) reduce the administrative barriers to entrepreneurship, (2) foster capital availability to seed and grow Hispanic businesses and (3) are broadly accessible and well-communicated in language within the Latino entrepreneurial community. For example, incentives that encourage lending and investment in Latino-owned businesses can help them access much needed funding. Fast tracking regulatory approvals, certifications (such as MBEs and MWBEs), and permitting for businesses can get them launched faster. Programs that focus on education and mentorship of Latino entrepreneurs are critical to creating high growth businesses. Additionally, creating wealth and accessible pools of capital is not just the responsibility of government but also of the private Hispanic business sector. It’s incumbent upon the Hispanic community to look within and foster investing in Latino-owned businesses as a way to strengthen entrepreneurs and the communities in which they operate. What tips do you have specifically for Hispanic entrepreneurs interested in starting their own business? Immerse yourself in the start-up ecosystem to get educated around the resources available to entrepreneurs in your community. Do this by attending educational events geared to entrepreneurs and start-ups. Leverage organizations such as SBA/SCORE, Chambers of Commerce, your city’s economic development office, and local innovation centers. Develop a short business plan and pitch deck for your business idea so you can present it easily to others. Seek out accelerator programs and start-up competitions such as MassChallenge, TechStars, 500 Start-Ups, or university-based incubator programs. If you’re a woman-entrepreneur, there are a growing number of programs geared to advancing women-led ventures, like Babson College’s WIN Lab for women entrepreneurs. Leverage college and universities as thought partners and human capital providers; many schools offer interns or student groups that provide consulting, market research and competitive analysis for new ventures. More importantly, act strategically by leveraging your existing network to meet others who can mentor, advise and connect you to resources and capital, or grow a new network that is more closely affiliated with the business venture you are developing. José R. Llanes Professor of Organization and Leadership in the College of Education at Auburn University What are the biggest challenges faced by Hispanic entrepreneurs? I do not see any particularly unique challenges that come from being an Hispanic. If you come from a poor background, you probably do not have friends who can help you network and make connections, but that’s true of anybody raised poor. At some point, 1980’s for example, banking discriminated against Hispanics and I found they required more collateral, lent less and at higher rates. By the 1990’s, most banks realized this was counterproductive. If anything, Hispanics have some advantages. Bilinguality is the lingua franca of Hispanic communities around the US and so they benefit from this. In a 1982 study, I found that Mexicans who were part of the Migrant Worker stream were overrepresented in the ranks of Hispanic Entrepreneurs. I also calculated that in 1982, Cubans had 26 per 1,000 entrepreneurs, Mexicans 19 per 1,000 and Puerto Ricans 9 per thousand. This coincided with their immigrant status (Puerto Ricans were never immigrants) and education. I also learned there was a connection between parental occupation and entrepreneurship, with most entrepreneurs coming from families where at least one member was an entrepreneur. Should government authorities create programs or other incentives to encourage Hispanic entrepreneurs? If so, what types of programs or incentives? These have never worked very well. Government can help best when they set aside contracts and other opportunities (best geographically defined) for Hispanic entrepreneurship rather than engage in enterprise creation or financing directly. One approach they have never tried is to work with banks and other financial institutions to purchase a portion of the debt/equity investments made by these banks in underrepresented enterprises. This frees funds for new investment and shares risk with bank after the investment/loan is made. What tips do you have specifically for Hispanic entrepreneurs interested in starting their own business? Have a great idea you can get passionate about, check it out, check it out again, calculate what it will cost to get you to cash flow, engage a successful investor in assessing the idea and plan with you, find a mentor in the new enterprise community to work with you, and dedicate yourself to this new pursuit setting everything else aside. Isaura Flores Assistant Dean and Associate Professor of Business Entrepreneurship at University of North Texas, School of Business What are the biggest challenges faced by Hispanic entrepreneurs? Hispanics are a growing influence on the economy. As of today, one in six people are Hispanics. By 2060, one third of Americans will be Hispanic. Statistics show that one in ten Hispanics engage in entrepreneurial activities, but they face more challenges than the regular entrepreneur. Hispanic entrepreneurs face multiple challenges when they decide to start a business: If they come from low income families, they fail more often than white entrepreneurs, for example. Another challenge is the access to capital. Banks and other lending institutions are becoming too difficult to work with, giving them the option of shark lenders who only take advantage of them. Language barrier is an important barrier for those who are recent immigrants, and they depend on their kids to communicate, making the entrepreneurial activity even more difficult. Should government authorities create programs or other incentives to encourage Hispanic entrepreneurs? If so, what types of programs or incentives? Absolutely! There are many ways the government can help Hispanic entrepreneurs. The Small Business Administration would be a great vehicle to reach Hispanic entrepreneurs by offering programs tailored for them. Those programs should include access to capital, use of technology to build businesses, business language and others. If the SBA works with universities and high schools, then those programs will be more effective. What tips do you have specifically for Hispanic entrepreneurs interested in starting their own business? I would recommend them to reach out. I think that they need to reach to universities, chambers of commerce and government organizations to find out how they can help. I strongly advise Hispanic entrepreneurs to never give up. The entrepreneurial process is difficult at first, but once it is working, the sky is the limit. Laura Huang Assistant Professor of Management and Entrepreneurship at the Wharton School of the University of Pennsylvania What are the biggest challenges