By now, many marketers have heard of the tremendous opportunities the United States. Hispanic consumer represents in terms of numbers and purchasing power. However, in the age of hypersegmentation and targeting, Millennials and bi-cultural Hispanics have risen to the top of marketer’s go-to Hispanic sub-segments. While most companies focus on this target, there is an untapped consumer segment that has serious growth potential, Hispanic business owners.

Many consumer marketers dismiss this segment as a B2B target. What they fail to remember, however, is that there are people behind businesses; business owners are people too, making them a unique B2C marketing opportunity.

Per a recent study by the Stanford Latino Entrepreneurship Initiative (SLEI); Latino firms continue to be created at faster rates than the national average. While new business creation slowed through the recession overall, Latinos continued to create firms at similarly high rates as before. The 2012 Census counted 3.3 million Latino firms, making up 12% of all U.S. firms. When you factor in Hispanic firms owned by two or more Latinos and family owned and operated businesses, that translates into almost 1 in 10 U.S. Hispanics being business owners.

Coupled with another statistic from the SLEI study, Latino firms are located all over the United States, with 75% in majority non-Latino neighborhoods serving mostly non-Latino customers, the halo effect of targeting Hispanic business owners is tremendous and has implications for potentially reaching non-Hispanics.

The opportunity for marketers is clear; targeting Hispanics via a Hispanic business owner perspective is a unique way to connect with a segment that almost every brand and company wants to reach. The Hispanic mother, the Hispanic family, and Hispanic food are cultural connections that have been used often by advertisers, the Hispanic business owner is one that is not often highlighted and helps marketers cut through the traditional Hispanic tropes we see.

In the past few years, Honda and Acura have positively showcased U.S. Hispanic business owners and entrepreneurs. In 2012, an ad called “Father and Son” utilized that relationship and a Hispanic-owned architecture firm for the launch of the Honda Accord redesign. And in 2015, Acura’s RDX was supported with an ad called “Cervantes”, depicting a humble and successful young businessman who never forgot where he came from. According to Luiz Salles, head of strategy at Orci, the agency behind the creative, “We wanted to show that Latinos play an important role in the business environment in the United States. A role beyond stereotypical Hispanic-heavy occupations. They are also, increasingly, professionals, business owners, and entrepreneurs. There are more than 4 million Hispanic-owned businesses in America with revenues of over $660 billion. In fact, Hispanic entrepreneurs have been starting businesses at a pace 15 times the national average over the last decade. That’s an astonishing contribution to our economy that deserves recognition — and we’re proud that Honda and Acura have done just that, recognized them.”

The Hispanic business creation rate is unique in the United States because the five-year average growth rate in the number of Latino firms has remained at double or triple that of the national average for the past fifteen years, per the SLEI report. This trend isn’t slowing down anytime soon. Targeting Hispanic business owners can not only position your brand uniquely in the minds of this growing entrepreneurial pool of consumers, it can also reach the diverse customer base that Hispanic business owners cater to, making the ROI of your Hispanic advertising dollars go far beyond Hispanic consumers.

Mario Carrasco is a partner at ThinkNow Research

Lack of transition plans present challenges for the next generation of Latino business owners

For Latino owned-businesses, family and community are key, however the future survivability of their business may be questionable. According to a new study by Massachusetts Mutual Life Insurance Company (MassMutual), research from the 2015 MassMutual Business Owner Perspectives Study revealed that 80 percent of Latino respondents expect to pass their businesses on to a family member – most often a child. However, 37 percent of those individuals said their chosen successor may not even know about this succession plan.

For Latino business owners, the aspiration to live the American Dream is no different, but the definition of success may be broader, encompassing their ability to care for and support extended families, friends, and their communities. The study reported they feel a strong sense of responsibility to their families and communities but tend to lack financial confidence and knowledge to put plans in place to ensure they can continue to provide for them.

“Latino entrepreneurs are strongly interconnected with their businesses, community and families,” said Dr. Chris Mendoza, Latino Markets Director, MassMutual. “Without the proper financial knowledge and preparation, Latino business owners are inhibited from fully realizing and protecting their dreams.”

Latino-owned businesses are growing at double the national rate, according to the U.S. Census. And more so than the general average, Latino entrepreneurs are generally younger and more likely to take community into account when making business decisions. Additionally, the majority of those surveyed started their businesses to pursue the American Dream, take control of their lives, and support their families. Yet many do not have the necessary knowledge and resources in place to gain that control and secure a healthy financial future for their families.

When it comes to taking action to address essential business planning issues, Latino business owners face many challenges in achieving their version of the American Dream.

Protecting against the Unforeseen

• Only half of the Latino business owners surveyed have a formalized plan in place (a buy-sell agreement) to protect themselves for an untimely death; even fewer have a buy-sell agreement in place for disability.
• Protecting the business (35 percent) and family (37 percent) are the primary motivators for having these plans in place, yet an unforeseen illness or injury could jeopardize their ability to meet that goal.

Planning for the Next Generation of your Business

• While Latino business owners are ahead of their general population peers, when it comes to succession planning (49 percent of Latinos vs. 41 percent of the general population have a succession plan), only about half of the Latino business owners surveyed have any type of succession plan in place.
• Eighty percent said they will pass the business on to a family member – most often a child. However, 37 percent of those individuals said their chosen successor may not even know he/she is the successor (significantly higher than 23 percent of the general population).

Retirement

• Forty percent don’t have any retirement savings plan outside of their businesses and either plan to continue receiving income from the business post-retirement or will use the proceeds from the sale of the business to fund their retirement.
• Latino business owners are significantly more likely than the general population to say they plan to retire but haven’t given it much thought, and few (only 12 percent) say they plan to retire in the next five years, driven by the younger average age of Latino business owners.
• They are more likely to leave the business to a family member or relative (80 percent vs. 65 percent of the general population) and much less likely to sell the business to a key employee (9 percent vs. 14 percent of the general population).

