By any measure, 2001 stands out as an unusual year for business. During this historic shift from peace dividend to war economy, from expansion to recession, the Hispanic Business® 500 continued its impressive course of double-digit growth. Revenues for the 500 largest Hispanic-owned companies in the nation increased 10.9 percent to $23.49 billion (see chart). In contrast, the national GDP grew 3.4 percent in 2001, down from 6.5 percent the previous year, and revenues for the Fortune 500 grew only 3 percent.
So how did the Hispanic Business 500 hold their own, and even prosper, during the downturn?
Part of the answer lies in the composition of the 500 itself. Economic contraction occurred mainly in business investment and the capital goods sector, while consumer-oriented sectors suffered less. Among the 500, wholesalers and retailers report the highest revenue percentage growth, at 33.6 and 17.4 percent, respectively. Construction, automotive, and transportation also show substantial growth. The business-heavy finance sector contracted by 25.3 percent (see table, “Sector Composition & Performance”). The service sector, which includes both business and personal services, averaged a 4.4 percent growth rate. Clearly, the consumer segments on the list helped counterbalance losses among B2B sectors.
According to the Bank One Economic Outlook Center at Arizona State University, automotive purchases ranked among the strongest categories of consumer spending during the slump. Seven of the top 20 companies on the Hispanic Business 500 sell cars, and these giant dealerships increased their sales by $544.62 million in 2001. Burt Automotive – the number 1 company on the directory, with revenues of $1.49 billion – accounts for more than half of the gains ($260 million). Average revenues for all auto dealers on the Hispanic Business 500 rose 23.5 percent last year (see table, “Average Company Revenue, by Sector”).
Hispanic geographical concentration also played well during this recession. Data from the Bank One Center show that the states that suffered least from the slowdown include New Mexico (ranked sixth among the 50 states), Florida (16), New Jersey (17), and California (23). On the Hispanic Business 500, perennial leader California again edged Florida for most companies on the list, while the Sunshine State won out for revenue share (see table, “Top 10 States”). Florida accounted for $8.1 billion, or 34.6 percent of all revenues for the Hispanic Business 500. The Florida companies averaged $68.9 million in sales – the highest per-state average in the country, with the exception of Colorado, which benefited from the presence of Burt Automotive.
In addition to the external factors driving their growth, the Hispanic Business 500 have the advantage of seasoned management teams. A difficult-to-quantify asset, management expertise comes to the fore in hard times. Our coverage of this year’s 500 highlights the value
of CEOs’ contributions by focusing on the functions of top management. The one-page profiles following the Hispanic Business 500 directory examine the “best practices” in seven areas: strategic planning, sales & marketing, finance, human resources, operations, communications, and technology. The lessons of successful Hispanic Business 500 CEOs apply to thousands of Hispanic firms struggling with the same challenges. Just as top Hispanic managers benchmark to improve company performance (see article, “Best of the Best”), the Hispanic Business 500 allows readers to compare managerial notes with the community’s entrepreneurial leaders.
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