MBN USA

August 24, 2023

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Hispanics are now the largest ethnic group in the Lone Star state

According to the United States Hispanic Chamber of Commerce, Hispanic business enterprises (HBEs) are the fastest-growing segment in the country.

In Texas, those statistics have new meaning. That’s because the latest U.S. Census Bureau figures show that Hispanics are the largest population in the Lone Star State. With that designation comes more influence and opportunities for HBEs.

Here, we catch up with some Hispanic leaders in Texas to discuss the state of HBEs in the supply chain, challenges, opportunities and more.

• Monica Muñoz Andry, president and CEO, Greater Austin Hispanic Chamber of Commerce

• Dr. Laura Murillo, founding president and CEO, Houston Hispanic Chamber

of Commerce

• Rick Ortiz, president and CEO, Greater Dallas Hispanic Chamber of Commerce

What is your outlook for Hispanic-owned business enterprises (HBEs) in the supply chain?

Muñoz Andry: The current economic environment can present some challenges for HBEs. Although the economic outlook remains uncertain, we are seeing more focus on domestic products and nearshoring, which would allow for more business opportunities for HBEs.

There is still potential and opportunity for Latinos in the supply chain. Ensuring that HBEs have firsthand knowledge of opportunities and the small business, minority-owned and local certification to take advantage of these opportunities is important. These certifications can help connect HBEs to the partners and support they need to build infrastructure and put processes in place to complete the contracts.

Murillo: In Houston, Hispanic-owned businesses are powering supply chains, small businesses and the economic prosperity of the region. Study after study demonstrates that Hispanics are starting businesses at the fastest pace of any demographic group, which is an encouraging sign for their participation in the supply chain. We are optimistic about the outlook, but there is always more progress to make. That’s where the work of the chamber comes in and why it is so pivotal!

Ortiz: The outlook is positive because of HBE demographics. The following data is taken from Accion Opportunity Fund, USHCC [United States Hispanic Chamber of Commerce] and Bank of America [Corp.] research.

• HBEs represent the most rapidly

expanding sector among small

businesses in the United States,

experiencing a remarkable 34%

growth over the past decade.

• HBEs contribute significantly to the nation’s economy, generating over $800 billion in annual economic activity.

• Apart from home ownership, business ownership stands as one of the most effective pathways to wealth-building

in America.

• HBEs are optimistic about the coming few years, indicating:

• 81% anticipate an increase in revenues.

• 74% are optimistic about the

improvement of their local economies.

• 64% of respondents have a positive

outlook on the improvement of the

U.S. economy.

• 43% have plans to hire additional

employees.

When working with GDHCC members, we find that their positive outlook mostly tracks with national findings and data points.

What are the major challenges for HBEs, and how is your organization helping them to overcome these

challenges?

Muñoz Andry: Access to capital, growth and scaling continue to be challenges for our HBEs. The chamber continues to be a connector and convener of resources that can help in this arena. We are hosting economic-development programming on a regular basis — including a small business summit — in collaboration with the diversity chambers of Diversity Ethnic Chamber Alliance (DECA). In addition, securing a skilled workforce continues to be a challenge. Connecting workers to the skills that are needed to advance to the next level requires continued work with our university and job-skills development partners. The chamber provides a job board and frequent member networking opportunities for engagement and recruitment.

Murillo: Hispanic-owned businesses face many hurdles. Most significantly, HBEs continue to face challenges with access to capital and accessing other financial resources as compared to their peers. The chamber continues to be at the table with organizations like the Federal Reserve [Board] and the [U.S.] Small Business Administration (SBA), advocating for the removal of these barriers. This [promotion of access to capital and other financial resources] is important work and will continue to be a priority for the chamber, its members and the small business community in the Greater Houston region.

Ortiz:

• Access to capital and credit education

• Need for private-sector and federal

procurement contracts

• Access to technical assistance and

capacity-building

• Digital divide with Latinos

• Job training and workforce development

In our work and representation of GDHCC members, we use a comprehensive approach based on three strategic pillars — advocacy, capacity and access — to help them overcome some of the most pressing challenges. The strategic pillars are designed to empower HBEs to thrive in any economic environment.

• Advocacy – Empowering Growth: Through strategic engagements with influential leaders in both public and private sectors, we drive economic-development initiatives and champion policies that foster a conducive environment for growth. Our biennial Public Policy Agenda (PPA) serves as the road map, guiding our advocacy efforts at the local, state and federal levels.

• Capacity – Building Strong Foundations: We are committed to equipping HBEs and other minority businesses with the essential tools for success through our capacity-building programs and technical assistance services. By imparting crucial business management skills, we pave the way for sustained growth and sustainability of those we serve through our programs. Addressing vital aspects — like access to capital and bridging the digital divide — further fortifies their foundation for prosperity.

