Hispanic Owned Businesses Press Conference_Final_100710

Hispanic-Owned Businesses Economic Census News Conference

Thursday October 7, 2010

© 2010 Milenio Associates, LLC

Importance of Census data on Hispanic-owned businesses discussed at news conference hosted by

Sen. Pichardo, RI Latino Professional Business Network

The number of Latino-owned businesses in the United States increased by 43.7 percent, to 2,259,857 firms from 2002 to 2007. That rate of increase is more than twice the national average of 18 percent during the same time period for all businesses. Hispanic-owned firms generated more than $345.2 billion in sales in 2007, an increase of 55.5 percent over 2002.

In Rhode Island, according to the recently-released figures from the 2007 Survey of Business Owners by the U.S. Census Bureau, Hispanic-owned companies jumped from 3,415 in 2002 to 5,764 in 2007, an increase of 68.8 percent. Over the same time period, revenues increased by 115.4 percent, from 213.7 million in 2002 to 460.4 million in 2007.

Sen. Pichardo and the Rhode Island Latino Professional Business Network hosted a news conference today that brought together U.S. Senators Jack Reed and Sheldon Whitehouse, U.S. Congressman Jim Langevin, Rhode Island Economic Development Corporation Executive Director Keith Stokes, and local economic development and business leaders.

In addition to calling attention to the report, released two weeks ago, the leaders gathered today to highlight the significance of the numbers and how they could be meaningful to state and local efforts to foster economic development. The data will also be useful in providing assistance to help Hispanic-owned companies, as well as non-Hispanic-owned companies, to remain in the state and grow jobs here.

“We have taken bold action in the General Assembly to make it easy to do business in Rhode Island by reforming the tax code, cutting red tape, enhancing the skills of the workforce and improving accesses to capital, all of which will help Latino businesses as well as every other business,” said Sen. Pichardo D – Dist. 2, Providence.

Sen. Pichardo continued: “This data helps us to make more informed decisions as we work to integrate the economic development agendas on the state and local levels to capitalize on the momentum of this thriving sector of our economy. Hispanic firms are a major engine of job creation. As the Latino economy grows, the economy of the state grows as well, and that benefits all of us. We need to incorporate this data into our vision for the state of Rhode Island and our growth strategies for emerging markets.”

Tomas Alberto Avila, Coordinator for the Rhode Island Latino Professional Business Network and Managing Partner of Milenio Associates, LLC, said, “It is encouraging that the Hispanic business community is growing, but we hope the new administration that will be elected November 2 makes this growth a priority in their job creation and economic development plans.”

Sen. Pichardo and Mr. Avila said that the data is useful in efforts to maintain the local tax base, © 2010 Milenio Associates, LLC

assist local businesses, for research and public policy purposes, and to prepare for disaster response. They are seeking to use the data to advance economic development agendas by analysis of issues such as market share, site location, enhancement of business opportunity presentations to banks or venture capitalists, and the evaluation of new business opportunities.

U.S. Senator Jack Reed, a member of the Senate Banking Committee who recently helped pass the Small Business Jobs Act to provide $12 billion in tax breaks for small businesses nationwide, said, “Hispanic entrepreneurs are an integral part of Rhode Island’s economy. This survey shows there is growing diversity in both the types of Hispanic-owned businesses and an expansion of their customer base. And just as the Hispanic business community continues to grow, we are also seeing an increase of Hispanic customers for all Rhode Island businesses, which has a very positive economic impact for the state. These are challenging economic times, and I will continue working to empower entrepreneurs and ensure that all businesses have access to the capital they need to grow, create more jobs, and help boost our economy.”

U.S. Senator Sheldon Whitehouse said, “The Latino community is a vibrant part of Rhode Island’s economy. At a time when jobs are scarce and our economy is struggling, I’m thankful for the hard work and dedication of the over 5,700 Latino-owned businesses in Rhode Island.”

Congressman Jim Langevin said, “Small businesses, especially in the neighborhoods of Providence, are critical to our community's continued growth. Data like this, coupled with legislation such as the recently passed Small Business Jobs Act, will help us boost lending for businesses to hire new employees and expand their operations.”

Rhode Island Economic Development Corporation Executive Director Keith Stokes said, “As the data demonstrates, Rhode Island’s Hispanic-owned businesses are a bright spot for Rhode Island’s economy. We need to continue to align our economic development strategy and business development efforts to capitalize on this momentum so vibrant, dynamic companies looking to grow and create jobs in our state have the necessary tools and resources to succeed.”

