Latine-Owned Businesses Are Outpacing the Market. Here's What the Market Should Learn.
The fastest-growing segment of American small business isn't waiting for permission, and it isn't waiting for a fair shot at the money it's earned, either.
We ranked these numbers by what they cost to ignore. Between 2018 and 2023, the count of Latino-owned businesses in the U.S. climbed 44%, to 465,202 firms, while White-owned business counts slipped. Revenue for those firms rose 36% over the same stretch. By 2023 and 2024, Latino-owned businesses were turning a profit at higher rates than White-owned businesses, after a pandemic dip that took profitability down to 43% in 2021 and back up to 84% by 2024.
Nationally, Hispanic-owned employer firms now number over 406,000, generating $572.9 billion a year — 7.1% of all U.S. employer firms producing 3.3% of all employer-firm revenue. Sit with that gap for a second. It is not a talent gap. It is not a work-ethic gap. Stanford's Latino Entrepreneurship Initiative puts a number on it directly. If Latino-owned businesses earned the same average revenue as White-owned businesses, it would add $1.1 trillion to the U.S. economy. Being counted, it turns out, was never the hard part.
Being Funded Is a Different Story
Here is where the sarcasm belongs, and it belongs squarely with the institutions, not the owners standing in their lobby. In that same Stanford survey, only 21% of Latino entrepreneurs who applied for financing got the full amount they asked for, compared with 40% of White entrepreneurs. When the answer was no, only 51% of Latino owners got an explanation for the denial — compared to 87% of White owners. One group is growing revenue faster than the market and still being asked to accept a rejection with no reason attached. That is not risk management. That is a system that has decided some applicants don't merit an explanation, and it will keep deciding that until owners force a paper trail it can't wave away.
Procurement runs the same pattern in a quieter room. Public agencies set participation goals for minority- and women-owned contractors, and those goals exist precisely because the market doesn't reach this equilibrium on its own — a certified, capable Latine-owned firm can still lose a bid to an uncertified competitor simply because nobody made the case for the set-aside, or because the paperwork sat unfinished when the solicitation closed. Certification is not a favor. It's a key that has to be cut before the lock changes.
Three Moves for Latine Owners in Washington
Get certified before you need it, not after. Washington's Office of Minority and Women's Business Enterprises (OMWBE) certifies businesses that are at least 51% owned and controlled by a person who qualifies as socially and economically disadvantaged, under a personal net worth cap of roughly $2.05 million (your primary residence and the business itself don't count against that). Certification opens doors to state and local set-aside contracts that never show up in a general bid search — but the review takes time, and agencies don't backdate eligibility to when you needed the contract.
Show up for the bids, not just the certification. The Washington APEX Accelerator (formerly the state PTAC) gives certified and uncertified firms alike free, one-on-one help finding and preparing government bids — reading solicitations, assembling capability statements, understanding a contracting officer's actual criteria. A certification without a bid pipeline behind it is a plaque on the wall.
Build the banking relationship before the emergency, not during it. The state's Small Business Credit Initiative moves capital through CDFIs and community lenders specifically to reach businesses the traditional banking system underserves, with revenue-based financing and owner-occupied commercial real estate loans built for very small and disadvantaged businesses. A CDFI that has watched your books for eighteen months lends differently than a stranger meeting you for the first time on the day you're desperate. Start that relationship now, while you don't need the money — because that's exactly when a lender can see you clearly.
Three Moves for Customers Who Mean It
Buy repeatedly, not once. A single purchase around Hispanic Heritage Month photographs well and changes nothing about a firm's revenue trajectory. A repeat customer is the only kind of support that shows up in next year's numbers.
Refer the business you liked, by name, to someone who will actually go. Word of mouth is procurement for people who don't have a procurement department — use it like the tool it is.
If your organization buys anything, ask who your vendors are. Every business, nonprofit, and agency has a supplier list. Very few have looked at it and asked whether it reflects the market they claim to serve. That question, asked out loud in a budget meeting, moves more money than a hashtag ever will.
The Bottom Line
None of this is a charity case, and treating it like one is part of what keeps the gap open. Latino-owned businesses are already outperforming in growth. The institutions around them — lenders, procurement offices, and yes, customers — are the variable still lagging the data. Closing that gap isn't generosity. It's just catching the market up to what's already true. Before the next solicitation closes, not after, talk to King's Dream about certification, financing, or your first government contract.
Sources:
The Local Mogul is King's Dream Business Consulting's blog, covering the people and small businesses building our local economies.
Comments