faced by Hispanic entrepreneurs? Some of the challenges are related to the venture itself - and demonstrating that the product or service being proposed is needed, is of value, and is something that people are willing to pay for. But this isn't anything unique to Hispanic entrepreneurs - it's something that all entrepreneurs face. But Hispanic entrepreneurs, in particular, also have to demonstrate that they can execute and demonstrate that any disadvantages they may face (either real or perceived) are ones that will actually give them an advantage, that they are uniquely situated because of who they are, to succeed in the marketplace. Should government authorities create programs or other incentives to encourage Hispanic entrepreneurs? If so, what types of programs or incentives? I think programs that provide assistance with early-stage issues that entrepreneurs may face would be useful. There are problems that all entrepreneurs will face and there aren't always mentors and experts to help if these entrepreneurs are not in a network that has a large presence in entrepreneurship. So programs that can assist Hispanic entrepreneurs in this regard would be useful. What tips do you have specifically for Hispanic entrepreneurs interested in starting their own business? Be willing to take the leap, but also think through some early- stage considerations before taking the leap. Make sure to do your research and think about the risks and hurdles you will face, and how you might already begin to address these hurdles. Andrea Guendelman Co-Founder and CEO of BeVisible What are the biggest challenges faced by Hispanic entrepreneurs? Lack of Assets: Latinos are more likely to come from low-income households. Because of this, they don't have access to the family and friends’ funds which has become critical to finance the early days of a startup. Lack of Social Capital: For Latinos pursuing technology startups, access to social capital is yet another obstacle. You have to know somebody and you have to meet people who know the answers. There aren’t a lot of people of color who are in decision making positions and having more in common with the person making the funding decision make it easier. The children of elite have the social connections to find investors and mentors for their businesses. For Latino founders who did not go to Stanford, the chances of getting into Y Combinator or gaining the opportunity to pitch to VCs is extremely low — less than 1%, according to numbers from venture capital clearing­house, CB Insights. Lack of Safety Nets and Leisure: The children of the elite have the safety nets to take risks in their 20s. They have less college debt and can incur the opportunity costs of lost wages to work for startups. Many of the barriers Latinos face in the startups world, mirror those that we faced in college. Should government authorities create programs or other incentives to encourage Hispanic entrepreneurs? If so, what types of programs or incentives? Make College More Accessible: Colleges and universities can be engines of social and economic mobility. However, they need to rebalance their financial aid packages to make these opportunities accessible to all. More grants and fewer loans (and work-study) should be offered. Students need the time to tap into resources while they are in school, but cannot do so if they are struggling to balance school and multiple jobs. Once they graduate, they lack the edge needed to break into the innovation economy when they start their life with stifling amounts of student loan debt. Promote Tech Equity: Accelerators — which offer funding, resources, support and mentoring for great new ideas— are this century’s version of higher education. As such, they must begin to see diversity as integral to their mission and success. How innovative is it, if it is not diverse and accessible only to a few? Accelerators and venture capital firms should disclose the number of minority founders that they have supported each year. Transparency will result in more accountability and change. The tech sector needs to continue to cast a wider net in recruiting, take a hard look at implicit bias in hiring and promotion, and realize the disparate impact created by unpaid versus paid internships. Spread the Social Capital: Networking, mentoring and sponsorship remain integral to success. With the help of technology, Latinos are successfully networking with other Latinos across the world. In addition to these efforts, we need more cross-group mentoring and sponsorships. While giving back and giving to those with less is important, taking someone along with you is powerful. It is critically important that everyone who has “made it” or “is making it,” especially non-Latinos, commit themselves to sharing the insider knowledge they were given and making a space for someone else outside of their network to have the same opportunities. What tips do you have specifically for Hispanic entrepreneurs interested in starting their own business? The number one advice is to become comfortable taking risks and ignoring the opinion of the family. The number two advice is to learn to have debt and take on credit. Startup founders who grew up poor often do not find success in the Valley because they lack a well-financed support network and resources to fall back on in case their startup fails, while facing family pressure to avoid taking risks since other family members need financial support. Denisse Olivas Lecturer of Marketing and Director of the Center for Hispanic Entrepreneurship at The University of Texas at El Paso, College of Business Administration What are the biggest challenges faced by Hispanic entrepreneurs? Hispanic business owners usually face a myriad of challenges in addition to the challenges faced by Anglo business owners. They usually have a harder time getting the proper resources to get their businesses off the ground and to expand them. Hispanics are an interesting case too because they can be very different from each other. They may have different backgrounds, countries of origin, education, and levels of acculturation. Usually, the better educated and acculturated business owners are, the better they tend to do in business and the easier it is to get around challenges. The more connected they are to their region, their customers, lending institutions, and regulations, the greater opportunities they will see for success and growth. The more experience they have in their industry, the better they do as well. However, having done research on this segment, I can see that despite seeing themselves as successful, they are still lagging behind in terms of revenue, payroll, and number of employees, among other things. The top three challenges I see across the board for most Hispanic entrepreneurs are: lower levels of resources, lower levels or lack of business education, and smaller business networks.