The survey data shows that Rhode Island is tied with Florida as the states with the fifteenth highest percentage of growth in Hispanic-owned businesses, 68.8 percent. Arkansas saw the highest rate of growth, at 160.6 percent.

The report on Hispanic-owned businesses is the first of 10 reports on the characteristics of minority-, women-, and veteran-owned businesses and their owners scheduled for release over the next year. The Survey of Business Owners provides the only comprehensive, regularly collected source of information on selected economic and demographic characteristics for businesses and business owners by gender, ethnicity and race. Title 13 of the United States Code authorizes the survey and provides for mandatory responses. Data has been collected every five years since 1972 in years ending in “2” and “7” as part of the economic census. The program began as a special project for minority-owned businesses in 1969 and was incorporated into the economic census in 1972 along with the Survey of Women-owned Businesses.

Today’s press conference was held at Ada’s Creations, a Hispanic-owned business on Broad Street in Providence which is a center of economic activity and growth.


Hispanic-Owned Businesses Economic Census News Conference

Program

Thursday October 7, 2010Ada’s Creation - 1137 Broad Street

11:00 AM – 12:00 PM

Program

Welcome and IntroductionTomás Alberto Ávila, RILPBN

Remarks

Senator Juan PichardoDeputy President Pro Tempore, Rhode Island State Senate

U.S. Senator Jack Reed

U.S. Senator Sheldon Whitehouse

U.S. Congressman Jim, Langevin, 2nd Congressional District

Keith Stokes, Executive Director, RIEDC

Testimonial

Oscar Alexis MejiasPresident HITEP

Sixcia DevineRegional Director Providence, Metro RISBDC

Rick M. Quiles, MDCEO Park Pediatrics, LLC

Question and Answer Session Conclusion and Media Availability


RI Latino-Owned Businesses increased 68.8 percent since 2007 to 5,763 according to the 2007 Economic Census

According to a report released last month by the Commerce Department's Census Bureau, the Latino owned businesses in the United States totaled 2,259,857 firms, employed over 1,573,464 people and generated $345 billion revenues in 2007 a 43.6% increase from 2002.

The data for the state of Rhode Island shows that the state has a total of 5,763 Latino owned businesses with total sales and receipt of $460 million annually for a change of 68.8% in number of firms with or without paid employees, 2002 to 2007.

These new data come from the Survey of Business Owners: Hispanic-Owned Businesses: 2007, which provides detailed information every five years for Hispanic-owned businesses, such as the number of firms, sales and receipts, number of paid employees and annual payroll.

“This data helps us to make more informed decisions as we work to integrate the economic development agendas on the state and local levels to capitalize on the momentum of this thriving sector of our economy. . Hispanic firms are a major engine of job creation. As the Latino economy grows, the economy of the state grows as well, and that benefits all of us. We need to incorporate this data into our vision for the state of Rhode Island and our growth strategies for emerging markets.” said Sen. Pichardo D – Dist. 2, Providence

“It is encouraging that the Hispanic business community is growing, but we hope the new administration that will be elected November 2, makes this growth a priority in their job creation and economic development plans,” said Tomas Alberto Avila, Coordinator for the Rhode Island Latino Professional Business Network

The survey data shows that Rhode Island tie with Florida as the fifteen States with the fastest rates of growth for Hispanic-owned firms between 2002 and 207 in comparison to 2002 when it tied with Georgia for second place.

Statistics are shown for non-Hispanic businesses, for businesses that are equally (50 percent/ 50 percent) owned by both Hispanics and non-Hispanics, and for four Hispanic subgroups — businesses owned by people of Mexican, Cuban, Puerto Rican or other Hispanic origin.Data are presented by geographic area (including county, city and metro area), industry and size of business.

Geographic Area

All Hispanic-owned firms, 2007 (number)

All Hispanic-owned firms, 2002 (number)

Percent change in number of all Hispanic-owned firms (%)

Receipts for Hispanic-owned firms, 2007 ($1,000)

Receipts for Hispanic-owned firms, 2002 ($1,000)

Percent change in receipts for Hispanic-owned firms (%)

Rhode Island 5,764 3,415 68.8 460,382 213,718 115.4

The survey data shows that Rhode Island tie with Florida as the fifteen States with the fastest rates of growth for Hispanic-owned firms between 2002 and 2007 compare to 1997 and 2002 when it tie Georgia as the second fastest rates of growth.


Survey of Business Owners - Hispanic-Owned Firms: 2007

SUMMARY OF FINDINGS

Hispanics owned 2.3 million nonfarm U.S. businesses in 2007, an increase of 43.6 percent from 2002. In 2007, Hispanic-owned firms accounted for 8.3 percent of all nonfarm businesses in the United States, 1.6 percent of total employment and 1.1 percent of total receipts.

