Latina-Owned Businesses Are A Fast-Growing Sector
Many Latinas living in the United States have become so adept at managing a household and professional life that starting a business of their own is almost part of a natural progression.
This is perhaps why a number of agents working in the Hispanic market have in recent years noticed a sharp increase in Latina-owned businesses.
There are three categories feeding into this phenomenon says Robert Bard, president of LatinaStyle magazine.
One is the Latina professional who does not fear leaving the corporate world for her own operation once she “hits the glass ceiling,” he says.
Another group entering the business world with increasing frequency is the older Latina generation, which traditionally stayed home with their children, Bard says.
“Once the kids were gone, a lot of these women who are 50 and older founded small businesses stemming from hobbies and interests that took off,” he says.
A third group is Latina women who start a small business in the home and eventually find a niche, Bard says.
Once they become successful, they rent an office, hire staff and become part of the mainstream business world.
The operations Latinas begin range from the traditional, including consulting, to the nontraditional, such as auto dealerships, hotels and construction companies, Bard says.
The biggest impediment to the start-up of minority-owned businesses is that banks often rebuff minorities seeking credit lines, he says. But Latinas seldom let this stop them.
“You will find they are starting their businesses with credit cards, by families pulling money together, or they take out mortgages,” Bard says.
Some use personal savings to finance the start-up of a business. Thats how Tina Cordova 11 years ago started Queston Construction Inc. in Albuquerque, N.M.
With $5,000 and “just me and a couple of guys,” Cordova says that initial investment ballooned to more than $50,000 in sales her first year in business, and to three and four times that amount in subsequent years. “It continues to grow rapidly from there,” she adds.
With an eye toward minimizing risk, Cordova financed growth with company profits rather than loans from a bank.
Although she had a low-risk business plan in place, when seeking financing for a company vehicle she initially had been turned down by a number of banks.
“The financial services industry doesnt look at statistics,” Cordova says. Latinas “run and operate successful businesses, rarely fail, pay back our loans on time and were basically very financially astute.
“Even though all those statistics ring true, the financial services industry still looks at us as though were a big risk, so theres really a disconnect there.”
But, the best-laid plans dont always work, and Latina-owned businesses can and do at times fail. However, the financial services industry should know that Latinas pay back their debts whether their ventures succeed or not, Leticia Herrera says.
Herrera began selling Spanish art 11 years ago after studying business administration. When that venture went bankrupt about seven years ago, Herrera was advised to file for Chapter 11. She chose instead to pay her remaining debt.
“Theres no such thing as a business that makes it without failure,” Herrera says. “The experience forced me to go to uncharted waters.”
Uncharted waters included the Chicago public school system. A friend asked Herrera to recommend a cleaning service for its main headquarters. When the service she recommended backed out at the last minute, Herrera took on the job herself.
When the school system continued to offer Herrera cleaning assignments, she decided to begin a new venture and started ECI Inc., in Chicago. She soon learned the cleaning industry is a competitive market with a relatively small profit margin, so Herrera found a niche.
ECI now does stone restoration and window installation for museums, theaters and lobbies of professional buildings.
Despite Herreras business acumen and zeal, financing had been difficult to come by.
She says that with the help of a guarantee from the U.S. Small Business Association, she was approved for a loan by a bank, “after three (banks) turned me down and one told me to get a sugar daddy.”
The financial services industry should understand that Latina-owned businesses have a near-perfect success rate, Herrera says.
“Most Latina business owners are very organized, most finance their businesses with their own money,” she says. “So when someone does assist us, were so thankful. Even when I went bankrupt I paid everything back.”
Reproduced from National Underwriter Life & Health/Financial Services Edition, January 14, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.