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Latina Entrepreneurs Creating Economic Change in the U.S.

Around the country, Latina-owned businesses are making unprecedented gains in economic development and adding a cultural style to the American enterprising spirit.

According to the Center for Women’s Business Research, Latinas control 39 percent of the 1.4 million companies owned by minority women in the U.S. which generate nearly $147 billion in sales. Four in ten minority women-owned firms are owned by Latinas in the U.S.

This boundless growth has had a significant impact particularly on states along the U.S. border. The increase in numbers of Latina-owned businesses between 1997 and 2002 was accompanied by increases in non-employer businesses along the border and therefore, overall growth in the numbers of Hispanic-owned businesses.

The states where Latina businesses comprise the greatest share of all women-owned firms are New Mexico (20 percent), Texas (18 percent), California (17 percent), Florida (16 percent), New York (14 percent), and Arizona (13 percent).

In Texas, New Mexico, Arizona and California, Latina-owned businesses saw a rapid rise in 2002, both in numbers of new establishments (266,872) and in receipts, which totaled $16.8 billion (more than half of the total $29.4 billion for all Latina-owned businesses in the U.S.)

The emergence of Latina-owned businesses may one day become a catalyst in reducing the rate of unemployment along the border which is higher than that posted for the nation. Here are the stories of Latinas who are making a great share in the U.S. economy.

Latina-owned businesses in Arizona are growing at a faster rate than the national average. Nationwide, the number of businesses owned by Latinas grew by 39 percent, to an estimated 470,344, in the five-year period that ended in 2002. That compares with about 9 percent growth for other businesses, according to the Center for Women’s Business Research, which draws its estimates from U.S. Census data.

In Arizona, the number of Latina-owned companies grew by 58.3 percent during that same time, to 14,538. And they generated nearly $726.9 million in sales from 1997 to 2002, up 10.6 percent.

A study conducted by the Salt River Project and the Hispanic Research Center, Arizona State University, estimated that Latina-owned businesses make up approximately 32 percent of all Hispanic-owned businesses in Arizona.

Rosa Cantor, president and CEO of Creative Human Resources Concepts, LLC (CHRC), is one of the entrepreneurial pillars in Arizona. Now on her 11th year in business, Cantor’s firm averages $11 million in annual revenues providing human resources services primarily to the aerospace and defense industry that include such clients as Boeing, TRW, and Talley Defense.
CHRC provides contract labor, regular staffing and executive placement that have not only met the technical and professional criteria, but that have gone through the rigorous security clearance and background checks required for some of her government contracts.

Professional, scientific and technical services such as Cantor’s firm provides constitutes 21 percent of Arizona’s businesses. “Our competitors are the giants in the industry,” says Cantor. “Because we’re smaller, we’re faster and able to make changes quickly.”

Like many other Latina business-owners, Cantor faced many of the start-up capital and financing obstacles when she started her business. “We had to use our own money initially and ultimately got a loan,” remembers Cantor. “In Arizona, the challenge most of the small business owners face is accessing capital.”

According to a national survey, “The Spirit of Enterprise: Latina Entrepreneurs in the U.S.,” 55 percent of those interviewed did not borrow any capital to start up their businesses and 23 percent said they borrowed from family members.

The share of Latina entrepreneurs with bank credit has not increased significantly. Just over half -54 percent- of Latina entrepreneurs have bank credit according to the latest NFWBO/Wells Fargo survey, compared to 50 percent in 1998.
While minorities account for 30 percent of the U.S. population, less than 2 percent of all venture and private equity funds are invested in minority companies, according to the National Association of Investment Companies.

As a result, the fastest growing sectors in business development and population growth have had the least access to the funding required to make their businesses grow rapidly.

Cantor is now trying to facilitate the process for small businesses to obtain capital by establishing a community bank, focused on small business and Latino-owned companies. “It’s the business-owner’s bank,” she says. One of two females on the board of directors, Cantor is a contributing founder for Sonoran Bank, the first privately held community bank in Arizona focusing on serving the Hispanic and the small business community markets.

Since it opened one year ago, Sonoran Bank has exceeded over 25 million dollars in total assets and exceeded $17 million in total deposits. The majority of the deposits and loans are Latino customers.

“Unlike large banks,” says Cantor, “We take the time and patience to educate the applicant and assist them in the process of being approved for the loan.”

As entrepreneurs, Hispanic Arizonans own more than 35,000 businesses that generate receipt of $4.3 billion, according to the DATOS 2006 Hispanic Market report. The majority of these are family owned.

“My son has been with my company for five years,” boasts Cantor. “My hope is that he can continue this legacy and continue providing the customer care we’re known for.”

Borrego’s business has concentrated on non-profit organizations and tapping into New Mexico’s artistic legacy. Herself an artist, Borrego blends her knowledge of art with her accounting skills to tap into the artistic community as her client base.
One of the most compelling features of Latina-owned businesses, according to the 2000 National Foundation for Women Business Owners (NFWBO), is the emphasis on “cultural capital” and that many of the Latina entrepreneurial activities are culturally dictated.

Borrego’s accounting practice certainly exemplifies this finding. With a flexible family schedule for her employees, one with child care responsibilities and the other with the role of taking care of her aging father, Borrego’s business stresses strong family values. She, too, takes off on Fridays to be with her children.

