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 more than 25% of the U.S. population by 2050 — translating into large 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 make their business ideas a reality. But what places have the best conditions for a Hispanic-owned enterprise? To answer that question, WalletHub compared more than 180 U.S. cities across 23 key indicators of business friendliness toward Hispanic entrepreneurs. Our data set of 23 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="https://ift.tt/2qZGM1H>

 

Best Cities for Hispanic Entrepreneurs

Overall Rank (1=Best)	City	Total Score	‘Hispanic Business-Friendliness’ Rank	‘Hispanic Purchasing Power’ Rank
1	Laredo, TX	61.72	1	10
2	South Burlington, VT	61.10	10	1
3	Charleston, WV	57.40	32	3
4	Corpus Christi, TX	57.29	7	12
5	Oklahoma City, OK	55.56	6	38
6	Pembroke Pines, FL	54.93	13	16
7	Amarillo, TX	54.70	9	26
8	San Antonio, TX	54.59	12	18
9	Bismarck, ND	54.52	87	2
10	Casper, WY	53.92	14	22
11	Miami, FL	53.68	2	101
12	Tulsa, OK	53.59	5	79
13	Grand Prairie, TX	53.10	40	6
14	Sioux Falls, SD	52.98	15	31
15	Cheyenne, WY	52.89	8	56
16	Tampa, FL	52.84	3	110
17	Irving, TX	52.78	30	11
18	Fort Worth, TX	52.53	27	19
19	El Paso, TX	52.25	18	39
20	Austin, TX	52.19	33	17
21	Orlando, FL	52.19	11	51
22	Hialeah, FL	52.01	4	120
23	Juneau, AK	51.91	61	9
24	Overland Park, KS	51.77	59	7
25	Plano, TX	51.71	46	14
26	Huntington, WV	51.65	77	8
27	Gilbert, AZ	51.58	106	4
28	West Valley City, UT	51.54	25	35
29	Houston, TX	51.23	19	49
30	Boise, ID	51.21	34	21
31	Dallas, TX	50.89	22	48
32	Denver, CO	50.64	23	52
33	Lewiston, ME	50.40	91	5
34	Scottsdale, AZ	50.22	43	30
35	Rapid City, SD	50.19	35	37
36	Irvine, CA	50.15	56	20
37	Brownsville, TX	50.13	17	75
38	Springfield, MO	50.00	21	66
39	St. Petersburg, FL	49.84	65	13
40	Columbia, MD	49.70	68	15
41	Fort Lauderdale, FL	49.45	16	89
42	Jacksonville, FL	49.37	42	43
43	Salt Lake City, UT	48.99	20	88
44	Cape Coral, FL	48.62	51	45
45	Peoria, AZ	48.36	74	24
46	Arlington, TX	48.35	29	81
47	Henderson, NV	48.19	60	36
48	Chesapeake, VA	48.16	66	29
49	Atlanta, GA	48.12	28	87
50	Aurora, CO	48.08	54	46
51	Portland, ME	47.77	52	54
52	Mesa, AZ	47.75	41	72
53	Lubbock, TX	47.70	53	50
54	Nashville, TN	47.47	73	33
55	Billings, MT	47.31	26	105
56	Raleigh, NC	47.15	100	23
57	Tempe, AZ	47.12	93	27
58	Colorado Springs, CO	46.91	55	61
59	Fargo, ND	46.66	62	58
60	Port St. Lucie, FL	46.63	36	97
61	New Orleans, LA	46.29	38	106
62	Nampa, ID	46.16	85	44
63	Garland, TX	46.15	72	55
64	Chandler, AZ	46.08	95	40
65	Santa Ana, CA	45.99	49	95
66	Durham, NC	45.79	116	32
67	Fremont, CA	45.76	123	34
68	Kansas City, MO	45.68	64	73
69	St. Louis, MO	45.65	48	108
70	Gulfport, MS	45.56	45	111
71	Albuquerque, NM	45.33	57	92
72	Baton Rouge, LA	45.29	39	121
73	Anchorage, AK	45.09	99	53
74	Ontario, CA	44.91	80	71
75	Bakersfield, CA	44.66	63	94
76	Phoenix, AZ	44.59	92	63
77	Virginia Beach, VA	44.58	71	85
78	Lincoln, NE	44.57	89	68
79	Shreveport, LA	44.44	44	134
80	Burlington, VT	44.16	50	122
81	Las Vegas, NV	44.11	70	98
82	Las Cruces, NM	43.86	47	137
83	Columbus, OH	43.61	128	57
84	Charlotte, NC	43.60	103	78
