PHOENIX (By Yvette Armendariz, Arizona
Republic) October 2, 2005 12:00
A new study of Hispanic entrepreneurs chips away at
stereotypes about the kinds of businesses they run and the challenges
they face.
The SRP Arizona Hispanic-owned Business Study 2005 affirms that Hispanic
entrepreneurs aren't just tortilla makers, restaurant owners and
contractors.
In fact, they are much like others in the general business market,
operating manufacturing shops and service companies of all kinds. They
generally view themselves as having the same challenges as non-minority
entrepreneurs. Few consider discrimination and language barriers as
problems.
Forty-three percent run service companies, similar to the most recent
comparable national and statewide figures. The number of construction,
mining and manufacturing companies also closely mirror general market
data, according to Salt River Project's study.
Hispanic entrepreneurs, however, are more likely to operate a retail
store and less likely to run companies that deal in wholesale trade,
transportation, communications and utilities or finance, insurance and
real estate.
Meanwhile, 41 percent said they don't have or don't know of any
challenges unique to them as Hispanics. Just 12 percent reported some
kind of discrimination, and 7 percent pointed to language barriers.
"Hispanic businesses don't want to be considered anything other than a
business," said Harry Garewal, president and chief executive officer of
the Arizona Hispanic Chamber of Commerce.
That's why few will point to cultural issues, he said.
First snapshot
Among the findings:• While 18 percent of Arizona Hispanic-owned businesses generated revenues of less than $50,000, 6 percent reported annual revenue exceeding $50 million.
• 62 percent are owned by men, 38 percent by women.
• 12 percent conduct business internationally. However, even those indicated on average that 65 percent of their revenues come from within Arizona.
• One in three Hispanic businesses is started by an immigrant.
• Thirty-three percent of business owners are college graduates or higher. That compares with 30 percent of Hispanic business owners nationally and 43 percent of the total business population.
"One of the things we're trying to do is establish a baseline and track trends, which, by the way, no Hispanic business study has done before," said Max Gonzales, SRP's Hispanic segment manager for marketing and strategic planning.
New fields
Garewal said Hispanics are making strides in new fields. He points to a growing group of insurance and real estate agents, as well as accountants, financial planners, computer technicians and jewelers.But numbers remain low in those areas, and Garewal believes the cost and time involved getting proper licenses and building a client base may be factors.
"Many of us don't have a (financial) safety net" to develop those businesses, he said. A Federal Reserve study from 1998 put Hispanic net worth at $3,000 compared with $81,700 for a White family.
Frank Brabec, a Hispanic with his own insurance agency, said he went into it because of the long-term opportunity. But making money, he said, takes time.
"I've been in business two years, and I have yet to see a profit," said Brabec, of Frank Brabec Insurance Agency.
Business is growing, but that also means he's investing more in staff, equipment and office space. "If it were not for some savings, then I would be out of business."
Low overhead
Many look to businesses that they don't perceive as needing a lot of startup money."Sometimes it's easier to purchase product and find a little space," Garewal said. "Many start (retail ventures) at the park and swap, so the only outlay is merchandise."
That's how Botas Juarez got its start more than 15 years ago.
Owner Miguel Peña began selling custom boots and hats on the side after a construction injury. He envisioned starting a drywall company one day. Instead, he hit swap meets and friends. Success on that level gave him the will to open a tiny store in 1989. Today with his wife, Hilda, he operates stores in south Phoenix and in Mesa.
Lucy Acedo tested interest in an antique shop by putting on frequent garage sales to sell her treasures.
"I saw that it would sell," said Acedo, 64, who runs Rustic Furniture, Antiques & Collectibles in Douglas. "So we opened the shop and figured we're going to try it."
She invested between $300 and $500 to acquire collectible dishes and knick-knacks at estate and garage sales. And she's managed to keep the business running for 4 1/2 years.
Top concerns
While many start small to test viability, access to capital is not listed as Hispanic entrepreneurs' top concern.They deal with money needs by going to family and friends. What they are concerned about are competition, personnel issues and sales/ marketing.
Mesa entrepreneur April Murillo Stremming has found a huge challenge in the fierceness of competition. She'd find competitors stealing her ideas after making a pitch to a client.
"It's difficult to get your foot in the door," said Murillo Stremming, who runs the promotional products company April's Images and Production.
But she's making inroads by staying involved in a variety of business groups, including the Arizona Hispanic Chamber of Commerce and Grand Canyon Minority Supplier Development Council.
Proving a point
While a large number in the survey indicated few unique challenges of being Hispanic, some are vocal about noting differences.Nereyda Lopez-Bowden, co-owner of public relations company Molina/Lopez, points out one challenge of being Hispanic is assumptions from clients about their expertise.
In their case, she said, they have to prove they can do more than just Hispanic marketing.
Similarly, Ernesto Sanchez of Phoenix-based Micro Business Technology has had to prove he could wire computers because he didn't fit their image of a technician or computer engineer.
"To convince someone that I know what I know how to do, I've had to do some jobs for free," Sanchez said.
Sanchez, an immigrant from El Salvador, now gets most of his work from referrals.
Pam Valdez recalls her father starting Valdez Transfer because he was offered to buy what used to be Tempe Moving & Storage 50 years ago for about $10,000. It was a large sum at the time, but Ted Valdez saw an opportunity to build a good life for his family, she said.
He's since built a multimillion-dollar transportation and distribution business.
"Dad has always been a visionary," she said. "How he's done it is with will, know-how and fortitude."
yvette.armendariz@arizonarepublic.com
