The Hispanic small business sector is booming, and Millennials play a big role in that growth. According to the Stanford Graduate School of Business's Latino Entrepreneurship Initiative, which in 2018 produced a report about Hispanic business trends, one in four new businesses is Latino-owned, and Latino-owned businesses increased more than 13% between 2014 and 2016.
With the vast majority of the Hispanic population represented by young people—61% of Hispanics in the United States are Millennials, according to the Pew Research Center—it stands to reason that the majority of Hispanic small business owners in the United States are also Millennials.
Find out what inspires Hispanic Millennials to start their businesses and how they fuel growth for their businesses and the community.
Challenges Faced by Hispanic Millennial Small Business Owners
Despite the trends suggested by these statistics, experts note that Hispanic Millennial entrepreneurs face challenges that are unique to their age and cultural demographic groups. The authors of the 2018 Stanford report pointed out that while Hispanic small businesses tend to be headed by younger owners and that their companies tend to be more dynamic as a result of their youth, they also have more difficulty accessing capital, especially in the start-up phase.
In addition, they often lack some of the advantages and resources that have traditionally been more accessible to their non-Hispanic peers, such as family or personal contacts, that can open doors and create opportunities for a small business owner. And a young Hispanic small business owner may face bigger challenges staffing and scaling, both of which may impede the growth of the business.
Challenges Aren't a Chilling Effect
The likelihood of confronting such challenges hasn't had a chilling effect on the small business boom among Latino Millennials, however. A number of factors motivate younger Hispanics to launch their own enterprises, including a history of family entrepreneurship (51% of Latino small business owners say they have at least one older family member who has been a small business owner). That's the case for Stefany Allongo, founder and owner of the wedding planning business, Married in Palm Beach. "I'm the third generation in my family to own my own business," she says, "so I guess you could say it's genetic!"
Allongo also believes that Latino Millennials have an overall high tolerance for risk, which makes them more inclined to launch their own business ventures.
Because they grew up in a period of financial volatility and because automation and digital tools were reshaping the workplace, the job stability typical of previous generations was not afforded to them, she says.
That's a characteristic they share with Millennials from other cultural groups. But in the case of Latino Millennials, there's an added factor: family members who have migrated have survived significant challenges and difficult experiences, and Allongo thinks the lessons and values older Latino generations pass down to the Millennial generation further strengthen Latino Millennial business owners' risk tolerance.
Characteristics of Hispanic Millennial Small Business Owners
Allongo knows this firsthand. When her job at Disney was eliminated in 2009, she decided to take the leap and launch her own business. "Disney couldn't renew my contract due to the recession and most companies were on a hiring freeze," she recalls, "so I took matters into my own hands and launched my business." It was hard to survive the start-up period, she admits, but she wouldn't trade the independence and ownership that having her own business gave her for anything.
As the Hispanic population continues to grow in the United States, the Latino-owned small business boom is unlikely to slow down. "I feel that Latinx Millennials are best poised to open their own businesses," Allongo says, "because most of us have learned hard work and resilience from our parents who have struggled. Those are key attributes for a successful small business owner."