85	Chattanooga, TN	43.57	112	74
86	Fort Wayne, IN	43.51	126	64
87	Cincinnati, OH	43.49	117	69
88	Washington, DC	43.31	151	41
89	Cedar Rapids, IA	43.24	118	77
90	Charleston, SC	43.18	110	83
91	Wichita, KS	43.01	83	107
92	Fontana, CA	42.94	152	42
93	Huntington Beach, CA	42.94	96	96
94	Riverside, CA	42.91	81	109
95	Santa Clarita, CA	42.78	94	102
96	Portland, OR	42.71	82	112
97	Glendale, AZ	42.66	121	84
98	Pittsburgh, PA	42.66	170	25
99	Reno, NV	42.66	107	93
100	Oxnard, CA	42.47	125	86
101	Greensboro, NC	42.47	114	90
102	Lexington-Fayette, KY	42.41	136	76
103	Omaha, NE	42.40	104	103
104	Aurora, IL	42.32	115	91
105	Anaheim, CA	42.08	58	146
106	Fort Smith, AR	41.99	142	65
107	Tucson, AZ	41.98	37	160
108	Little Rock, AR	41.93	122	100
109	Rancho Cucamonga, CA	41.83	144	67
110	San Francisco, CA	41.80	79	132
111	Moreno Valley, CA	41.59	142	80
112	Indianapolis, IN	41.56	130	99
113	North Las Vegas, NV	41.53	163	47
114	Warwick, RI	41.41	175	28
115	Mobile, AL	41.38	84	133
116	Seattle, WA	41.13	155	62
117	Richmond, VA	40.96	124	114
118	Baltimore, MD	40.94	148	82
119	Knoxville, TN	40.87	139	104
120	Tallahassee, FL	40.77	101	135
121	Honolulu, HI	40.74	105	130
122	Grand Rapids, MI	40.56	67	150
123	Birmingham, AL	40.54	75	149
124	Nashua, NH	40.49	157	70
125	Huntsville, AL	40.36	88	144
126	Oceanside, CA	40.30	119	129
127	Des Moines, IA	40.30	167	59
128	San Jose, CA	40.23	131	119
129	Jackson, MS	40.19	24	175
130	Louisville, KY	40.14	129	124
131	Newport News, VA	39.90	113	139
132	Chula Vista, CA	39.87	108	143
133	San Diego, CA	39.69	86	155
134	Santa Rosa, CA	39.59	137	128
135	Missoula, MT	39.51	31	172
136	Norfolk, VA	39.47	120	141
137	Fayetteville, NC	39.46	97	148
138	Chicago, IL	38.90	111	153
139	Columbus, GA	38.90	133	140
140	Toledo, OH	38.80	78	163
141	Columbia, SC	38.76	146	127
142	Los Angeles, CA	38.74	76	164
143	Madison, WI	38.66	90	158
144	Sacramento, CA	38.57	138	142
145	Pearl City, HI	38.56	127	147
146	Memphis, TN	38.45	153	118
147	Dover, DE	38.17	177	60
148	Stockton, CA	37.76	135	154
149	San Bernardino, CA	37.75	149	138
150	Long Beach, CA	37.63	102	165
151	Fresno, CA	37.43	134	157
152	Modesto, CA	37.39	160	123
153	Tacoma, WA	37.29	162	125
154	Minneapolis, MN	37.19	171	113
155	Winston-Salem, NC	37.14	109	166
156	Montgomery, AL	36.91	141	156
157	Yonkers, NY	36.57	150	152
158	Garden Grove, CA	36.45	166	136
159	Salem, OR	36.39	173	116
160	Spokane, WA	36.28	174	117
161	Oakland, CA	36.21	169	131
162	Manchester, NH	36.07	132	168
163	Milwaukee, WI	35.62	165	145
164	Akron, OH	35.60	176	126
165	Augusta, GA	35.45	147	159
166	New York, NY	35.38	69	182
167	Glendale, CA	35.20	164	151
168	Boston, MA	34.75	98	179
169	St. Paul, MN	34.72	154	162
170	Vancouver, WA	34.64	179	115
171	Philadelphia, PA	33.68	161	167
172	Detroit, MI	32.91	158	170
173	Jersey City, NJ	32.89	172	161
174	Rochester, NY	32.82	140	176
175	Worcester, MA	32.40	145	177
176	Newark, NJ	30.60	156	181
177	Buffalo, NY	30.56	168	174
178	Wilmington, DE	30.25	159	180
179	Cleveland, OH	30.18	178	169
180	Bridgeport, CT	28.61	180	171
181	Providence, RI	27.32	182	173
182	New Haven, CT	27.19	181	178

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?

