What You Need To Know About Latino Entrepreneurs
A recent study by the Stanford Latino Entrepreneurship Initiative (SLEI) -- a collaboration between the Stanford Business School and the Latino Business Action Network (LBAN) -- reported three facts that help to understand the narrative about Latino entrepreneurs, reported Forbes this week.
First: Integration. Latino Owned Business (LOBs) are located all over the U.S., with 75 percent in majority non-Latino neighborhoods serving mostly non-Latino customers.” This runs counter to the narrative that the economic impact of LOBs might be largely limited to Latino communities.
The reality of LOB integration not only busts the myth of the barrio as the only place of Latino commerce, but also the myth that Latinos only create barrio businesses. Following on last year’s study, SLEI’s 2016 study notes LOBs “are distributed across a variety of industries and most concentrated in industries with the highest growth rate.” For emphasis, the report added: “Less than one-quarter of Latino firms are in construction or manufacturing and even fewer are in leisure or hospitality, combating common stereotypes of Latinos owning mostly restaurants and construction-related firms.”
Second: difficulties to find funding. Despite their growing numbers, and their integration into mixed communities, LOBs are not as likely as non-Latino firms to take external funding -- e.g., bank loans and equity investment -- at either the startup or growth phases. It’s a challenge that might need to be addressed in a number of ways, including educating LOBs on how their better-scaled peers are doing business.
Third: Immigration. Among the better-scaled peers in the LOB community are immigrant business owners. Close to half of LOBs that are already scaling are led by Latino immigrants.
As reported in Forbes.