1. For the most part, Hispanic business owners start their businesses with fewer assets. They usually don’t have any family history of business ownership, but if they do, they are more likely to be successful. They are also more often denied loans by banks because they may not have the credit history, the level of assets, or the background necessary to be provided these loans. Sometimes, business owners don’t ask for loans due to cultural differences or their lack of awareness.
2. Lower levels of business training is also a big factor in success. Hispanic owners usually cite that they need business training to be successful. Having managerial, marketing, leadership, and communication experience is very helpful in managing and growing a business. Hispanics also have to deal with language issues, when they are not completely fluent, or not fluent at all in English, and have to communicate with vendors, employees, and customers.
3. Hispanic business owners overall have smaller business networks to draw from, as well. Even though they have large family and friend networks, these are not necessarily helpful when it comes to resources and advice. Having good business networks is important because they can learn from each other, they can get mentored, and they can learn of opportunities available in their industries. In addition to networks, having a proper business infrastructure in a city really helps to develop Hispanic businesses, and it helps to ensure that there is a push for everyone to attain their individual and collective goals. Cuban-Americans usually do very well because their business regions are well developed and supported, as they ensure they have networks and processes in place for success.

Should government authorities create programs or other incentives to encourage Hispanic entrepreneurs? If so, what types of programs or incentives? There are programs that are already in place that would be helpful to Hispanic entrepreneurs, but probably need more awareness. I also think that having organizations/programs that provide microloans to start ups would be very helpful as many larger banks don’t lend small amounts to starting businesses. I also think that promoting a culture of business within local governments where support and networks are developed and strengthened to create that infrastructure that I was talking about earlier, would be very helpful to foster a region of business and growth. What tips do you have specifically for Hispanic entrepreneurs interested in starting their own business? I can think of several things that make a Hispanic entrepreneur better prepared to start a business:

1. Create a business plan. This ensures that they have a roadmap with goals and strategies that will help them get there. Most Hispanic business owners don’t have a plan in place and this can be detrimental to a business.
2. Have a clear focus and mission of who they are and what they can provide for a customer. Those owners with a lack of focus have a harder time making it.
3. Join a local Hispanic Chamber of Commerce. Networking is so important! Joining a local chapter is very beneficial to find customers, vendors and opportunities for contracts, especially when the organization is dedicated to serving Hispanics and know how to help them.
4. Take some business courses and workshops. Try to develop business skills early in the game. The earlier they do it, the better they can handle situations and challenges.

