Family and Community are the Greatest Motivators for Hispanics in Pursuing the American Dream of Entrepreneurship
MassMutual’s National Study Reveals Contradictions in Strong Values and Lack of Action among Hispanic Business Owners that Lead to Gaps in Fiscal Fitness
Aug 9, 2011
(Springfield, MA) - According to the U.S. Census, Hispanic-owned businesses are growing at double the national rate. While Hispanics are leading the way in this country as entrepreneurs, a new study reveals contradictions and gaps in Hispanic business owners’ fiscal knowledge and usage of tools available to them to help them create a more solid future for themselves, putting achievement of their “American Dream” at risk.
Massachusetts Mutual Life Insurance Company’s (MassMutual) “Business Owner Financial Wellness Study”* is a comprehensive review of multicultural business owners’ dreams, opinions and overall financial health. Growing at double the national rate, the study found that 89 percent of Hispanic entrepreneurs started their business to provide financially for their family vs. 77 percent of the general population and 31 percent wanted to provide jobs for other family members (versus 19 percent generally). Seventy percent of Hispanic business owners plan to pass their business on to family members vs. 54 percent of the general population. And yet only 1 in 4 Hispanic entrepreneurs have a succession plan.
The study’s Hispanic entrepreneur findings were unveiled at the Association of Latino Professionals in Finance and Accounting’s (ALPFA) national convention today. Researchers surveyed Hispanics, along with Caucasian, African American and Asian business owners. The study’s look at Hispanic entrepreneurs is part of MassMutual’s Fiscal Fitness Initiative created to arm Latinos with the information and tools they need to improve their fiscal health.
“Latino business owners report to a higher degree that providing for their families is the strongest driver for going into business. Also, Hispanics’ definition of family is quite broad, meaning they have more people counting on them,” said Chris Mendoza, assistant vice president of multicultural markets at MassMutual. Yet they’re not planning what they need to do in order to help protect their families and businesses. This is especially surprising when you consider that 55 percent of Hispanic entrepreneurs vs. 35 percent of the general population report a major reason why they created their business was to have something to pass on to their children.”
The research shows that Hispanics want control over their personal finances, yet three in 10 say it is all they can do to keep up with everyday business expenses, much less think about the future. This leads to real concerns among respondents related to their financial situation both at home and at their businesses. These challenges are even greater for those without a higher education and limited English-language skills.
“As an organization that empowers future Hispanic leaders in all aspects of finance, our members will be on the front line of providing Hispanic entrepreneurs with the tools and information they need to safeguard their future security,” said Manny Espinoza, CEO for ALPFA. “It is our responsibility as business leaders to examine solutions to the disparity of knowledge, confidence and usage of financial services. We’re pleased at MassMutual’s leadership in shedding light on this issue and exploring solutions.”
MassMutual has collaborated with ALPFA to help the non-profit organization achieve its mission of expanding Latino leadership in the global workforce. ALPFA is a natural partner for MassMutual as the organization works with its members to expand their skills and knowledge they need to serve Latino and the general population.
“Latinos understood the meaning of the “American Dream” long before the term was coined,” said Mendoza. “As businesses owners, they put incredible pressure on their shoulders to succeed, not just for themselves, but for the good of their families. The good news is they actually know to whom they want to transition their businesses, as part of their dream in providing for their families – they just need to understand the advantages of having a formal succession plan, the information and tools to help improve their ability to achieve that dream,” he concluded.
The collaboration with ALPFA is a key component of MassMutual’s Hispanic Fiscal Fitness Initiative, which includes partnerships with Latino non-profit business organizations across the country to help Hispanic business owners and professionals improve their financial health. MassMutual has commissioned research on Latinos’ fiscal health in Houston, San Antonio and Fort Lauderdale. The research unveiled today represents its first comprehensive analysis of Latino business owners at a national level.
The research was conducted by GfK Custom Research North America for Massachusetts Mutual Life Insurance Company (MassMutual) via telephone interviews administered to 916 general population and 154 Hispanic business owners March 28 – May 20, 2011.
Businesses were required to meet the following criteria:
- Have 500 or fewer employees
- 2010 total sales or revenue of $50,000 or more
- Been in business at least 1 year
The sampling margin of error for this study is +/- 3.3 percentage points when looking at the results for Total General Population. It is +/- 8 percentage points when looking at Hispanic results. These are at the 95% confidence level.
Founded in 1851, MassMutual is a leading mutual life insurance company that is run for the benefit of its members and participating policyholders. The company has a long history of financial strength and strong performance, and although dividends are not guaranteed, MassMutual has paid dividends to eligible participating policyholders every year since the 1860s. With whole life insurance as its foundation, MassMutual provides products to help meet the financial needs of clients, such as life insurance, disability income insurance, long term care insurance, retirement/401(k) plan services, and annuities. In addition, the company’s strong and growing network of financial professionals helps clients make good financial decisions for the long-term.
MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliated companies and sales representatives. MassMutual is headquartered in Springfield, Massachusetts and its major affiliates include: Babson Capital Management LLC; Baring Asset Management Limited; Cornerstone Real Estate Advisers LLC; The First Mercantile Trust Company; MassMutual International LLC; MML Investors Services, LLC, Member FINRA and SIPC; OppenheimerFunds, Inc.; and The MassMutual Trust Company, FSB.