“As long as the work is done by deadlines,” she stresses.

For future business growth, Borrego is keeping her eye on the film industry. Since 2002, 40 films (including Into the West and North Country) have been shot in New Mexico, adding more than $500 million to the economy.

Latinas are now starting businesses in economic sectors that were once male-dominated. While more than half (58 percent) of all Latina-owned firms remain in the service sector, their greatest advances have been in non-traditional industries such as construction and communications. This is especially true in the U.S. border region. The greatest growth by industry in the number of Hispanic women-owned firms from 1997 to 2004 is in the transportation, communications, and public utilities industry with 72.5 percent growth; followed by services (62.4 percent) and construction (50 percent). Arcilia Acosta, president and CEO of CARCON Industries and Construction, is an innovative force in the Texas construction boom where the expansion of rail lines and new Dallas schools is driving up the public sector construction activity. According to Cushman and Wakefield, office construction in Dallas-Fort Worth, where Acosta’s firm is located, has jumped from 250,000 square feet at the end of 2003 to 4.4 million square feet at the end of 2005. “You have to love this industry because it’s absolutely tough,” says Acosta. “It’s a volatile industry vulnerable to weather and economic downturns. If there is a boom or a downturn, we get hit fast.” According to the Census Bureau’s 2002 Business survey, Hispanics have the most significant share of ownership in construction firms among the major minority groups. Eight percent of all construction firms nationally are owned by Hispanics, and 7.5 percent of all women-owned construction firms are headed by Latinas.

Arcilia Acosta Dallas, Texas Breaking into Non-Traditional Sectors

“If you want to know where the future growth is in your company (in Texas), follow transportation and construction,” advises Acosta. Following the growth trends and forecasting their impact on her business has catapulted Acosta into several profitable ventures.
When Acosta noticed a void of women-owned geotechnical engineering companies in Texas several years ago, she jumped at the opportunity and founded Southwestern Testing Laboratories (STL) Engineers, a full service consulting firm specializing in geotechnical engineering, construction materials testing and environmental consulting.

“We’re doing awesome,” says Acosta. “I can’t tell you how fast that company grew.”

Acosta’s projections about transportation trends in Texas led her to relentlessly pursue light rail opportunities. She is now a partner in a joint effort valued at $700 million to build the largest light rail project in the country. Acosta is also partner to the largest community college bond program worth $470 million dollars.

Construction businesses, like many other sectors where Latinas are becoming the economic engines, are affected by external factors stemming from public policy and social issues. As chairman of the Texas Association of Mexican-American Chambers of Commerce representing 26 Texas chambers and 18,000 business owners, Acosta is also vigilant and involved in changing social and economic policies that can affect the growth of Latino businesses.

“A lot of our state’s economy counts on being inclusive with people of color,” says Acosta, who recently participated in a recent coalition that brought together significant groups to meet with political leaders. “We asked them why they did not vote for immigration reform.”

For the most part, Acosta believes that Texas governors have been friendly to minorities and provided state-wide government programs such as Historically Underutilized Business (HUB) to promote economic development among minority business owners.

Hispanic business like Acosta’s is injecting economic vitality into Texas with significant financial results. The pool of Hispanic businesses in Texas has produced over $39.5 billion in sales with payrolls that generated over $5.7 billion.

According to a report from “Nuestro Futuro: Hispanic Teens in Their Own Words” by Cheskin, one in five teens in the U.S. is Hispanic, and this group is growing much faster than any other segment. Hispanic youth account for more than 34 percent of the total U.S. Hispanic population and by 2020 Hispanic youth will make up 23 percent of U.S. youth.

“I’m 29 years old and hanging out with 16-year-old teens,” she says. “That’s what keeps me abreast of the new music or dances. Trends are always changing, but you’re not going to know unless you’re there with the kids.”

Through her business, she conducts grassroots and relationship marketing, launches products and conducts outreach through street teams. “We put a face behind the brand,” says Pinedo.

Pinedo has grown MP Urban Marketing from one client (Coca-Cola) to an impressive roster of major consumer companies such as Universal Music, Macy’s, Canterbury Schweppes, The Los Angeles Dodgers and Pollo Campero, Novamex (Jarritos).

For most Latina entrepreneurs, family involvement plays a significant role in business. A survey by the National Foundation for Women Business Owners (NFWBO) reported some intriguing demographic and cultural factors influencing Latina entrepreneurs. Seventy five percent of Latinas indicated that family members help run their businesses, compared to Native American women (66 percent); white women (71 percent), African American women (55 percent) and Asian American women (64 percent).

Latina entrepreneurs look to family as a basis of a support system that includes financial/ banking advice, managerial counsel, expansion planning, and overall entrepreneurial decision-making.Pinedo is no exception. When she was trying to decide on her company name, it was her sister who helped her create the MP Urban Marketing name. To help Pinedo launch her business, Pinedo’s mother took on many roles in the beginning including warehouse supervisor overseeing the truckloads of client product. Today, her brother-in-law, her sister, and brother who is a DJ also work for her.

“They (the family) will be there for you,” says Pinedo.

Latina-owned businesses are essential to the health of the nation’s economy and in particular to the Western states along the U.S. – Mexico border. Latinas are changing the face of many economic sectors as well as paving financial opportunities for other small businesses and communities.

By Myrna Gutierrez