Hispanic entrepreneurs more optimistic in business survey
Hispanic entrepreneurs are feeling better about their businesses and the nation’s economy than other business owners, a new report reveals.
Bank of America’s 2019 Hispanic Small Business Owner Spotlight survey says 51 percent of Hispanic-owned businesses plan to hire more workers this year compared with 26 percent of non-Hispanic owned companies. Moreover, 87 percent of Hispanic businesses plan to expand their operations compared with 67 percent of all other businesses.
ESCO Aerospace Manufacturing in La Puente is one of them. ESCO makes components for Lockheed Martin and Northrop Grumman. And business is picking up.
“I have 12 employees now and we’re looking into starting another shift,” company CEO Yvonne Escobedo said. “That means more people and more equipment. I’ll probably have to bring on another 12 people.”
Escobedo said the Trump administration’s pro-business stance has given her confidence to move her company forward.
“The big thing is the corporate tax break,” she said. “They lowered the corporate tax from 35 percent to 21 percent. That’s the catalyst for everything … it makes you feel comfortable with buying equipment and hiring. They are thinking about the little guy who is trying to succeed.”
Other survey data worth noting:
- 74 percent of Hispanic-owned businesses expect their revenue to increase this year, compared with 57 percent of non-Hispanic business owners
- 28 percent of Hispanic-owned businesses intend to apply for a loan, compared with 14 percent of other business owners
- 68 percent of Hispanic-owned businesses expect the economy to improve over the next 12 months, compared with 54 percent of other companies
Sergio Rivas, small business banking manager for Bank of America’s Los Angeles market, has a theory about the optimism.
“Many of them own newer businesses that haven’t seen the roller coaster kind of economy more established businesses have, so there is more confidence,” he said.
Still, some aren’t taking any chances.
“We dealt with a tortilla manufacturer that was concerned about commodity prices, so they bought up to six months worth of supplies as a hedge against the economy,” Rivas said.
More workers, more equipment
Frank Montes, chairman of the California Hispanic Chambers of Commerce and founder and CEO of Inland Body & Paint Center in Fontana, is looking to hire five new employees to augment his current workforce of 19. He also plans to invest $100,000 in new equipment.
“I think our culture has always been optimistic,” he said. “When times get tough in our community we refocus. I’m a strong believer that when something bad happens, you look at how you can turn it around and make it positive.”
Still, Montes admits that California isn’t the easiest place to do business.
“More than 2,000 bills were introduced this year that will somehow impact our businesses,” he said. “If you want to scare small business away from California keep introducing all of these bills. The one thing that scares small business is the unknown.”
Health care costs topped the list of concerns among both Hispanic-owned businesses and others surveyed for the BofA report. Additional concerns included commodity prices, trade tariffs, consumer spending and minimum wage increases.
A tight labor market
Hispanic entrepreneurs are among many other businesses grappling with an ultra-competitive job market that has made it harder to attract and retain talent.
Sixteen percent of Hispanic businesses surveyed said they have lost at least 10 percent of their workforce over the past 12 months while 11 percent of non-Hispanic businesses faced the same problem.
To counteract that trend, Hispanic entrepreneurs are offering a variety of perks to attract job candidates. Fifty-five percent offer flexible hours, 36 percent offer flexible locations, 35 percent offer professional development and 32 percent offer discretionary bonuses, the report said.
Alex Guerrero, chief development officer at Valley Economic Development Center in Sherman Oaks, said his organization helps businesses in underserved communities gain access to technical assistance and loans.
“In the last 12 months, 21 percent of our loans have gone to Hispanics and those companies have created 111 jobs as a result,” he said. “It used to be mainly restaurant owners and manufacturing companies, but now we’re funding loans for dentists, accountants and other professionals.”
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