Latina Entrepreneurs Drive US Economy Despite Barriers: Unlocking Their Full Potential

Latinas are making a significant impact in the US economy, starting 2.1 million businesses and employing 873,000 people. Between 2019 and 2024, Latina-owned businesses experienced remarkable growth with a 61.7% surge in revenue and a near 20% increase in employment. However, these powerful Latina entrepreneurs often face hurdles due to cultural and language barriers. This has resulted in their average revenue falling behind that of companies initiated by white women. If Latina business owners had the right resources like access to capital, training, mentorship, and networks, they could unlock their full potential and contribute an additional $1.7 trillion to the economy.

Legal and Financial Steps for Latina Entrepreneurs

Creating a sustainable business requires Latina entrepreneurs to consider legal and financial aspects together. Your legal structure should provide a framework that supports your financial goals. With the right setup, you can protect personal assets, clearly define your compensation, and even access tax advantages and funding opportunities. Combining this with robust financial systems offers a sound foundation for growth and peace of mind. It’s not just about compliance; it’s about confidence. An aligned legal and financial world can help you build generational wealth with strategy and intention.

Establishing a Legal Foundation

Every business owner, particularly first-gen and Latina founders, must understand the importance of a legal foundation. Here are three recommendations to get started.

Choosing the right entity

Many entrepreneurs begin as sole proprietors as it seems simpler and less costly. However, it carries a trade-off risk: if anything goes wrong, your personal assets could be at stake. Forming an LLC or corporation creates a boundary between you and your business. It also determines how you’ll be taxed, which is why consulting your attorney and financial team early is smart.

Protecting your brand

Your brand name, logo, and tagline are significant business assets. Registering a trademark ensures your ownership and prevents others from profiting off your brand’s identity. For Latina-owned businesses, where culture and community are often central to the brand, early protection of this identity can make a significant difference.

Contracts

While trust is important, it’s tempting to rely solely on it, especially when collaborating with friends, family, or community referrals. However, clear expectations and responsibilities should be defined from the start to prevent strained relationships or business derailment. A solid contract doesn’t merely protect you if things go south; it provides clarity for both parties.

Building your Financial Foundation

Setting up separate accounts for your business and personal finances is the first step in building your financial foundation. Not only does this help you stay organized, but it also presents your company as a professional entity. Understanding your cash flow and consistently paying yourself reinforces the value of your work. Eventually, this builds stability, confidence, and sustainability. Lastly, think beyond today and build for your future. Retirement accounts, like a SEP IRA, are tools for your wealth. Ignoring taxes, mixing personal expenses with business funds, or skipping savings “until things slow down” are red flags to avoid.

Building your business and wealth doesn’t have to happen all at once. For Latina founders, every small, intentional step counts towards establishing a solid foundation and boosting confidence. Book a call with an Ellevest financial planner for more advice and visit legalmigalaw.com to learn how to protect your brand, services, products, and content.