September 15 through October 15, 2025, is National Hispanic Heritage Month. It’s a time to recognize the contributions of the Hispanic population to the U.S. Hispanics comprise about 20% of the U.S. population, making them the largest racial or ethnic minority in the country. From a business perspective, Hispanics own more than 5.1 million businesses (14.5% of all U.S. businesses) and employ nearly 3 million workers. Because Hispanics are a minority, there are some government incentives to help start and grow a business. Small business owners in the U.S. should pay close attention to Hispanic businesses and to Hispanic consumers because of their economic influence, demographic growth, and cultural impact.
Status of Hispanic businesses
According to Brookings, “Latino or Hispanic-owned businesses have grown at an average annual rate of 7.7%, surpassing the 0.46% growth rate for all employer businesses.”
Best locations for Hispanic businesses
WalletHub’s recent survey shows the best locations for Hispanic entrepreneurs, ranking them from #1 (Orlando, FL) to #182 (Huntington, WV). Eleven of the top 20 cities are in Florida. The survey is based on 23 key indicators of business-friendliness toward Hispanic entrepreneurs, which are grouped into two main dimensions — Hispanic business-friendliness and Hispanic purchasing power. Dover, DE, ranked #1 for Hispanic purchasing power.
Government contracting
The federal government aims to award 23% of prime federal contract dollars to small businesses. Many Hispanic-owned businesses may qualify as “small” for purposes of these contracting opportunities. Some of these dollars are supposed to go to specified small businesses.
- Small disadvantaged businesses (SDBs). The aim is at least 11% of federal contracting dollars. SDBs are firm 51% or more owned and controlled by one or more disadvantaged persons. Disadvantage means socially or economically disadvantaged (there are net worth and income limits).
- 8(a) businesses. They are supposed to receive 5% of small business contracts. Businesses eligible in this category include firms 51% or more owned and controlled by one or more disadvantaged persons.
- HUBZone businesses. They are supposed to receive 3% of prime contract dollars. HUBZone businesses are firms within distressed urban and rural communities and have at least 35% of its employees living with the HUBZone.
State and local governments also have contracting opportunities that may benefit Hispanic-owned businesses.
Tax breaks
There are no specific tax breaks for Hispanic-owned businesses; they are treated like all businesses. But because they may be located in low-income areas, certain tax breaks come into play:
- Opportunity zone businesses. If a business is located within a designated Opportunity Zone (there are more than 8,700 designated zones and meets the criteria to be a Qualified Opportunity Zone Business (QOZB), it may attract investments to help the business grow. Investors reap serious tax breaks for their investments. They invest in Qualified Opportunity Zone Businesses (QOZBs) (see Q56 and Q57).
- New markets credit. This is a federal designed to encourage investment in low-income communities (places where the poverty rate is 20% or more or median family income is at or below 80% of the area median). Investors make equity investments in Community Development Entities (QDEs), who get a tax credit—spread over 7 years. The credit, which had been temporary, was made permanent by the One Big Beautiful Bill Act. QDEs use the investments to make attractive loans to businesses within their area.
Final thought
You don’t have to be Hispanic to appreciate Hispanic Heritage Month. As a small business owner, it’s important to recognize the demographics…with about 20% of the population Hispanic now and 28% expected by 2020…and what this represents in terms of buying power. Buena suerte to all small business owners!
For information concerning business start-ups, see this list of blogs.
