Clout of Latina Entrepreneurs – it’s time for corporate America to say, ¿En qué la puedo servir?

The numbers speak for themselves and paint a very powerful picture: Latino women entrepreneurs are playing an increasingly prominent role in the Small Business boom that’s fueling today’s economy. What’s more, projections indicate this trend will continue unabated as Latinas have become the fastest growing Small Business owners in the U.S.

Despite being virtually neglected by government-sponsored small-business programs, and having their needs underserved by corporate programs targeting Hispanic Small Businesses, the Latina entrepreneur is a force to be reckoned with. She presents a formidable opportunity as she carves her path to the “American Dream,” facing her own specific needs and negotiating her own particular set of obstacles.

The numbers are simply staggering:
– 553,618, the number of businesses owned by Hispanic women
– $44.4 billion, the nationwide sales of these businesses in 2004
– 34.9, the percentage of all Hispanic-owned firms owned by women

In addition, the United States Hispanic Chamber of Commerce points out that:
– Hispanic women-owned firms employ 18.5% of the workers in all Hispanic-owned firms and generate 16.3% of the sales
– Latinas control 39 percent of the 1.4 million companies owned by minority women in the United States, which generate nearly $147 billion in sales
– Four in ten minority women-owned firms are owned by Latinas
– Between 1997 and 2004, the number of firms owned by Hispanic women increased by nearly 64 percent, to 553,618, and their combined revenue climbed by more than 62 percent, to $44.4 billion.

For additional data: http://www.ushcc.com/res-statistics.html>

These impressive achievements are the product of heroic resilience, as Latina business-owners have to juggle two roles: madre and empresaria as an ethnic minority in a male-dominated world. Most start this journey with less than $10,000 of their own money; many hold parallel jobs as they build their business and, for the most part, lack government and corporate support.

Fascinating insights and leverageable data are provided in the “The Spirit of Enterprise: Latina Entrepreneurs in the United States,” conducted by the National Foundation for Women Business Owners and sponsored by Wells Fargo. Released in September 2006, the report is one of several recent studies documenting the permeating presence of the Entrepreneurial Spirit among Latinas and placing our mothers, wives and daughters at the very center of the nation’s economic progress and well-being.

In terms of business type, according to the survey’s press release, “Respondents are in a wide variety of industries. Many more own firms in construction (10%); accounting, engineering and other professional services (10%); and manufacturing (9%) than in businesses such as hotels, restaurants and bars (4%).” In addition, “Fourteen percent (14%) of Latina entrepreneurs –compared to a similar 13% of all women business owners in the U.S.– are engaged in international trade.”

Regarding language, “Nearly two-thirds (63%) of the Latina entrepreneurs surveyed use English and Spanish in their business activities. Just over half (54%) of Latina entrepreneurs consider English their first language, 37% indicate that Spanish is their primary language, while at least 7% say they speak both languages equally.”

Latina business owners say they switch languages based on the type of interaction. A majority use primarily English in their business dealings with advisors, fellow business owners, customers, and employees.

As to drivers, “Latina entrepreneurs share many of the same motivations for entrepreneurship as all women business owners: to control their own destiny, improve their economic situation, achieve greater flexibility, or because of a change in their job situation.”

The report adds that like all women business owners, two-thirds (66%) of Latina entrepreneurs start and build their own business instead of inheriting or purchasing one.

Life can be both very tough and extremely satisfactory, according to the report, “Latina entrepreneurs share the same rewards and frustrations of business ownership with women of all ethnic backgrounds. What Latinas like best about business ownership includes being their own boss and having more flexibility and freedom. The downsides of being a business owner, according to the Latinas interviewed, include long hours and the burden of responsibility that comes from being employers.”

Compared to Caucasian and African-American female entrepreneurs, Latina Small Business owners have more dependent children, are older and with lower formal education levels.

It would be an understatement indeed to say that Latina-owned businesses survive despite all odds. They face capital shortages, owners lack business education and experience, and their very existence is threatened by the skyrocketing costs of health care insurance.

Some of these problems were highlighted by Congresswoman Nydia M. Velazquez, Chairwoman of the US House of Representatives Small Business Committee in a recent speech to the Latina Style Magazine Awards Conference.

Congresswoman Velazquez points out that health care premiums for Small Business owners have gone up by nearly 80 percent since 2000. “This is causing a serious problem for Latina business owners, who according to the National Council of La Raza, are the least likely of all women employers to offer health insurance.”

Financing is a particular challenge: “Latina businesses are struggling to access capital, and are receiving smaller loans in comparison to other small firms. The average SBA 7(a) loan size in 2005 was $157,000; yet the average for a Hispanic-owned firm was only $123,000.”

Everything indicates Latinas will continue to take on an even more prominent role in the economy. A Junior Achievement poll showed that some 79 percent of Latino teenagers want to start their own businesses, compared with 69 percent of non-Hispanic white teenagers. That means more Latina Small Business owners in the near future.

However, a survey of sites and advertisements targeting Hispanic Small Businesses showed males in a traditional dominant role, with a noticeable absence of programs targeting Latinas. Advertisements, for the most part, persist in portraying Latinas in traditional roles, reflecting existing stereotypes on the part of Clients and lack of vision on the agency’s side.

And yet a full range of channels – TV, Radio, Print, Mail and Web – is readily available to reach this important sub segment. Tests can be conducted, efforts can be measured, cost benchmarks can be established, as Directo Hispano has been able to do with other sub segments, like Hispanics over 45. You can view some of the work in the Directo Hispano website: http://www.directohispano.com/brand-direct-tv.html>

The business reality is unavoidable: The Latina entrepreneur landscapes are fertile grounds for a Customer Relationship Management program designed to start long-term relationships by meeting their unique needs. These needs include loans, information, know-how, technology and, for the most part, they remain unfulfilled. Meeting an unfulfilled need and getting rewarded for it is the essence of the free enterprise system. Great rewards await those with the foresight and courage to include the Latina Entrepreneur in their programs serving the Hispanic Small Business community.

By Carlos F. Torres,
Partner, Directo Hispano