HispanicBusiness

California's Gross State Product totals $1.1 trillion annually, making it the eighth-largest economy in the world, far exceeding either New York or Texas. The state is also fertile ground for small businesses, with 2.6 million of them. The number of new small firms grows 12 percent a year. More than one-third of California's population is Hispanic, according to the state's Office of Economic Research.

Given the size and diversity of California's economy, it could rank first in the number of Hispanic-owned 8(a) businesses, Mr. Martin speculates. "We are second because there aren't enough Hispanic firms that apply for the 8(a) program. We need even more success stories to attract them," he says.

Virginia
Virginia is smaller than New York, Florida, and Illinois, but it ranks ahead of those states, primarily because of its strategic location adjacent to Washington, D.C.

Southeastern Virginia is home to 11 Naval bases and a half-dozen Air Force bases. Northern Virginia has some of the nation's largest federal facilities, including the Pentagon, CIA headquarters, and the Marine headquarters at Quantico.

"Proximity to the federal government is a key," says Jose Figueroa, CEO of Priority One Services Inc., an Alexandria-based provider of medical research. "It's easier to stay informed about initiatives and contracts."

The federal government dominates Virginia's economy, spending more than $50 billion a year there, according to the Virginia Economic Development Partnership. Virginia ranks third in the nation in per-capita federal outlays. It also registers as a business-friendly state, with a low corporate tax rate of 6 percent and one of the nation's lowest net costs for workers' compensation insurance.

Mr. Figueroa cites two other positive factors for Hispanic entrepreneurs: a regional Small Business Administration office that actively reaches out to minorities, and a growing cadre of Hispanic business people who network with each other and with government officials.

New Mexico
New Mexico's high ranking stems largely from the combination of a strong state economy and the presence of three unique federal facilities – Los Alamos and Sandia national laboratories and White Sands Missile Range. New Mexico also is close to other states with a heavy military presence, such as Texas and Colorado.

"We sit geographically in a very good place for federal procurement," says Elizabeth Pohl, CEO of Trinity Construction Enterprises, an Albuquerque-based company with revenues of $15 million.

Ms. Pohl notes that the state's business development organizations and most powerful politicians support minority business development. She says Republican Senator Pete Domenici, chairman of the Senate Budget Committee, is an avid fighter for small businesses and for keeping large employers in the state. She also gives credit to the Albuquerque Chamber of Commerce.

Filiberto Pacheco, CEO of PB Inc., an Albuquerque-based computer systems integrator with revenues of $7 million, cites another reason for the state's 8(a) success: "It is a matter of numbers. We don't have the population of other states but, relatively speaking, we have a lot of Hispanic entrepreneurs joining the program," he says.

The state's large research and scientific community includes a large population of engineers and scientists, a critical asset in a time of high-tech expansion. The state also has a huge Hispanic community, representing nearly 40 percent of the population. New Mexico and Hawaii are the only states where Anglos account for less than half of the population.