The Latino Community Fund (LCF Georgia) unveiled today key findings from the 2018 Georgia Latino Entrepreneurship Study, the first of its kind in the state of Georgia.
The research study was a collaboration with the Stanford Latino Entrepreneurship Initiative (SLEI), researchers from Emory Goizueta Business School, the University of Georgia, the UGA Small Business Development Center (SBDC) Office of Minority Business Development as well as local community organizations and leaders.
“Latino entrepreneurs are great contributors to Georgia’s economy, yet this study has brought to light a number of challenges our community faces when engaging in commercial activity in the state. We are looking forward to developing a concerted effort across sectors to create the conditions for our entrepreneurs to grow and thrive,” said Gigi Pedraza, Executive Director of the Latino Community Fund, local organizers of the study.
Carolina Ramon, Director of the UGA SBDC Office of Minority Business Development and co-author of the report, emphasized the significance of the findings: “The number of Latino businesses in Georgia continues to grow. It is imperative to understand and address the challenges, needs, and opportunities for those enterprises, so we can provide resources to help them to improve in terms of revenues, financial and operational capacity.”
The methodology used by the team included a stratified sample design based on the characteristics of Hispanic-owned Businesses in Georgia as reported by the 2010 Census data with a focus on gender and heritage. Local data collection provided a sample quite representative of the larger population of Latino business owners in Georgia. Local findings are then compared with national averages for Latino-owned businesses as well as what are considered “advanced states” for the communities: Texas, California, New York, and Florida.
According to the study, Georgia Latino entrepreneurs are predominantly foreign-born and recent immigrants (82%), a much higher rate than the national average of Latino entrepreneurs (44%).
Motivations to start businesses are a combination of voluntary choices (pull factors) and involuntary choices (push factors) factors, including entrepreneurship as an opportunity to increase income and wealth but also as a survival strategy due to lack of opportunities finding employment and to balance work and family.
Latino owned businesses in Georgia are smaller than the ones in Advanced States with 89% of Latino-owned businesses in the survey reporting median revenues below $250,000 versus 84% in the Advanced States, however the more pronounced revenue gaps are when considering gender.
While 64% of the businesses belong to Latino women, 95% of the businesses that Latino women own report revenues under $250,000. Our data shows that for Latino women, the median revenue gap with male-owned businesses in Georgia $58,000 compared to $46,810 in the Advanced States). In terms of income, the gap is approximately 2 times the gap in Advanced states ($25,000 in contrast with the $12,000 in the Advanced States).
The study notes that Latino businesses are a cornerstone of our community. Families co-own almost a quarter of businesses in Georgia, above the average in the US and advanced states, and the overwhelming majority of its clients are other Hispanics & Latinos within the surrounding community with 71% of Latino-owned businesses in Georgia engaging in commercial activity strictly in Spanish or English and Spanish, compared to 56% in the Advanced States and 45% in the rest of the USA.
Enablers of small business success from surveyed businesses are education, certification, funding knowledge, strong personal networks, and a strong social safety net.
The study was supported by the UGA Small Business Development Center, Office of Minority Business, Invest Atlanta, Fifth Third Bank, the Emory Goizueta Business School, Invest Atlanta and the Cross Keys Sustainable Neighborhood Initiative. The Steering Committee of local community leaders, academics and researchers, included representation from Emory Goizueta Business School, University of Georgia, the Latin American Chamber of Commerce Georgia (LACC Georgia), the Georgia Hispanic Chamber of Commerce (GHCC), the Coalición de Líderes Latinos de Dalton (CLILA), the Hispanic Alliance GA (La Alianza) and the Entrepreneurship Track at the Cross Keys High School.