Boom in Hispanic businesses

Md. outpaces nation in growth, revenue

March 22, 2006|By JON FOGG | JON FOGG,CAPITAL NEWS SERVICE

WASHINGTON// The number of Hispanic-owned businesses in the state jumped more than 37 percent from 1997 to 2002, compared with a 31 percent increase nationally, a 2002 survey of business owners found.

The typical business reported more than $156,000 in sales and receipts, about $15,000 more than the nationwide average.

"The growth is tremendous," said Jorge Restrepo, president of the Montgomery County Hispanic Chamber of Commerce. "What we're seeing in those numbers is a trend over time. From a policy perspective, it means a significant chunk of the profits statewide are coming from Hispanic-owned businesses."

Nationally, the number of Hispanic-owned businesses is growing much faster than the national rate for other companies, fueled by a rapidly expanding Hispanic consumer market. Hispanics owned nearly 1.6 million businesses in 2002, the Census Bureau reported. The total number of U.S. companies grew 10 percent, to about 23 million, during the same period.

"The Hispanic consumer market is exploding," said Michael Barrera, president and chief executive officer of the U.S. Hispanic Chamber of Commerce. "Who knows that consumer market best?"

Hispanic consumers spend about $700 billion a year, and that is expected to climb to $1 trillion by 2010, Barrera said.

In Maryland, the bulk of the growth occurred in many rapidly expanding areas, but the number of Hispanic-owned businesses declined in Calvert, Harford and Howard counties.

Prince George's County, where the number of Hispanic-owned businesses more than doubled, had by far the largest increase in the state. The increase was more than 30 percent in Anne Arundel County, Montgomery County and Baltimore.

The survey found that the 15,353 Hispanic-owned businesses in Maryland reported nearly $2.4 billion in sales and receipts, up from 11,158 businesses and $1.6 billion in sales and receipts in 1997.

Statewide, Hispanics own more than 3 percent of the state's 443,542 businesses.

"We are in a fairly strong economy, and that is something that helps all businesses, whether they are Hispanic-owned or not," Restrepo said.

Most Hispanic-owned businesses were founded in the past five years, he said, indicating that the rapid expansion is likely to continue.

The expansion has been spurred in large part by legislation in favor of entrepreneurship, said Aris Melissaratos, the Maryland secretary of business and economic development.

"There's a trend in this economy of small enterprise, and Hispanics are taking advantage of that," Melissaratos said.

The Census Bureau survey defined a Hispanic-owned business as one in which at least 51 percent of the stock or equity is owned by a Hispanic. Census data from 2004 found that more than 5 percent of Maryland's population was of Hispanic origin, but Hispanics could have listed themselves in other racial categories.

Ronald Langston, director of the Commerce Department's Minority Business Development Agency, said immigration is helping to increase the diversity of the national economy.

He noted that one in 10 U.S. workers is Hispanic, and that is expected to grow to one in four by 2050.

Prince George's County gained the biggest share of Hispanic businesses in the 2002 survey. More than 1,800 new businesses were reported in that county, 120 percent more than in 1997. One-tenth of the county's population is Hispanic, according to the census data.

Montgomery County, where 13 percent of the population is Hispanic, gained more than 1,700 Hispanic-owned businesses.

The county is home to Eureka Facts, a marketing research and analysis business that Restrepo runs in Rockville. The three-year-old business has eight full-time employees and works with several national clients, Restrepo said.

He considers his success typical of Hispanic-owned businesses, he said.

"There is a mix," he said. "We're seeing a lot of shining stars. There are a lot of other businesses out there like mine."

The overwhelming majority of Hispanic-owned businesses were one-person enterprises, the report said, and 13 percent had employees other than the owner.

Although the 1997 survey was inconclusive on what type of business was most common among Hispanic entrepreneurs, the latest study found construction to be prevalent, followed closely by professional, administrative, health care and social services businesses.

The survey also found gains in unexpected areas. In Charles County, where 2 percent of people listed themselves as Hispanic in the 2000 Census, a 50 percent increase in Hispanic-owned businesses was found.

Restrepo and Melissaratos agreed that Maryland Hispanics have a better shot than ever at owning a business.

"If there's a language barrier, they can overcome that," Melissaratos said. "The only barrier is a little cash and a willingness to work hard."

The Associated Press contributed to this article.

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