Hispanic Businesses are Expecting a Boom

By Jackie Velez.

The small business economy has survived every economic crisis thrown its way. Through collective resilience and a willingness to adapt, entrepreneurs in the United States have found ways to endure (and thrive) in times of struggle. No matter how hard the economy is hit – from the Great Depression to the Great Recession to our most recent global pandemic crash – each low point is inevitably followed by a strong recovery led by small business owners. This time, Hispanic business owners are ready to lead the charge.

At the beginning of this past Hispanic Heritage Month, a Bank of America study found that 81% of Hispanic small business owners expect revenue to increase within the next 12 months. Almost half are planning to hire new employees, as well. With this optimism and widespread ambition for growth in the immediate future, the next step is determining how that small business boom could become a reality.

Regardless of industry, digitization has permeated all aspects of business operations, and managing finances with innovative software can be the difference-maker in such a volatile economy and labor market. That’s not to say that the small business no longer needs a bookkeeper or accountant. When they begin leveraging technology, their accountant becomes more of an advisor or business coach to help their business grow to the next level even quicker. This is precisely the connection Xero is currently working to foster: a prosperous, tech-driven connection between Hispanic accountants and bookkeepers and entrepreneurs that can uplift an entire community of business owners to meet their goals.

Some of the myriad benefits for business owners that use, or partner with, innovative accounting services include:

● Accessibility that can combat possible confusion from language barriers and complicated financial language within tax forms, bank reconciliation records, and other documents.

● Automation that heightens efficiency and productivity in other areas of a business. Hispanic business owners embrace the hustle, and being able to harness that energy in the right places is essential, rather than being caught up in tedious data-entry or bookkeeping tasks.

● Foresight into potentially tricky financial situations including debt payments, tax season and general risk management, as well as opportunities for growth and places where the business can scale.

● Stability thanks to the consistency offered by quality software that removes the risk of human error and flawed decision-making.

Personal experience within the Hispanic community has shone a spotlight on the apprehension that our entrepreneurs have toward adopting technology. While many business owners strive to maintain personal agency, this can become unnecessary in an age where digital tools have proven to upgrade a business owner’s workflow and long-term success rate. How can this change come about in the short-term?

That’s right. Real, human accountants (with an arsenal of digital accounting software, of course) who are ready to serve Hispanic small businesses.

A study carried out by the Asset Building Policy Network (ABPN) revealed that the average Hispanic household has 12% of the wealth that the average White household has. In addition, businesses owned by households of color are, on average, worth less than a third of the average White household’s business. Many Hispanic small business owners are doing well for themselves, yet they can’t afford a house and don’t have any plan for retirement. These systemic failures can be corrected, and the racial wealth gap can be narrowed significantly if Hispanic entrepreneurs seek out advisors that understand their position and mindset. The ability to be truly understood, to strategize and to set goals with an informed and innovative bookkeeper within the community can be a game-changer.

During past economic downturns, it has taken years and major legislation to bring about recovery for small business owners – especially for Hispanic people and other communities of color. Unlike those past situations, the optimism and hustle has already bounced back in 2021 and all it could take for a business boom is the willingness to partner with and commit to using digital business platforms to drive success.

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Jackie Velez is Xero‘s director of the U.S. Hispanic market.