The 2007 Survey of Business Owners (SBO) defines Hispanic-owned businesses as firms in which Mexicans, Mexican Americans, Chicanos, Puerto Ricans, Cubans, and Other Spanish, Hispanics, or Latinos own 51 percent or more of the stock or equity of the business. The 2007 SBO data were collected as part of the 2007 Economic Census from a sample of more than 2.3 million nonfarm businesses filing 2007 tax forms as individual proprietorships, partnerships, or any type of corporation, and with receipts of $1,000 or more.

KIND-OF-BUSINESS CHARACTERISTICS

In 2007, 30.0 percent of Hispanic-owned firms operated in the construction industry (NAICS 23) and the repair, maintenance, personal, and laundry services industries (NAICS 81). The distribution of firms according to sector Hispanic-owned firms accounted for 10.4 percent of all U.S. businesses in these industries. Wholesale trade (NAICS 42), retail trade (NAICS 44-45) and construction (NAICS 23) accounted for 50.7 percent of Hispanic-owned business revenue.

GEOGRAPHIC CHARACTERISTICSCalifornia had the most Hispanic-owned firms at 566,436 (25.1 percent of all such firms), with receipts of $80.8 billion (23.4 percent of all Hispanic-owned firm receipts). Florida had 450,075 Hispanic-owned firms or 19.9 percent, with receipts of $72.9 billion or 21.1 percent. Texas had 447,391 Hispanic-owned firms or 19.8 percent, with receipts of $62.1 billion or 18.0 percent.

EMPLOYER CHARACTERISTICS

In 2007, there were 249,044 Hispanic-owned employer firms. These firms employed 1.9 million persons with a total payroll of $54.7 billion, an increase of 26.0 percent and 49.0 percent respectively from 2002. In 2007, these firms generated $274.6 billion in receipts, an increase of 53.0 percent. Employer firms accounted for 11.0 percent of the total number of Hispanic-owned firms and 79.5 percent of Hispanic-owned firms’ gross receipts. The average receipts for these employer firms was $1.1 million.

NONEMPLOYER CHARACTERISTICSIn 2007, there were 2.0 million Hispanic-owned firms without paid employees. These firms generated $70.6 billion in receipts, an increase of 66.5 percent from 2002. In 2007, nonemployers accounted for 89.0 percent of the total number of Hispanic-owned firms and 20.5 percent of gross receipts. The average receipts for these nonemployer firms was $35,116.


Rhode Island 2007 Survey of Business Owners

Statistics for Selected Counties With 100 or More Hispanic Owned Firms: 2007All Firms¹ Firms with Paid Employees

Rhode Island FirmsNumber

Sales andReceipts

Employee Firms

EmployerReceipts

Employees(Number)

AnnualPayroll

($1,000) (number) ($1,000) ($1,000)

Rhode Island 5,763 460,382Kent County 284 27,132 S S S SNewport County 214 12,748 S S S SProvidence 5,043 394,945 296 267,650 1,600 50,513Washington 144 22,122 S S S S

Source: U.S. Census Bureau, 2007 Survey of Business OwnersNote: The data in this file are based on the 2007 Economic Census, Survey of Business Owners (SBO). To maintain confidentiality, the Census Bureau suppresses data to protect the identity of any business or individual. The census results in this file contain sampling and nonsampling errors. Data users who create their own estimates using data from this file should cite the Census Bureau as the source of the original data only.


Source: U.S. Census Bureau, 2007 Survey of Business Owners



Economic Census Information Drives Decision Making

Maintain local tax baseThe Economic Development Commission of many states attempt to attract new business to the state, and retain those they already have, by talking to companies about real estate and workforce needs. They use Economic Census data to identify industries growing nationally but not doing as well locally.

Assist local businessesA consultant uses Economic Census CD-ROMs to compute business averages- such as sales per capita and establishments per 100,000 residents. He markets comparative summaries to shopping mall owners seeking business tenants and to prospective entrepreneurs. He advises them to look for opportunities in communities where an industry is underrepresented relative to state and national norms.

Small Business Development Centers in many states help business owners assess their marketing and management challenges and become familiar with business data sources such as the Economic Census.

ResearchA professor at Harvard University studied a series of votes in Congress related to free trade issues. He used Economic Census data on manufacturing to explore the correlation between each state's industrial structure and the way that state's Congressional representatives voted on these issues.

