SMALL BUSINESS : Latino Businesses Expect Sales and Staff to Rise, Study Finds : Survey: The Southland firms are found to be optimistic about the future but lagging in providing benefits and in Web technology.
Latino entrepreneurs in the Southland whose companies gross more than a million dollars a year are vigorously optimistic about the future and serve as a strong source of employment for Latino workers, a survey by the Tomas Rivera Policy Institute shows.
Seventy-four percent of respondents from the five-county region expected sales to increase over the next year; only 1% expected a decrease. Half the companies planned to add employees in the next 12 months.
The study, conducted by the Claremont think tank for the Latin Business Assn., will be highlighted at the LBA’s annual expo Thursday at the Los Angeles Convention Center.
While the 1992 census showed that only 1.2% of Latino businesses nationwide had more than $1 million in annual revenue, the LBA chose to survey that group because it employs 47% of the work force hired by Latino firms and generates 52% of the revenue, said LBA Chairman Hector Barreto.
Of the 273 surveyed firms, 79% reported sales between $1 million and $4.9 million and had an average of 36 full-time employees.
However, fewer than a third provided 401(k) plans or life insurance for their employees. Furthermore, half the respondents said they had no Web site, and of those that did, half reported that their Web site did not generate sales.
Education levels were comparable among respondents born in the U.S. and the one-third who were foreign-born. Slightly more than a third of the business owners surveyed had completed college or graduate work, while a third had some college.
The study showed that neither place of birth nor education level was related to revenue size.
“These are the largest Latino-owned firms,” said Waldo Lopez-Aqueres, director of economic policy research at Tomas Rivera Policy Institute and author of the study. “To think that one-third of these firms are owned by immigrants . . . shows that the immigrant community has done a lot of catching up.”
A quarter of the firms reported a completely Latino work force, while 77% said more than half their employees were Latino. Those firms were more likely to derive most of their revenues from sales to Latinos. But they were less likely to offer health insurance or other benefits and less likely to have a Web site.
Businesses owned or managed by foreign-born Latinos were also less likely to provide health insurance, but more likely to serve the international market. And businesses owned by a college graduate were more likely to provide benefits but less likely to use a predominantly Latino work force or serve the local Latino market.
Respondents overall received only a third of their revenues from sales to Latinos, underscoring how these businesses are a mainstay of the regional economy.
While the weaknesses in benefits and use of technology are of concern, Barreto said, they also underscore opportunities for financial services and technology corporations hoping to tap the Latino business market.
“There’s still a lot of confusion by a lot of companies and influential organizations about how you get your arms around this group,” he said.
Respondents were also asked how they planned to vote in the next presidential election. Thirty-six percent said they would vote Republican, with 32% stating they would vote for Republican front-runner George W. Bush, keynote speaker at the LBA event Thursday. About 21% said they would vote for Democrat Al Gore, and 29% were undecided.
The study relied on a Dun & Bradstreet Corp. database of Latino-owned enterprises with revenues over $1 million. However, 16% of respondents reported sales below that mark, and 13% were not majority Latino-owned. Those firms’ responses were still included in the database, however, because the overall response rate was relatively low.
