The early 1980s ushered in the Reagan administration, MTV, and a new era for Hispanic entrepreneurship.
In 1982, Hispanic Business magazine, itself only three years old, set out to map the growth and newfound maturity of the U.S. Hispanic marketplace – a sector largely ignored by the mainstream business media. Its tool of choice? A list of the 500 biggest companies.
"The Hispanic Business 500® has brought legitimacy to Hispanic enterprise as a whole," recalls Jesus Chavarria, Hispanic Business magazine's founder, editor, and publisher. "When one reviews the 500, you can't avoid the impression that there's breadth and depth to the Hispanic enterprise marketplace."
Hispanic Business magazine set out to do several things with the annual directory. First, it would take the pulse of emerging Hispanic-owned firms. Secondly, it would supply Fortune 500 companies and federal procurement agencies with a list of Hispanic companies for potential business partnerships. And, lastly, the directory would provide readers with a sophisticated measurement of the growth of Hispanic-led companies and specific industries.
But it proved a Herculean effort for the small magazine, and that first 500 wasn't actually a list of 500 companies, but 400. The initial plan for the directory was to list 500 companies, but the task was much too large to complete in time for publication.
Assembling a list of the country's largest Hispanic-owned enterprises began with an exhaustive advertising and direct mail campaign and hundreds of telephone calls. Researchers painstakingly combed through a file containing more than 100,000 companies, whittling it down to 400 with reported revenues of $1 million a year or more.
Hispanic Business also convinced private business owners to release revenue figures publicly, something many had never done before. A first listing of 400 Hispanic companies in 1982 did not include revenues; the directory as we now know it debuted in June 1983.
"As I got more and more into their stories, I had to persuade them to disclose their numbers," Mr. Chavarria says of the companies. Eventually, more than 90 percent of the firms contacted agreed to participate.
In 1990, Hispanic Business began using line 1(c) of the U.S. Income Tax Return for a Corporation as the standard measurement of a company's revenues. This change resulted in much lower revenue figures for real estate brokerages, ad agencies, and financial institutions. Today, all financial information must be certified by the company's chief executive or chief financial officer.
Collecting data from privately held companies, which account for more than 95 percent of the Hispanic Business 500, remains a challenge.
"In the Fortune 500, all the data is publicly available since it is based on U.S. incorporated companies that have filed public financial statements with a government agency like the Securities and Exchange Commission," explains Juan Solana, chief economist at Hispanic Business magazine. "In our case it's just the opposite: Most of the companies are privately held and are not required to file public financial statements, only their private tax returns. They don't have to disclose those figures, but they do it because it's a relationship we have been building for 25 years."
The disclosure pays dividends for those firms that do participate.
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