< >

• Pradip K. Shukla Associate Professor of Management in the Argyros School of Business and Economics at Chapman University
• Ana Valdez Executive Director of the Latino Donor Collaborative, Inc
• Peter Cohan Lecturer of Strategy at Babson College
• Deborah L. Stroman Clinical Associate Professor of Health Behavior and Sport Business Entrepreneur in the Gillings School of Global Public Health at the University of North Carolina at Chapel Hill
• Frank Hoy Paul R. Beswick Professor of Innovation & Entrepreneurship at Worcester Polytechnic Institute

Pradip K. Shukla Associate Professor of Management in the Argyros School of Business and Economics at Chapman University

What are the biggest challenges faced by Hispanic entrepreneurs?

The biggest challenges faced by Hispanic entrepreneurs are similar to those faced by all entrepreneurs: intense competition, funding startup costs, and time demands required for startups and ongoing ventures. Some Hispanic entrepreneurs lack both knowledge about startup regulatory procedures and don't personally know anyone to mentor them.

Should government authorities create programs or other incentives to specifically encourage Hispanic entrepreneurs? If so, what types of programs or incentives?

Most economists agree that recessions are ended first by new jobs created by small business startups and are then followed by hiring increases at larger firms. It is in the best interest of the economy that government authorities create programs and other incentives to specifically encourage Hispanic entrepreneurs just as programs/incentives exist to encourage female entrepreneurship. The best programs would be focused on local area resource consolidation such as SBDCs (Small Business Development Centers) at local community colleges and One Stop Startup Resource centers to assist with regulatory forms. For those who require assistance, bilingual services should be considered.

What tips do you have for Hispanic entrepreneurs interested in starting their own business?

Gain work experience in the industry that you plan to start your own business, so that you get a more realistic preview of the industry demands. Seek out mentors who can guide you and who can serve as advisors. Use free resources such as SBA services, SCORE chapter workshops and consulting, and resources in the business schools at local colleges and universities. Join groups such as local chambers of commerce, Hispanic chambers of commerce, and network.

In evaluating the best cities for Hispanic entrepreneurs what are the top 5 indicators?

• Overall growth of the city in population and local economy growth;
• Good labor pool with skills required of your employees;
• Close proximity to good colleges and universities;
• Avoid cities with high housing costs where less discretionary funds are left for purchases after rent or home loan payments;
• Good transportation systems.

Many larger cities have Hispanic Chambers of Commerce.

Ana Valdez Executive Director of the Latino Donor Collaborative, Inc

What are the biggest challenges faced by Hispanic entrepreneurs?

Latino-owned companies are increasing in number at a rapid rate, the fastest rate of any other demographic in America. However, Latino entrepreneurs face a funding ceiling. The key challenging issue is that national banks provide less loan funding to Latino-owned businesses, relative to other demographic groups. Latino-owned businesses have the lowest rate of business loans from financial institutions among all other firms. Only 12 percent of Latino businesses can access bank loans, compared to 18.4 percent for white-, 15.3 percent for Asian-, and 14.2 percent for black-owned firms. Latino firms also have the lowest number of government-backed loans, although Latino business owners say they would like to have them.

Should government authorities create programs or other incentives to specifically encourage Hispanic entrepreneurs? If so, what types of programs or incentives?

Yes, there is a need/opportunity for more financial education initiatives targeting the Latino community, more structured efforts from the banks to attract Latinos as clients and make the community feel more comfortable working with the banking industry.

What tips do you have for Hispanic entrepreneurs interested in starting their own business?

• Do your numbers: know the market size and the competitors, project your sales;
• Build your business on the bases of integrity every step of the way: from punctuality to transparency and accountability;
• Dare to ask for money: private funding, banks, government entities;
• Keep informed: new products, new methods, new competitors;
• Engage with business allies, with business organizations, with business private groups;
• Ignore the naysayers, use your uniqueness to innovate.

In evaluating the best cities for Hispanic entrepreneurs what are the top 5 indicators?

Calculated by funding-friendly index using frequency and funding source counts, the top five funding-friendly states for Latino businesses are Florida, California, Nevada, Texas and New York.

The current gap between the powerful and constant growth of Latino businesses in America and the lack of funding available is a tremendous growth opportunity for banks and other funders, for Latino owners, and for the American economic growth overall. Furthermore, the growth achieved by Latino-owned businesses has happened without access to Chambers of Commerce, trade associations, non-profit support, the use of governmental business development established systems, etc. This opportunity gap should help venture capitalists, banks, and other commercial institutions, and nonprofits to engage deeper with the Latino entrepreneur, and should also help policymakers in all fields to empower Latino entrepreneurs for job creation, economic equality, underserved communities support anti-poverty programs, and the like.