Angela Franco President & CEO of the Greater Washington Hispanic Chamber of Commerce What are the biggest challenges faced by Hispanic entrepreneurs? I believe that the biggest challenges they face is access to capital and education on how to grow their business. Most Hispanics encounter higher borrowing costs, receive smaller loans and see their loan applications rejected more often than other ethnicities. Should government authorities create programs or other incentives to encourage Hispanic entrepreneurs? If so, what types of programs or incentives? I think that my main concern is that the government still doesn’t embrace how important and valuable the Hispanic business community is to the US economy. Moreover, I think the government should invest in organizations that are already doing entrepreneurship training and guidance. These community based-organizations have already been involved in the Hispanic community, gained their trust, and know how to reach them. For example, at the Chamber we have developed different programs to help minority businesses start or grow their business here in the DC Metro region, including but not limited to mentorship, business matchmakings and capacity building. What tips do you have specifically for Hispanic entrepreneurs interested in starting their own business? A few tips would be:

• Develop a clear business plan.
• Don’t be afraid to look for help. Organizations such as the Chamber are here to help you start, grow and do business.
• Network to build relationships that last with different communities. The main purpose of building relationships shouldn’t be “how am I going to benefit from you?” but about getting to know the person. At the end, we are all people, and people want to do business with people.
• Don’t limit yourself. Expand your network, not just network with people in your circle but expand beyond that.

Mark T. Schenkel Sr. Vice President of Finance for the United States Association for Small Business & Entrepreneurship, and Associate Professor of Entrepreneurship in the Jack C. Massey College of Business at Belmont University What are the biggest challenges faced by Hispanic entrepreneurs? Two of the biggest and related challenges I see are actually endemic to the entrepreneurial process: 1) a lack of assets to facilitate start-up, and 2) high failure rates during the early stages. Academics refer to the combination of these as the liability of newness (cf. the liability of smallness). The lack of available assets and capital available for investment hampers the ability to invest adequately in start-up resources at the outset. As a result, some businesses often do not get started off on a strong footing with the resources they need, a situation reflected in and then compounded by high early failure rates. This amounts to what might be labeled a snowball effect. While not particularly unique to Hispanic entrepreneurs, a significant number of individuals in this demographic segment are engaged in small businesses. For example, nearly 3 million small businesses were Latino owned, according to the 2013 Kauffman Index, and that number is projected to rise, driven by an increasing population. A key broad challenge with small businesses is that they are often started in well-established industries. That means industries that are fragmented, highly competitive, and tend to be accompanied by lower profitability margins. Thus, the challenge for successful growth by individuals entering into small businesses reflects the combination of the small scale and a highly competitive surrounding industry structure. Should government authorities create programs or other incentives to encourage Hispanic entrepreneurs? If so, what types of programs or incentives? The question of government incentives and programs for encouraging entrepreneurship is one great ongoing debate. On the one hand, no successful business ever gets off the ground without someone making the decision to start it. So from this perspective, incentivizing entrepreneurship and offering educational programming that improves the ability to execute entrepreneurial ideas benefits individuals under conditions of increasing pace of market and industry change spurred by globalization and international competition in which they otherwise might forgo such an option. Incentives and programming could serve as one means of ensuring a healthy economy for years to come by making the results of such efforts more effective in this sense. Yet on the other hand, many efforts to create programming and incentives are observed to lead to poor results. Scott Shane (2009, “Why encouraging more people to become entrepreneurs is bad public policy”, Small Business Economics 33, 141–149), for example, notes programming and incentive efforts amount to “lousy public policy” given the lack of evidence suggesting people create too few otherwise, or that they create the “wrong” businesses in the absence of government intervention. Moreover, he suggests there is evidence that an increase in the start-up of marginal businesses leads to an increased likelihood of failure or that these start-ups generate little employment and economic impact. I see validity in both perspectives. Encouraging prospective founders to leverage existing resources like SBDCs, SCORE, Chambers of Commerce, Universities, and other existing community resources over the creation of additional programming and incentives seems like the better option at this point in time. Here in Nashville, for instance, we have other outstanding existing community resources available at places like Nashville Entrepreneur Center and Casa Azafrán that work to create community-based support for entrepreneurs generally and for those with international backgrounds. Other cities have equally noteworthy institutions of this nature. All of these organizations have the ability to help prospective entrepreneurs better understand their motivations, the resources available, and how best to implement their ideas as they seek to achieve their entrepreneurial goals. What tips do you have specifically for Hispanic entrepreneurs interested in starting their own business? I would urge these prospective entrepreneurs to first spend some time intentionally trying to develop an understanding of why they want to start the business. What are the long-term goals with respect to income, wealth, family, and free time? Starting a venture is much more than just a choice about income. Second, I would encourage researching local support opportunities. Visit the local chamber of commerce. Talk with some faculty at local universities, as well as representatives from local SBDCs, etc. Doing these things will help provide a context for understanding better how to conceptualize a model and align expectations as the implementation of a business idea moves forward. Third, I would encourage adopting a strong orientation toward a “lean” or “bootstrapping” when it comes to early-stage investments. Doing so avoids wasting resources and/or accumulating debt, preserving flexibility and personal wealth in the process.

