Multicultural Entrepreneurs: Business Growth and Needs among Hispanics and African Americans
By Tony D’Andrea, PhD – Director of Planning and Research SJG
Hispanics and African Americans are increasingly interested in brands delivering on convenience, efficiency and security. This is a reflection of an entrepreneurial boom of business and career development being currently seen among multicultural segments. In fact, the number of minority-owned businesses has been growing twice as fast as the national average. Based on U.S. Census Bureau data, we can conservatively estimate that 2.8 million Hispanics and 2.4 African Americans now own and run business firms, and this trend is likely to continue.
While media attention goes to multinational investments and high-tech startups, the fact is that minority-owned businesses now register half-a-trillion dollars in annual revenue. Over 90% of these firms are sole-proprietorships established by professionals who fled the corporate ladder or by technical workers providing services as freelance contractors. Still, the remainder employs over 3 million people, as culmination of a 20% increase in job creation over five years against a near flat national average measured by the U.S. Census Bureau.
Reflecting clusters of opportunity and skill culled over time, multicultural entrepreneurs gravitate towards certain industries. Half of all Hispanic-owned businesses operate in construction, repair services, healthcare, and transportation/warehouse. Similarly, half of all African-American-owned firms concentrate in healthcare (a significant fifth of all Black firms), repair services, transportation/warehouse, and technical services. They are mostly located in larger cities and metropolitan areas, in line with the demographic footprint of Hispanics and African American segments which now amass a 2.5 trillion dollar consumer purchasing power.
This means new opportunities for marketers catering to small businesses, their managers, owners and families. Hispanics and African Americans are consuming more products and services that help them cope with ever busier lifestyles. They are looking for products that are more convenient, save time, and contribute to a sense of wellbeing and comfort that assuages their stressful schedules. Although marketing of brands for mid-to-high-income, highly-acculturated segments often follows general market approaches, it is also the case that culturally-sensitive marketing, along the line of the emerging fusionista style, works especially well among younger and rising segments of multicultural populations embodying new lifestyles, needs and aspirations.
