California Leads the Nation in Number of Latino-Owned Firms but Gap Shrinks

Businesses owned by Latino entrepreneurs continue to grow at a rapid pace, but California, which is home to more Latino-owned firms than any other state, is lagging behind other areas, a business group said.

“The state of Hispanic business in this country is very, very impressive,” said Hector Barreto, president of the U.S. Hispanic Chamber of Commerce. “I think we have been very lucky so far, and I think we need also to (find) our community a place in the mainstream.”

The number of Latino-owned businesses increased to nearly 273,400 in 1982, up 24.6% from 219,355 in 1977, according to the most recently available statistics from the Census Bureau.

The U.S. Hispanic Chamber of Commerce, in a study released Thursday, estimated that Latino-owned firms now number about 339,500, a 23.6% jump from 1982, and will increase another 13.7% to 386,060 in 1990. Gross revenue now totals an estimated $19.97 billion, up from $16.7 billion in 1982, and is projected to rise to $25.3 billion in 1990, the Kansas City, Mo., group said.

Among states, California leads with nearly 75,000 Latino-owned companies, followed by Texas with slightly more than 61,540 and Florida with about 33,516, according to 1982 Census Bureau data. Los Angeles County, with about 42,600 Latino-owned businesses, has more such companies than any other metropolitan area in the nation.

But the states with the highest rates of business formation by Latinos between 1977 and 1982 were surprising, said Paul Martinez, the Hispanic chamber’s Los Angeles-based Western regional manager. Oregon led with an 88.3% growth rate, trailed by Oklahoma (73.2%), Washington (64.4%), Virginia (57.4%) and Louisiana (38.4%)--states not known for high concentrations of Latinos.

“In California, we’ve got to do some work to catch our competitors here (in the state) and pass those guys in the Northeast,” Martinez said.

Part of the reason for the high percentages is mathematical, Martinez said. In Oregon, for example, even though the number of Latino-owned businesses nearly doubled in the five-year period, the total in 1982 was only 1,175 businesses.

But beyond that, Latinos in the Southwest tend to open businesses in areas that produce lower revenues than those in Florida, where Latinos have made greater inroads in opening banks and financial services businesses, for instance, Barreto said.

“California has almost twice as many (Latino-owned) businesses as Florida, but in dollars, Florida is almost even with California in revenues,” Barreto said. “We have limited ourselves to maybe small businesses and we have not really made the jump” to larger enterprises.”