Methodology

In order to determine the best cities for Hispanic entrepreneurs, WalletHub’s analysts compared the 150 most populated U.S. cities across two key dimensions, namely “Hispanic Business-Friendliness” and “Hispanic Purchasing Power.” Our sample considers only the city proper in each case and excludes cities in the surrounding metro area.

We evaluated the two dimensions using 21 relevant metrics, which are listed below with their corresponding weights. Each metric was graded on a 100-point scale, with a score of 100 representing the most favorable conditions for Hispanic entrepreneurs. Data for metrics marked with an asterisk (*) were available at only the state level.

We then calculated the total score for each city based on its weighted average across all metrics and used the resulting scores to construct our final ranking.

Hispanic Business-Friendliness – Total Points: 60

• Share of Hispanic-Owned Businesses: Double Weight (~8.57 Points)
• Hispanic Entrepreneurship Rate: Double Weight (~8.57 Points)Note: This metric measures the number of Hispanic-owned firms adjusted for the Hispanic population.
• Average Growth of Hispanic Business Revenues (2012 vs. 2007): Full Weight (~4.29 Points)
• Business-Friendliness Score*: Full Weight (~4.29 Points)
• Entrepreneurial Activity Index: Full* Weight (~4.29 Points)
• Industry Variety: Full Weight (~4.29 Points)
• 5-Year Business Survival Rate: Full* Weight (~4.29 Points)
• Significant Startups per Capita: Full Weight (~4.29 Points)Note: This metric measures the 5- to 15-year survival rate of startups with at least five employees.
• Small-Business Loans per Total Number of Small Businesses: Full Weight (~4.29 Points)
• Average Monthly Rent for Office Space: Full Weight (~4.29 Points)
• Corporate Tax Rank*: Full Weight (~4.29 Points)
• Average Length of Workday (in Hours): Full Weight (~4.29 Points)

Hispanic Purchasing Power – Total Points: 40

• Affordability: Full Weight (~4.71 Points)Note: This metric was calculated as follows: Median Annual Income of Hispanics / Cost of Living.
• Income Growth for Hispanics: Full Weight (~4.71 Points)
• Housing Affordability for Hispanics: Full Weight (~4.71 Points)Note: This metric was calculated as follows: Median Annual Income of Hispanics / Median House Price.
• Hispanic Unemployment Rate: Full Weight (~4.71 Points)
• Percentage of Hispanic Residents: Full Weight (~4.71 Points)
• Hispanic Population Growth: Full Weight (~4.71 Points)
• Percentage of Hispanics with at Least a Bachelor’s Degree: Full Weight (~4.71 Points)
• Hispanic Housing Tenure: Half Weight (~2.35 Points)Note: This metric measures the Hispanic renter-to-owner ratio.
• City Growth: Full Weight (~4.71 Points)Note: This metric is based on WalletHub’s Fastest Growing Cities ranking.

 

Sources: Data used to create this ranking were collected from the U.S. Census Bureau, Council for Community and Economic Research, Bureau of Labor Statistics, Kauffman Foundation, Federal Deposit Insurance Corporation, Tax Foundation, LoopNet, Thumbtack and WalletHub research.

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