Academic journal article Journal of Small Business Management

Characteristics of Hispanic Female Business Owners: An Exploratory Study

Academic journal article Journal of Small Business Management

Characteristics of Hispanic Female Business Owners: An Exploratory Study

Article excerpt

Recent U.S. Census data reports show that Hispanic-owned small businesses grew 83 percent from 1987 to 1992, compared with a growth rate of only 26 percent for all U.S. businesses during the same period (U.S. Department of Commerce 1996). These businesses also experienced a 195 percent increase in receipts, almost three times higher than the rate of increase experienced for all U.S. businesses. Paralleling the growth of Hispanic-owned businesses is the growth of female-owned businesses, which increased from 4.1 million in 1985 to 6.4 million in 1992 (a 56 percent increase); these businesses employ over 13 million people and generate $1.6 trillion in revenue (U.S. Department of Commerce 1996). However, despite the rapidly increasing growth of Hispanic and female-owned businesses, there is a paucity of comprehensive information on these enterprises. Therefore, this exploratory study serves as baseline research to provide a better understanding of the characteristics of Hispanic female business owners relative to their Hispanic male counterparts.

The specific objectives of the study were to determine whether Hispanic female business owners differ from their male counterparts with respect to: (1) personal background; (2) business organizational characteristics; (3) financial performance indicators and business growth stages; (4) perceived business problems; and (5) patterns of information source usage and networking. The economic viability of minority- and/or female-owned businesses is of fundamental importance to the nation as a whole. Apart from the economic significance of these businesses in the private sector, the survival of these businesses has far-reaching social implications in the public domain (Dadzie and Cho 1989; Sonfield 1986). Acquiring a more comprehensive knowledge of the business patterns and motivations of Hispanic business owners, which are presumed to be unique due to culture-specific customs and values, language, and incomplete assimilation into the prevailing culture, should prove invaluable (Scott 1983; Triana, Welsch, and Young 1984). Identification of the factors associated specifically with Hispanic businesses should accrue many benefits for these business owners (Bates and Furino 1985; Dadzie and Cho 1989; Triana, Welsch, and Young 1984) as well as their shareholders.

Research on Hispanic Business Owners

Research on minority entrepreneurs of small business in general, and on Hispanic business owners in particular, is extremely inadequate. Triana, Welsch, and Young (1984) were some of the first researchers to focus solely on Hispanic entrepreneurs. The researchers investigated Hispanic small business owners' personality characteristics and perceived business problems in relation to their information source preferences. Findings indicated a positive relationship between their openness to innovation and the use of professional, personal, and written information sources. There was also a positive relationship between locus of control and the use of professional sources. On the other hand, self-esteem was negatively related to participation in seminars. It was also found that those experiencing more financial problems tended to seek more varied types of information sources.

Dadzie and Cho (1989), focusing on minority entrepreneurs (including Hispanics), found that the influence of minority role models was significantly more important for firms in the early growth stage than for those that had grown to the point of gaining access to government markets. Feldman, Koberg, and Dean (1991) descriptively examined different paths to ownership among four minority groups (including Hispanics) and non-minority business owners. Compared to their non-minority counterparts, minority owners tended to place a much heavier emphasis on starting a business from scratch, to have a different orientation toward the kinds and sizes of businesses they undertook, to be more influenced by parents as role models, and to have worked in larger businesses prior to embarking on their entrepreneurial careers. …

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