The lack of such initiatives and programs would result in "money being left on the table." The importance of the Latino entrepreneur for the growth of this country is pure math.

Peter Cohan Lecturer of Strategy at Babson College

What are the biggest challenges faced by Hispanic entrepreneurs?

The answer depends on many factors -- including whether the entrepreneurs have immigrated to a country like the U.S. where English is the official language, or whether they were born in the U.S., speak English well and know the American culture. The biggest challenges facing Hispanic entrepreneurs who have immigrated to the U.S. include the barrier of communicating with English-speaking government officials, customers and investors; potentially limited understanding of local laws; challenges developing an effective business plan and limited ability to raise capital from traditional sources due to a limited credit history; and challenges selling to English-speaking customers. By contract, Hispanic entrepreneurs who are fluent in English and know U.S. culture face the same challenges that face all startup CEOs. They must find customer pain, develop a better solution to that problem, build a prototype, get customers, raise capital, and win an ever-growing collection of customers.

Should government authorities create programs or other incentives to specifically encourage Hispanic entrepreneurs? If so, what types of programs or incentives?

I think the government should encourage non-English speaking entrepreneurs to learn English, make them aware of the relevant laws for starting and operating a company and giving them advice on where to find financing. And government should offer programs that teach skills like how to find a good business idea, how to develop a great product and build a prototype, how to listen to potential customers to get their feedback on the prototype; how to develop a business plan; how to find the investors for the different stages of a company's growth; how to find and partner with suppliers; and how to build a sales force to expand the business.

What tips do you have for Hispanic entrepreneurs interested in starting their own business?

My tips are to learn English if you don't know it already, and then to do all the things I mentioned above for the government program -- how to find a good business idea and so on.

In evaluating the best cities for Hispanic entrepreneurs what are the top 5 indicators?

I addressed these indicators in my 13th book, “Startup Cities,” which was published in February. The key things to look for are whether there are pillar companies (publicly-traded companies based in the city that support startups); universities and accelerators; a deep supply of human capital; investment capital at all stages of a company's growth; mentor networks; and startup-friendly values.

Deborah L. Stroman Clinical Associate Professor of Health Behavior and Sport Business Entrepreneur in the Gillings School of Global Public Health at the University of North Carolina at Chapel Hill

What are the biggest challenges faced by Hispanic entrepreneurs?

Latino and Black entrepreneurs face similar challenges in the blending of two important business requirements -- funding and culture. Identifying financial resources will help founders create and sustain product or service entry into the market. However, if the community and business culture is toxic, they will be unable to find and retain quality people to join the team and run the company. People are the most important asset to a company. With our nation's ongoing challenge with institutional racism, it is no surprise that most successful Hispanic companies are located in cities with a higher percentage of Hispanics. For people of color, one can't underestimate the importance of being with and servicing one's own community for long-term success.

Should government authorities create programs or other incentives to specifically encourage Hispanic entrepreneurs? If so, what types of programs or incentives?

Survival is the best source of creativity. Most successful entrepreneurs are seeking to improve a condition -- often, their very own. This source of uncomfortableness or pain point spurns the imagination to create a better way. There are no new ideas, but there are millions of ways to do things better, to provide more options, and to be more inclusive. Latinos offer a perspective that all Americans should value, appreciate, and be willing to pay for in a business venture.

What tips do you have for Hispanic entrepreneurs interested in starting their own business?

Thriving Hispanic entrepreneurs value education. According to a Stanford (2016) study, more than two-thirds of Hispanic scaled firms have college degrees. That is, business owners not only learn in the classroom, but they are doers and are connected. Entrepreneurs must be "pracademics" by simultaneously gaining book knowledge and working in the community. In effect, they are doers by practicing their learned skills in advance to be equipped at launch time.

In evaluating the best cities for Hispanic entrepreneurs what are the top 5 indicators?

Top five indicators:

• Access to capital -- a thriving and resourced city economically, business growth;
• Culture -- share of Latino/Hispanic population;
• Transportation -- multiple modes of efficient transport (bus, rail, airport, bikeways, etc.);
• Education -- vibrant academic community and educated population;
• Technology -- access to high-speed broadband.

Frank Hoy Paul R. Beswick Professor of Innovation & Entrepreneurship at Worcester Polytechnic Institute

What are the biggest challenges faced by Hispanic entrepreneurs?

