Hispanic & Latinx founders accounted for more than 1 in 10 new business starts in 2023

Key Findings

• Hispanic & Latinx entrepreneurs started 12% of new business in 2023. This continues the trend of Hispanic and Latinx entrepreneurs starting a larger share of businesses since 2019. Among these businesses, 57% were started by men and 43% were started by women.
• Over 1-in-5 Hispanic/Latinx-started businesses were in the community services sector. Twenty-one percent of businesses started by Hispanic and Latinx founders in 2023 were in the Community Services sector, compared to only 15% of all businesses started in 2023.
• Hispanic & Latinx entrepreneurs started their businesses to seek flexibility and long term stability. Nearly 60% – compared to only 40% of all entrepreneurs – say that building an asset is a reason for starting their business.
• Nearly half of Hispanic/Latino entrepreneurs wanted their businesses to provide jobs for their communities. 46% of Hispanic and Latinx entrepreneurs said that a goal for their business was to create jobs in their local community compared to only 38% of all people who started businesses in 2023.
• Hispanic/Latinx entrepreneurs seek to create their own opportunities.Over half (51%) of small businesses started by Hispanic/Latino founders were started as side-hustles, showing that these entrepreneurs were willing to pursue their own businesses while still making ends meet through working for someone else.

Hispanic/LatinX Entrepreneurs started 12% of businesses in 2023

Twelve percent of new businesses were started by entrepreneurs who identified their ethnicities as “Hispanic or Latino in origin.” This continues the trend of Hispanic and Latinx entrepreneurs starting a larger share of businesses since 2019. Among these businesses, 57% were started by men and 43% were started by women.

Over 1-in-5 Hispanic/Latinx-started businesses were in the community services sector

Twenty-one percent of businesses started by Hispanic and Latinx founders in 2023 were in the Community Services sector, compared to only 15% of all businesses started in 2023. Although these businesses can be non-profit, they are predominantly educational services, health care, or child care services – all businesses that are vital for the long term health and growth of the community. Hispanic/Latinx entrepreneurs are not only using their businesses to invest in themselves, but are actively investing in their communities.

Hispanic & Latinx entrepreneurs started their businesses to seek flexibility and long term stability

Nearly 3-in-4 Hispanic/Latino entrepreneurs in 2023 started their business to provide themselves with more flexibility. Entrepreneurs citing flexibility as a reason to start their business often value being their own boss and mapping out their own careers, something that starting a business provides.

Further, Hispanic/Latinx entrepreneurs seek to build long-term financial stability for themselves and their families through business ownership. Nearly 60% – compared to only 40% of all entrepreneurs – say that building an asset is a reason for starting their business. This long-term financial view of Hispanic/Latinx entrepreneurs shows that they’re looking to make a long-lasting impression on the economy while also creating new opportunities for their families.

Nearly half of Hispanic/Latino entrepreneurs wanted their businesses to provide jobs for their communities

Unsurprisingly, many Hispanic/Latinx business owners who started their companies in 2023 said that the goals for their business included stability in the future and having more control over their time. Many Hispanic/Latinx business owners started their businesses precisely for this reason. However, 46% of Hispanic and Latinx entrepreneurs said that a goal for their business was to create jobs in their local community compared to only 38% of all people who started businesses in 2023.

Hispanic/Latinx entrepreneurs want their businesses to be positive forces in their community through driving economic progress. Sometimes they exhibit this through the type of business they start – like businesses offering community services like child care – and sometimes they exhibit this through providing opportunity for others in their community.

Hispanic/Latinx entrepreneurs seek to create their own opportunities

In 2023, 44% of businesses were started as side hustles, or by people who were employed by someone else while they were starting their business. Over half (51%) of small businesses started by Hispanic/Latino founders were started as side-hustles, showing that these entrepreneurs were willing to pursue their own businesses while still making ends meet through working for someone else.

Hispanic/Latinx entrepreneurs were resilient in searching out their own financing to support their business. In addition to being more likely to start their businesses as side-hustles Hispanic/Latino entrepreneurs were more likely to receive start-up financing as private business loans or to finance their businesses from personal funds. For many very new businesses, private business loans generally require a personal guarantee putting the entrepreneur on the hook for any funds that the business uses. With decreased access to loans from their community, loans backed via the Small Business Administration (SBA), and equity investors Hispanic/Latino owners turned to their own resourcefulness to get their business started.

Conclusion

In 2023, Hispanic/Latinx entrepreneurs started 12% of new businesses, maintaining a growing trend of entrepreneurial activity within this demographic. Their focus on creating businesses in the community services sector highlights a dedication to addressing local needs, while their drive for flexibility and long-term stability underscores their commitment to both personal and economic growth. The prevalence of side-hustle startups and self-reliant financing further illustrates their resilience and determination. These trends emphasize the significant and multifaceted impact Hispanic/Latino entrepreneurs are making on their communities and the broader economy.