Latina Entrepreneurs.

An Economic Force in the U.S.

Latina-owned firms are an integral part of the fabric of business in the United States. Many Hispanic women entrepreneurs were born in this country and own long-established businesses in a wide range of industries, according to a new survey conducted by the National Foundation for Women Business Owners (NFWBO) and sponsored by Wells Fargo & Company.

"Latina entrepreneurs are certainly not newcomers in the U.S.," noted Nina McLemore, NFWBO Chair and President of Regent Capital, in discussing the study, "The Spirit of Enterprise: Latina Entrepreneurs in the United States." "Those surveyed have owned their businesses for an average of 12 years. Two-thirds were born in this country and one-third are immigrants who have lived here for an average of 30 years."

Survey 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%).

"By documenting that Latina entrepreneurs are a growing economic force with unique characteristics, we are improving their opportunities for access to capital, technology and training," said Colleen Anderson, Executive Vice President of Premier Business Banking at Wells Fargo. "At Wells Fargo, we're trying to learn more about Latina-owned businesses by meeting with their owners face-to-face and by sponsoring studies like this."

Latina entrepreneurs are a rapidly-growing business segment. According to an earlier NFWBO report, "Trends Among Minority Women-Owned Firms," the 382,400 Latina-owned firms in the U.S. in 1996 generated sales of $67.3 billion - a 534% increase since 1987, compared to a 120% increase for all businesses. Despite this growth, the recent NFWBO/Wells Fargo survey shows that the share of Latina entrepreneurs with bank credit and the amount of capital they have has not increased significantly in the past two years.

Family and Heritage are important Factors

While Latina entrepreneurs interviewed report that they started their own businesses, they are more likely than women business owners of other ethnicities to describe their businesses as family run. Three-quarters (75%) of the participants in the NFWBO/Wells Fargo survey say that their immediate family - spouse, children or parents - is involved in their business.

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.

Typically, Latina business owners say they vary their language based on the type of interaction. A majority use primarily English in their business dealings with advisors, fellow business owners, customers, and employees. However, Latina entrepreneurs are involved in the Hispanic market and maintain ties to their heritage; more than one-third use Spanish or both languages with employees and customers.

In addition, Latinas are proud of their cultural heritage and background. Two-thirds (64%) of those surveyed say that their cultural heritage is an asset for them as business owners; just 16% say it is mostly a challenge, and 7% say it is both.

The first and second generation Latina entrepreneurs who were interviewed in the NFWBO/Wells Fargo survey-who comprise 57% of those surveyed - come from diverse regions, including Mexico (46%), Cuba (17%), South America (14%), the Caribbean (9%), and Central America (8%).

Start-Up Remains Virtually Unchanged

The Latina business owners interviewed for this survey started their firms with slightly more capital than all women business owners interviewed for a 1998 NFWBO survey, "Paths to Entrepreneurship." Just over half (54%) of Latina entrepreneurs surveyed started their firms with $10,000 or more, compared to 44% of all women business owners. One third (32%) of Latina entrepreneurs started their business with less than $10,000, compared to 44% of all women business owners.

Less than half (45%) of Latina women entrepreneurs in the study borrowed funds to start their businesses; most borrowed from commercial banks (35%) and family members besides spouses (23%); other sources were personal credit cards, friends, spouses, and refinanced homes.

The share of Latina entrepreneurs with bank credit is similar to two years ago and the amount of capital they have has not increased significantly. Just over half (54%) of Latina entrepreneurs have bank credit according to the latest NFWBO/Wells Fargo survey, compared to 50% in 1998.

The amount of bank capital carried by Latina business owners has not changed significantly over the past two years. In 1998, 24% of the Latinas surveyed had under $25,000 in capital available for use, and 24% had $100,000 or more. Today, 22% have under $25,000 and 29% have $100,000 or more.

The NFWBO/Wells Fargo survey, "The Spirit of Enterprise: Latina Entrepreneurs in the United States," revealed many similarities between Latina entrepreneurs and all women entrepreneurs, based on comparisons with past NFWBO research studies.

* 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;;

* Like all women business owners, two-thirds (66%) of Latina entrepreneurs come into business ownership by starting their businesses; far fewer of them purchase, inherit or acquire their business through gift or marriage;;

* 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;;

* 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..

"NFWBO's survey of my fellow Latina business owners captures the spirit of enterprise in this important business constituency," observed Sandra Hemandez Adams, President of Strategic Micro Partners and President Elect of the National Association of Women Business Owners. "It is empowering to see that Latina entrepreneurs are similar in many respect to all women business owners. It Is fulfilling to see how those surveyed consider their heritage and culture when conducting business."

Bruce Rosenthal is with the National Foundation of Women's Business Owners in Washington, D.C.