• Access – Facilitating Connections: In the world of business, connections matter. We facilitate two-way access, linking HBEs to procurement officials and buyers in both public and private sector entities. This interaction empowers HBEs with a comprehensive understanding of the procurement and contracting processes, while also providing procurement officials access to a pool of contract-ready HBEs — fostering mutually beneficial relationships/networks.

What are the major opportunities for HBEs, and what must they do to take advantage of these opportunities?

Muñoz Andry: A major opportunity for HBEs is the amount of federal funding pushed toward different infrastructure projects. Military, city and state projects make MBE [minority business enterprise] and WBE [women’s business enterprise] certifications more important than ever. By joining their local chambers, HBEs have a centralized fountain of connections and information that they can take advantage of, connecting with and meeting with contractors in addition to maintaining connections with procurement contractors.

Murillo: In Houston, there are many current and future opportunities for HBEs. Hispanics represent the largest demographic group in Harris County. So, in raw numbers alone, the community is having an outsized impact on the economy.

Again, with the rapid and continued growth in the number of Hispanic-owned small businesses and entrepreneurs starting new ventures, HBEs are well-positioned to take advantage of a favorable business climate. What we must continue to advocate for is the inclusion of HBEs in contracting opportunities with large organizations and the public sector. Unless we remove the structural barriers standing in the way, HBEs — and our economy — will be unable to realize the full potential of the opportunity in front of us.

Ortiz: Business is good in Texas at the present and in the near future now that the pandemic has largely subsided. There are many contract opportunities available in the public and private sectors. The Bipartisan Infrastructure Law is investing billions of dollars for projects at the state and local levels. These projects have ripple effects throughout the economy, generating opportunities for those HBEs that are not directly tied to construction.

To capitalize on the available opportunities, HBEs wanting to elevate their capacity can leverage tailored programs offered by organizations like the GDHCC. Our capacity-building initiatives equip businesses with the essential skills and expertise they need to excel. By participating in these programs, they can enhance their competitiveness for securing contracts in the public and private sectors.

Additionally, they must begin to adopt artificial intelligence tools for optimized operational effectiveness and optimization in sales, marketing, accounting and [human resources or] HR, to name a few. With AI-driven strategies, businesses can experience faster growth and improved bottom lines.

Recent U.S. Census Bureau data shows Hispanics are now the largest population in Texas. What does this mean for Hispanic-owned businesses in Texas?

Muñoz Andry: Being the largest population in Texas positions us to increase our representation on local, state and national platforms. We are creating a sizable impact within the state and with that comes influence, which is an exciting moment.

People are paying attention to the Hispanic community. Latinos are growing in representation within our public and private sectors as entrepreneurs, innovators and educators. This growth in leadership and representation will open more doors for future generations.

Murillo: It means two things. First, there is growing opportunity across the state for HBEs. With the Hispanic community now representing a majority of the state’s population, the community will only see their opportunities grow — as long as the business climate is favorable to their participation.

Second, the growing population means that there is now more competition among Hispanic-owned businesses across the state. That’s a challenge, but also an opportunity. Competition breeds innovation, so new and existing HBEs must innovate to continue to grow and succeed in this increasingly competitive environment.

That’s why organizations like the Houston Hispanic Chamber of Commerce are so important. It’s going to take all of us to ensure HBEs are receiving the opportunities they deserve, and we will continue to be the leading advocate for those interests locally, at the state level and across the country.

Ortiz: The increasing Hispanic population in Texas — especially among the younger demographic — suggests a potential growth market for Hispanic-owned businesses. With nearly half of the population under the age of 18 being Hispanic, there is likely to be a greater demand for goods and services that cater to them. This demographic presents a wonderful opportunity for Hispanic-owned businesses to tap into that segment of the market and expand their customer bases.

Moreover, the expanding Hispanic population offers a promising prospect for a more supportive ecosystem for Hispanic-owned businesses. As the community grows, there arises a potential for increased connectivity, guidance and cooperation within the Hispanic business community. This increased connectivity, in turn, can lead to a stronger support system and more resources for Hispanic entrepreneurs to start and grow their businesses.

Additionally, the inherent cultural familiarity and profound understanding of the Hispanic community can provide a distinct edge for Hispanic-owned businesses when it comes to establishing strong connections with their intended audience. These entrepreneurs are better equipped to comprehend the intricate cultural subtleties, preferences and distinctive requirements of their target market, enabling them to customize their offerings more effectively.

To learn more about the Greater Austin Chamber of Commerce, visit gahcc.org.

To learn more about the Greater Dallas Hispanic Chamber of Commerce, visit gdhcc.com.

To learn more about the Houston Hispanic Chamber of Commerce, visit houstonhispanicchamber.com.

To view full article featured in MBN Texas, please click here.