September 23, 2015
By Jon Lieber
If you want to understand the future of small businesses in America, you also need to understand this: In 2012, one out of every six Americans was Hispanic. By 2060, that number will be more like one in three. Today nearly 3.3. million Hispanics own their own business, and they are one of the fastest growing groups of business owners in the United States, starting businesses at a rate of three times the national rate.
Thumbtack’s annual Small Business Friendliness Survey is a one-of-its-kind look at what makes a state or local government work for small businesses. Based on survey responses from 18,000 small business owners nationwide, we asked small business owners questions about the friendliness of local tax laws, licensing rules, and the regulatory environment. We use these responses to rank cities and states based on their friendliness to small business, from best (Texas) to worst (Rhode Island).
This year, we also wanted to know what states were best for entrepreneurs who self-identified as Hispanic.
The Face of Hispanic-Owned Small Businesses
Hispanic business owners made up 10 percent of the respondents in our survey, which is roughly in-line with their share of business ownership generally across the United States. They have the strongest presence in home improvement (22 percent of Hispanic business owners we surveyed), cleaning (16 percent), and events categories (18 percent).
Hispanic business owners say that the biggest factors that matter for them are the friendliness of labor rules, opportunities for training and networking, and the friendliness of health and safety regulations. Nationally, 2.5 million people work at Hispanic owned-businesses, and understanding which policies most affect them could help these businesses grow and hire more people.
Friendliest States for Hispanic Small Businesses
Based on our survey, we looked at 22 states with a strong presence of Hispanic entrepreneurs and ranked the top ten states in terms of how friendly Hispanic business owners say they are:
Only three of our top ten states overall were also top states for Hispanic entrepreneurs. Oregon and Pennsylvania emerged as two winners who were ranked much more highly by Hispanics than they were by other business owners. This group includes states like Texas and Arizona with a relatively large Hispanic population and those with a relatively small population, like neighboring Ohio and Pennsylvania.
For a state like Tennessee, which has the lowest median income for Hispanics in the country, Hispanic entrepreneurs were especially enthusiastic about encouraging others to go into business for themselves – given a relative lack of opportunity elsewhere, it could be that self-employment in lower-income states provide chances to earn a living that don’t exist elsewhere.
In general, Hispanics were more likely to report that they were in professions that required a professional license, so the ease of complying with these rules mattered slightly more to them than other groups. Hispanics were also more likely to be employers than other groups in our survey, which explains the relatively higher importance this group put on labor laws. As a group, Hispanic entrepreneurs were more concerned about home values and gas prices when asked what should be the top priority of the federal and local governments, and were the least concerned about unemployment and the job market.
Draconian immigration policies don’t seem to hurt perceptions of state governments by Hispanic entrepreneurs – two of our highest ranked states, Utah and Arizona, have enacted laws that attempt to go further than federal law in enforcing immigration rules (even though courts have subsequently limited the impact of those laws).
Source: Thumbtack Journal