O.C. on Leading Edge of National Surge in Latino-Owned Businesses

WASHINGTON — The number of Latino-owned businesses soared 76% between 1987 and 1992, and their sales receipts rose 134%, far outstripping the general growth in U.S. business, the Census Bureau reported Wednesday.

Latino-owned firms, which are moving rapidly beyond small “mom and pop”’ enterprises into a wide variety of sophisticated ventures, now account for 4.5% of all U.S. businesses, and generate 2.2% of gross receipts.

California was the leading state for Latino entrepreneurs. The state’s 249,717 Latino firms account for 11.1% of the businesses in the state and generate $19.6 billion in receipts, or 4.8% of the statewide total.

“Entrepreneurship is the flame that heats the American melting pot,” Everett M. Ehrlich, undersecretary of commerce for economic affairs, said at a news conference where the report was released.

The hot spot for Latino business is Los Angeles, which had 109,104 firms with 65,000 paid employees and receipts of $7.8 billion. Orange County also had a strong showing with 19,270 companies with 14,503 workers and receipts of $1.6 billion.

“Orange County is a good place for Latinos to do business. We’ve got an entrepreneurial spirit here,” said Trudy Wilson, executive director of the Hispanic Chamber of Commerce of Orange County, a trade group of 300 local firms.

Infotech Development Inc. in Santa Ana, with $113 million in revenue, is the biggest Latino-owned business in the county. “We think Orange County is a good place to do business,” spokesman John Reza said.

Indeed, said Isabelle Villasenor, who operates seven McDonald’s franchises through her firm, Dejon Enterprises in Cypress: “Look at the percentage of Hispanic consumers we have here. That’s who we want to cater to. Southern California is a great market.”

The number of Latino-owned businesses nationwide rose to 862,605 in 1992, up from 489,973 five years earlier, a spurt of 76%. The total number of U.S. businesses climbed 26%, from 13.7 million to 17.3 million, over the same period.

In those five years, revenue at the Latino-owned enterprises jumped to $76.8 billion from $32.8 billion, a gain of 134%. The figure for all U.S. enterprises climbed 67%, from $2 trillion to $3.3 trillion.

The extraordinarily rapid increase “confirms all our findings in the Chamber of Commerce about the growth of Hispanic entrepreneurs,” said Jose Nino, president of the United States Hispanic Chamber of Commerce, which has had its own sharp expansion to 250 chapters from 60 chapters in the early 1980s.

The growth reflects “part of the evolution of we as a people in America,” he said. “We have become more educated. . . . Doors have opened for us.”

Despite the boom in business, lack of capital has restricted Latino participation in a number of businesses, particularly finance, insurance, real estate, wholesale trade, pharmaceuticals and manufacturing, Nino said.

The economic expansion far surpassed the demographic growth. The Latino population expanded by approximately 7%, and Latinos accounted for 9.5% of the nation’s population in 1992.

“Our businesses serve everybody,” Nino said. The firms have expanded beyond their origins in local Latino communities, and serve wide markets across America.

Even so, Nino said, Latinos continue to experience difficulties that only government programs can help them surmount. “We are growing but continue to face numerous obstacles,” he said. “To eliminate affirmative action would have a devastating impact.”

Three states--California, Florida and Texas--account for 61% of the Latino population and nearly 68% of the firms.

California had 250,000 firms, or 32% of all Latino-owned enterprises, followed by Texas with 156,000, or 20% of the total, and Florida, with 118,000, or 15%.

The Latino-owned companies are smaller, with an average of $89,000 in receipts, compared with $193,000 for all U.S. companies.

There is a heavy concentration of very small enterprises--47% of the firms had revenue under $10,000. And just a tiny handful--9,200 of the 863,000--had receipts of $1 million or more.

Rosenblatt reported from Washington and Vrana from Orange County. Also contributing to this report was Times staff writer Vicki Torres, who reported from Los Angeles.

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How the States Rank

California ranks first among the states in number of Latino-owned businesses. But in terms of Latino firms as a percentage of total businesses in the state, it drops to fourth.

Total Latino Firms

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State Number Receipts (billions) California 249,717 $19.6 Florida 118,208 16.1 Texas 155,909 11.8 New York 50,601 4.7 New Jersey 22,198 2.8 New Mexico 21,586 1.5 Illinois 18,368 2.0 Arizona 17,835 1.3 Colorado 13,817 1.2 Virginia 7,654 1.0

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Latino Firms as % of Total Firms

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Latino firms Latinos as % State as % of total of population New Mexico 20.1% 38.9% Texas 12.4 26.5 Florida 11.8 12.9 California 11.1 27.0 Arizona 7.2 19.6 Nevada 4.4 11.2 New York 4.4 13.1 New Jersey 4.3 10.3 Colorado 4.3 13.2 District of Columbia 4.1 6.0

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Sources: Census Bureau, Commerce Department