The annual Latino-Owned Business Study conducted by Biz2Credit revealed that Latino-owned businesses experienced an increase in revenues, credit scores, and age-of-business in the past 12 months. However, expenses also rose due to inflation, resulting in lower earnings for Latino-owned businesses in 2023-24 compared to the previous year.
Revenues for small businesses increased overall, largely due to inflation. While earnings were down for all businesses, the drop for Latino-owned businesses was not as sharp as for non-Latino-owned businesses. In fact, Latino-owned firms outperformed others in terms of earnings performance.
The average annual revenue for Latino-owned businesses increased by 11.6%, reaching $671,360 in 2023-24, while non-Latino businesses saw an 11.5% increase to $744,027. However, average earnings for Latino-owned businesses dropped by $41,100 to $72,168, compared to a drop of $65,128 for non-Latino-owned businesses.
Operating expenses for Latino-owned companies increased by 22.7%, resulting in a 36.3% decrease in earnings. The average personal credit score for Latino-owned businesses increased from 641 to 647, while the age of business also increased from 54 months to 64 months, indicating the staying power of Latino-owned companies.
The study also found that the average approved funding amount for Latino-owned businesses rose to $75,680, with funding applications from Latino-owned firms increasing year-over-year. Construction was the largest industry category for Latino-owned companies, with Florida accounting for the highest percentage of funding requests.
Overall, the impact of inflation and rising costs such as labor, fuel, rent, and insurance have significantly affected the earnings of small businesses, including Latino-owned firms. However, with the easing of inflation rates and lower interest rates, business owners are hopeful that their revenues may improve once again.
Latino-owned businesses play a significant role in the U.S. economy, contributing billions annually and owning millions of businesses. The growth and success of Latino entrepreneurs are crucial for the economy, especially as the Latino population continues to grow and make up a larger percentage of the population.
As the Latino population and Latino-owned businesses continue to play a vital role in the U.S. economy, business owners remain optimistic about the future and are hopeful that with the current economic conditions, their businesses will thrive once again.