Money and language. For Hispanic/Latino (you probably also know that some who refer to themselves as Latino or Chicano or some other label reject the term Hispanic, even though there is a national Hispanic Chamber of Commerce) entrepreneurs with low socioeconomic status, capital for starting and growing ventures is limited, and they may not have access to networks that can channel funds to their ideas. Low income is typically associated with low levels of education, compounding the problem of obtaining capital. And discrimination against Hispanics, especially immigrants, is very real in parts of the country. Many immigrants and residents with limited education, inability to communicate effectively in English restricts access to customers, suppliers, sources of finance, and others. On the other hand, facility with Spanish can be a positive in some markets.

Should government authorities create programs or other incentives to specifically encourage Hispanic entrepreneurs? If so, what types of programs or incentives?

Government programs that provide access to capital and to business training/education can be extremely valuable. The U.S. Small Business Administration and its partner Small Business Development Centers are important services in both categories. Government personnel who are fluent in Spanish are critical. Government agencies can work collaboratively with private sector organizations, such as Hispanic Chambers of Commerce and microlenders, e.g., Accion.

What tips do you have for Hispanic entrepreneurs interested in starting their own business?

• Focus initially on Hispanic markets, particularly those that match the national origin of the entrepreneur;
• Join the Hispanic Chamber and other such organizations where members help each other succeed;
• Show up at business events that are not restricted to Hispanic members (industry associations, Rotary Clubs, charitable organizations, etc.) -- networking can prove invaluable;
• Strategic alliances are key for small businesses today -- can the entrepreneur build a relationship with customers, suppliers and others that is more than a normal business transaction?

In evaluating the best cities for Hispanic entrepreneurs what are the top 5 indicators?

• Core populations of residents with national origins that match the entrepreneur;
• Ports that provide easy importation of products from country of origin for first- or second-generation residents, who may have strong contacts in a country of origin that may be able to provide products for the U.S. market;
• Public and private organizations partnering to assist new venture creation;
• Proactive capital access;
• Business-oriented local regulation.

Methodology

In order to determine the best cities for Hispanic entrepreneurs, WalletHub compared 182 cities — including the 150 most populated U.S. cities, plus at least two of the most populated cities in each state — across two key dimensions, “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 23 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 determined each city’s based on its weighted average across all metrics to calculate its total score and used the resulting scores to rank-order our sample.

Hispanic Business-Friendliness – Total Points: 60

• Share of Hispanic-Owned Businesses: Double Weight (~8.00 Points)
• Hispanic Entrepreneurship Rate: Double Weight (~8.00 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 (~4.00 Points)
• Presence of Hispanic Chamber of Commerce: Full Weight (~4.00 Points)
• Small Business-Friendliness Score*: Full Weight (~4.00 Points)
• Entrepreneurial Activity Index*: Full Weight (~4.00 Points)
• Industry Variety: Full Weight (~4.00 Points)
• 5-Year Business Survival Rate*: Full Weight (~4.00 Points)
• Significant Startups per Capita: Full Weight (~4.00 Points)Note: This metric measures the number of 4- to 15-years old startups with at least five employees adjusted to population.
• Small-Business Loans per Total Number of Small Businesses: Full Weight (~4.00 Points)
• Average Monthly Rent for Office Space: Full Weight (~4.00 Points)
• Corporate Tax Rank*: Full Weight (~4.00 Points)
• Average Length of Workday (in Hours): Full Weight (~4.00 Points)

Hispanic Purchasing Power – Total Points: 40

• Affordability: Double Weight (~6.96 Points)Note: This metric was calculated as follows: Median Annual Income of Hispanics / Cost of Living.
• Income Growth for Hispanics: Full Weight (~3.48 Points)
• Housing Affordability for Hispanics: Full Weight (~3.48 Points)Note: This metric was calculated as follows: Median Annual Income of Hispanics / Median House Price.
• Hispanic Unemployment Rate: Double Weight (~6.96 Points)
• Hispanic Job Security: Full Weight (~3.48 Points)Notes: (Number of Hispanic Employees in 2016 - Number of Hispanic Employees in 2015) / Number of Hispanic Employees in 2015
• Share of Hispanic Residents: Full Weight (~3.48 Points)
• Hispanic Population Growth: Full Weight (~3.48 Points)
• Share of Hispanics with at Least a Bachelor’s Degree: Full Weight (~3.48 Points)
• Hispanic Housing Tenure: Half Weight (~1.74 Points)Note: This metric measures the Hispanic renter-to-owner ratio.
• City Growth: Full Weight (~3.48 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, EC Hispanic Media, Thumbtack and WalletHub research.

from Wallet HubWallet Hub


via Finance Xpress