The study was conducted by MassMutual to better understand how to help prepare U. S. Latino businesses to not only sustain future generations but the American economy as a whole. The results of the study are designed to help Latino business owners, as well as their family members, engage in a meaningful dialogue about how to best position their businesses for long-term success and stability.

While it may not be the most Latino-populated city region in the U.S., Baltimore can be considered a city that offers Hispanics some of the best job opportunities, and has been described as “paradise” for people who do not have legal status yet.

The city has become attractive for Latinos because it is home to large employers such as the Social Security Administration, Medicare and Medicaid Services, the University of Maryland, and McCormick and Company, Inc., among others.

“Latinos are definitely in construction and landscaping, but in Baltimore, we also have the Social Security Administration headquarters and the Medicaid headquarters,” says Erick Oribio, president of Baltimore Hispanic Chamber of Commerce and founder of the bilingual publication Latin Opinion Baltimore News. “You have to be a citizen to apply to those jobs, but they have a lot of bilingual positions, and they are doing outreach to Puerto Rico.”

Several local and national government agencies, including Baltimore’s police, the Social Security Administration and Medicaid hold job fairs in Puerto Rico,

Known as “The City That Reads,” Baltimore is the largest city in Maryland, and the 26th-most populous city in the nation. According to the Census, Latinos represent 4.6 percent of Baltimore’s population, increasing from 1.7 percent since 2000.

Baltimore’s Hispanic population is composed of a wide mix of national origins, including Mexican, Puerto Rican, Cuban, Dominican, Central American, Honduran, Guatemalan, Colombian, Peruvian, Ecuadorian, Costa Rican, Nicaraguan, Panamanian, and Salvadoran residents.

Statistics show that Salvadorans have become the largest group, but in the last few years, the Mexican and Venezuelan population has increased.

In addition to the amount of work opportunities available for Latinos, Baltimore also offers a great public transportation system and a police station that, “[doesn’t’] ask for immigration papers for legal status,” says Oribio. “The mayor always says that the police department is here to protect all residents in the city.”

He also explains that wealth and homeownership among Latinos is “booming” alongside population growth. Because people move to Baltimore for a number of reasons, including lower costs for doing business, the city has been receiving an influx of Hispanics in search of a good location to found their startups.

“We expect that Latino business growth will continue. The economic situation is not the best, and most businesses are struggling because their sales decreased, but we’re very positive, we have many resources here,” Oribio notes. “We also expect to see working class Latinos with good skills coming to Baltimore to fill positions in different organizations.”

Oribio concluded that today, the American population is “learning about the value of Latino families, and Latinos have more participation in improving the quality of life in the city. We support many good causes as a population, and Hispanic are hard workers with great values. This indicates that we’ll continue to see increases in the next few years.”

Women-owned business growth has been swelling for years. Non-white, multicultural women are the secret force behind overall progress and the introduction of more than $1.5 trillion in revenue to the nation’s economy, according to a new report.

Female-Led Entrepreneurship On the Rise

The National Women’s Business Council published a new report confirming that women of color are taking the reins when it comes to entrepreneurship, based on recently released Census data on American businesses for 2007 through 2012.

Across the nation, there are 9.9 million women-owned businesses, and there has been an increase of 2.1 million women-owned businesses since 2007 (27.5 percent). Today, more than one-third of nonfarm and non-publicly-held businesses are women-owned (36.2 percent), and women-owned businesses have generated $1.6 trillion in receipts.

The top industries for women are health care and social assistance; professional, scientific and technical services; administrative and support and waste management; remediation services and retail trade. A considerable amount of entrepreneurial growth across industries can be attributed to multicultural business growth.

Latinas Mean Business

Entrepreneurship spiked for women of color despite nationwide economic strife during the recession and the ensuing recovery period.

According to fact sheet focusing exclusively Hispanic women-owned businesses, there are 1,475,829 Hispanic women-owned businesses in the U.S. That demonstrates an 87.3 percent increase since 2007, compared to Hispanic men, who saw only 39.3 percent of growth during the same time frame.

Hispanic women-owned firms represented 14.9 percent of all women-owned firms, and Latinas own 44.4 percent of all Hispanic nonfarm and non-publicly-held businesses. Since 2007, these firms saw a 50.3 percent increase in revenue, generating a total of $83.6 billion in receipts.

Most of the Hispanic-owned businesses (95.4 percent) are non-employer firms, earning modest average receipts of $19,537. However, The 4.6 percent of firms, which host 502,008 paid employees, had an annual bankroll of $14 billion and average receipts of $824,301.

The industries with the highest representation of Hispanic-owned businesses are administrative support and waste management, remediation management; health care and social assistance; retail trade; and professional, scientific and technical services. Also, the industries with the lowest representation are management companies and enterprises; mining, quarrying, and oil and gas extraction; utilities; agriculture, forestry, fishing, and hunting; and information.

California, Texas, Florida, New York and Arizona are the states with the highest number of Hispanic-owned firms (366,997; 290,997; 263,163; 137,400 and 41,843 firms, respectively). Additionally, New York (502,008), Arizona (137,814), New Jersey (84,875), Illinois (72,197) and Georgia (35,794) are the top five states where Hispanic women-owned firms employ the greatest number of employees.

The report also showed that the states with the highest number of Hispanic women-owned employer firms by average receipts are Kansas, Connecticut, Alaska, Massachusetts and Indiana.