Starting a small business is harder for Latinos, women

Fabiola Giguere has been in the cleaning business for the past 33 years. It’s not an easy task for anyone, as the Small Business Administration estimates that two-thirds of new businesses don’t live past their tenth birthday.

However, the number is even more impressive when you consider that Guigere immigrated to East Haven in 1989 to escape terrorism by a Peruvian militia group known as Sendero Luminoso. Three years later, she started a cleaning company, Limpex, in Hamden.

As the business flourished, Giguere began pursuing her passion through her own jewelry brand, Achiq Designs. Named after the word “Bright” in Quechua, Achiq Designs has been in business at 1081 South Main St for the past five years.

Giguere plans to expand her business to a former Wells Fargo branch in downtown Wallingford.

“It’s going to be an open concept,” she said. “I had a great time.”

However, Giguere’s success is the exception to the norm, as women and Latinos are more likely to be workers than business owners.

In Connecticut, about 16 percent of workers are Hispanic, but only 9 percent of business owners are Hispanic, according to an SBA report. The report also found that about 22 percent of workers are minorities, but only 12 percent of business owners.

The SBA found a large disparity for women, who make up 48 percent of the workforce but only 41 percent of business owners.

This gap is especially relevant for New Haven County, where small businesses account for a little over half of the county’s employment: higher than the national and state average, according to an analysis of 2019 Census data log.

To address these disparities, the state announced two new programs this summer — the Connecticut Small Business Promotion Fund and the Connecticut Future Fund. Both are designed to provide resources for women and minority-owned small businesses.

However, despite the new initiatives, many minorities do not have a business background or access to the expertise needed to start a business.

Colombian Nelson Marchan has spent the past nine years as a consultant at the Connecticut Small Business Development Center and has worked with many Latino businesses.

He explained that the center can provide free resources for those looking to start their own business, even if they don’t have a business degree.

“We want our customers to make more money because it’s good for the economy,” he said. “If this family can make a better decision, that’s an amazing gift to our community.”

Looking back on his work, Marchan says his three most successful clients are women.The common thread is that all three have experience in their respective industries and have completed the paperwork required to get the loan

Marchan explained that most lenders will require applicants to provide 20% of the capital needed to start a business before a bank approves a business loan. Banks also require technical documents such as business plans, financial forecasts and market research, Marchan said.

“The numbers have to be realistic because if they’re not, then it’s a no-win situation,” he said.

Because of the strict requirements, Marchan said applicants may be inclined to approach lenders with more lenient requirements.

However, looser requirements often mean that loans are seen as riskier investments, leading to higher interest rates on loans.

He also added that poor English proficiency, low credit scores or a lack of collateral could also prevent Latinos from getting loans.

In addition to these issues, women’s entrepreneurship faces other barriers.

“Most of the people who decide who gets loans are not women,” said Joann Goulbin of the Connecticut Women’s Business Development Council. “Access to funding remains the biggest hurdle for women who are starting, trying to start or grow a business,” she said in a phone interview.

The council offers many opportunities for women business owners, including consulting, grants, loans and networking. The council focuses on minority and low-income customers, as the council reports that 48 percent of its customers are minority businesses.

As Connecticut’s Latino population continues to grow, Gulbin explained, the council hired Spanish-speaking business consultants and program managers to make their website available in Spanish and offer bilingual workshops.

Gulbin also pointed to a new program that has partnered with the Connecticut Office of Early Childhood to develop a range of business development services for home and central child care providers.

One in five child care workers in Connecticut is a Hispanic woman, according to 2018 Census estimates. That number was higher in Meriden, where one in four childcare workers is a Hispanic woman.

“A large percentage of child care providers speak Spanish,” Goulbin said. “In order to really do our best to serve them, we need to offer more Spanish-speaking services.”

Gloria Montoya of Meriden recently joined the committee. She applied and participated in many workshops.

Montoya’s business, my little world, is fine…very little. She is the only employee looking after six preschool children. Montoya immigrated from Peru in 1999 and started providing home childcare in 2009. She said the children were of all ages and ethnicities, but she spoke to them in her native Spanish.

“Children are like sponges and can learn many languages, even if they don’t speak them,” she said in Spanish. “Children will decide what language they speak or if they want to speak both, but they already have the knowledge.”

Montoya, who holds an associate degree in child development from Middlesex Community College, is keen to discuss early childhood education, but admits that bookkeeping is not her strong suit.

“I know a lot about what a business is and how to run it, but all the bookkeeping is left to my accountant,” she said. “them [the council] Gave me a lot of guidance. “

Montoya also received a tech grant during the pandemic and funding to convert her rugs to hardwood floors to provide better care for children with allergies.

In addition to being unable to obtain loans, many Latino-owned businesses struggle to operate long-term.

“I think sometimes a lack of planning forces companies, Latino companies, to fail,” Malkan said.

For long-term success, Marchan stresses the importance of having a sound business plan — especially when new business owners don’t have to apply for a loan. He said many first-time business owners are so immersed in their ideas that they have no idea how their projects will work in the future. “Dreams are beautiful, but sometimes reality replaces dreams,” he said. “If the business isn’t growing and you want to keep spending money, that’s not good.”

“You have to do your research”

When Giguere first opened Limpex, she remembers taking advice from SCORE, an SBA-backed nonprofit that matches business mentors with potential business owners. “Every time you open something, you have to do your research,” she said.

Giguere holds a Bachelor of Business Administration from Albertus Magnus College. However, despite her business background, Giguere recalls that the SBA helped Limpiex become an 8(a) certified company.

According to the government, 8(a) certification is a nine-year program designed to help companies owned and controlled by socially and economically disadvantaged individuals. For Guiguiere, this means Limpex can compete with larger companies for contracts reserved exclusively for 8(a) business.

Guigiere encourages other business owners to take advantage of programs such as SCORE and 8(a). A few years ago, Gugiere said she returned to SCORE to teach a seminar on how to start a cleaning business.

“Starting a business can be a little scary. But once you have the blueprint, it definitely gets easier,” she said.

Source link