Public policy and statisticsThe Federal Reserve Board uses Economic Census data to understand change in the American economy, and to benchmark productivity estimates and other measures of economic performance.

The U.S. Department of Commerce uses Economic Census statistics to benchmark and update the National Income and Product Accounts, one of the components of the Gross Domestic Product (GDP) estimates.

Federal and state agencies look to Economic Census data to gauge the effectiveness of programs such as minority contracting guidelines, trade policies, and job retraining.

Disaster ResponseThe Federal Emergency Management Agency uses the Economic Census data by ZIP Code to inventory business locations by industry and size. They use this information to estimate potential losses to employment and productive capacity that might result from a major fire, flood, or other disaster.



Businesses Use Data To Gain Competitive Advantage

Gauge the competitionA soft drink bottler considered expanding into two related beverage-manufacturing operations: milk and alcoholic beverages. Economic Census data shed light on industry specialization, company size, and the relationship of expenses to receipts - information that encouraged the bottler to diversify.

Calculate market shareA restaurant supply wholesaler calculated that it had roughly an 11-percent market share-its own sales divided by state totals for similar businesses - in its primary sales region in the northern mountain states. The wholesaler used that figure as a target when it expanded into Arizona and New Mexico.

Business to businessA man who had developed software for managing quality control operations made a list of industries most likely to use his product, then ranked the top industries based on census figures on value added and growth. He customized his software to appeal to those top prospects. Census data on CD-ROM made it easy to find areas where large plants in the target industries were located.

Site locationA major food store chain uses Economic Census data and population figures to estimate potential weekly food store sales in the trade area for each of its stores. These estimates allow the company to calculate market share for each existing store, and to evaluate prospective sites for new stores. The owner of a chain of auto accessory stores computed the ratio of accessory sales in the Economic Census to household income from the population census for several neighboring metropolitan areas. Finding his own area well above national averages, he inferred that the local market for auto accessory stores might be already saturated. That contributed to his decision to expand into a nearby metro area with a lower ratio instead of adding another store locally.

Design sales territories and set sales quotasAn insurance company uses counts of establishments and sales by kind of business to redesign sales territories and set quotas and incentive levels for agents. By comparing their own records on customers to census figures, company executives found which kinds of businesses were better prospects than others.

Enhance business opportunity presentations to banks or venture capitalistsAn entrepreneur used census data to support her loan application, as she sought financing to start a tailoring and alterations shop for Hispanic executives. She used Economic Census data on her line of business in conjunction with data on Hispanic in managerial occupations from the census of population.

Evaluate new business opportunitiesA manufacturer of industrial chemicals used data on production of semiconductors and other high technology products to assess the feasibility of introducing a line of advanced composite materials.



Strategic Focus RecommendationsIncrease Size, Scale and Capacity of Hispanic Business Enterprises

The Big Picture

The Hispanic business community continues to grow; yet their true economic potential is still unrealized.

Hispanic firms are an engine of job creation, with paid employment growing by 26% from 1.5 million to 1.9 million, compared to 0.03% growth for nonminority-owned firms.

The rapidly growing Hispanic population increased by 18% during this period, compared to only 1 percent growth for non-minorities.

The Hispanic population has an estimated purchasing power of about $1 trillion, larger than the purchasing power of Indonesia ($969 billion), Australia ($824 billion), the Netherlands ($654 billion) and of all but 14 countries worldwide.

Strategic Priorities:Access to Capital – Develop global financing solutions for minority business enterprises such as:

Developing unique public-private partnerships to create funding vehicles for Hispanic Business Expanding the number of financing optionsIncreasing surety bonding opportunities

Access to Contracts – Create openness and transparency in minority business government contract reporting

Access to Markets – Support the National Export Initiative to double exports over the next 5 years. Minority businesses are already twice as likely to export compared to non-minority-owned firms.

Foster innovation and entrepreneurship within minority communities in high-growth industries such as:

Clean and Renewable EnergyGreen TechnologyHealthcare Information Technology

The FeatureCommit to making sure the growth and competitiveness of the Hispanic business community continues to be a national priority.


Creating the foundation for the next generation of $100 million minority-owned firms capable of employing the growing minority population, expanding our tax base and securing our position as a global leader.

To grow more minority-owned firms to size and capacity encourages Hispanic businesses to consider growth by mergers and acquisition, joint ventures and strategic partnerships.

To achieve these priorities, to create this next generation of firms, we need everyone to help and that’s why we also believe in openness and transparency of government.


Hispanic Owned Businesses Press Conference_Final_100710

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Transcript of Hispanic Owned Businesses Press Conference_Final_100710