We are one of five million Hispanic-owned businesses in America, which is one reason why each Hispanic Heritage Month, at Hello Alice, we proudly gather stories from Hispanic small business owners to celebrate this community and gauge its needs. This year, more than anything else, I was struck by how Hispanic entrepreneurs are intensely proud of their culture and often operate businesses that honor their heritage.
Business owners routinely tell us their number one challenge is access to capital, whether the economy is good or bad, and that remains true. Hispanic owners ranked access to capital and growing their businesses as their two most significant challenges.
But as we drill down, inflation is a clear driver of this need. Eighty-nine percent of Hispanic owners told us inflation has affected their business -; four percentage points higher than among non-Hispanic owners -; and nearly three-quarters said inflation has worsened over the past six months. Already starved for capital, the economy is squeezing Hispanic owners, 43% of whom told us they are having trouble either obtaining raw materials or inventory in the current economy.
“Right now, our biggest challenge is surviving through the inflation currently going on in the world,” said Clarivel Castellanos, founder of Créme de la Crêpe in Marietta, GA. “It makes it impossible to save any money when the costs of food and labor are at an all-time high.”
Increased financial literacy and education stood out as an opportunity for relief. According to our survey, 86 percent of Hispanic owners said their primary difficulty in accessing capital is finding funding opportunities, and 43 percent of Hispanic owners are searching for ways to build credit.
Despite some challenges, Hispanic owners remain overwhelmingly optimistic. In fact, a resounding 81 percent said they’re confident their business will grow in 2023, consistent with the overall small business community. However, when we asked what factors will determine their success, Hispanic owners disproportionately cited two challenges: acquiring new customers and hiring a team.
“I’ve tried numerous times to hire individuals to help me with tasks that take me away from my primary work, and I haven’t been successful in finding someone who is motivated and reliable,” said Jacqueline Hernandez of Revelation Counseling Services in San Antonio.
Outside hiring, Hispanic owners identified paid advertising and social media as two growth areas to help them achieve their customer acquisition goals. Notably, this marketing focus outpaces other demographics of owners and signals an acceleration of existing trends. Forty-two percent of Hispanic owners told us they already spend more than a quarter of their marketing budget on digital marketing platforms like Instagram or TikTok, compared to just 30 percent of non-Hispanic owners.
“Over the last six years, we’ve grown our business organically by word of mouth and through social media,” said Lily Orozco, founder of Little Postage House in Knoxville. “We think that we can scale our business and continue to grow through strategic marketing and paid advertising, but we don’t really know how to approach that or where to start.”
Small business owners rarely have enough hours in the day, especially given hiring troubles. In fact, our survey found that many owners, regardless of demographic, are searching for software solutions to increase productivity and maximize resources. About half (48 percent) of all Hello Alice business owners said they are always on the lookout for the latest technology solutions for their business, and another 48 percent said they are open to new technology solutions if they significantly improved processes.
These tools are just a start, yes, but I’m confident that with support from us all, the scrappy, inspirational Hispanic small business community can grow and thrive for years to come.
This content was originally published here.
