Ryan Olson
As we celebrate Hispanic Heritage Month this year, it’s a good time to recognize the many contributions of Hispanic small-business owners. And there truly are many.
According to the “2021 LDC U.S. Latino GDP Report,” Latinos contributed $2.7 trillion in the U.S., equivalent to the seventh-largest economy in the world, and they’re growing 57 percent faster than the U.S. economy overall. From 2010 to 2019, the U.S. Latino GDP is the third-fastest growing among the 10 largest GDPs in the world, with the U.S. economy ranking fourth.
Latinos are also accounting for 68 percent of the growth in U.S. labor participation, due in large part to Latina business owners. As of 2019, Latina women owned 18 percent of all women-owned businesses, and between 2014 and 2019, Latina-owned firms grew 40 percent (according to Latinas in Business Inc.). These are significant numbers and show the impact Latina business owners are making on the country’s overall economy.
There’s no doubt these business owners are helping to fuel the U.S. economy, but we all know they’ve taken a hit given the pandemic’s repercussions and continuous fluctuations with high interest rates and inflation. Nonetheless, the below tips can help the many Latina business owners or aspiring entrepreneurs get started or reach the next level.
Find the right guidance and information. Many women may not know where to turn for trustworthy information to support them with starting a business or making critical business decisions. The good news is there are many free resources and tools to help educate women business owners. The SBA.gov website is another great place to start. It even offers a version of its site in Spanish. Additionally, the Minority Business Development Agency connects women to resources, events and opportunities to help them succeed through its Enterprising Women of Color Initiative. Last, the U.S. Hispanic Chamber of Commerce (USHCC) has more than 200 local chapters designed to support ambitious Hispanic business owners and also has specific Latina entrepreneur programing.
Develop a business plan. Having a good idea is NOT enough. Developing a business plan is the first key step for any business owner. An effective plan can help you prioritize how to spend your time and money and set measurable goals. It also can help identify current or future obstacles so you can better anticipate and avoid potential risks.
For example, with COVID-19 impacts, you may have had to create more online offerings or enhance your digital presence for your business. Some of you may have had to change relationships with supply chains and vendors or reduce hiring because of inflation. Whatever it was, now’s the time for you to review how you’ve adapted to the current situation, which of these adaptions you want to build upon in the future, and then document it in your plan.
Get mentorship support. The past two years reinforced what we’ve always known: It takes a village. As women business owners continue to navigate post-COVID-19 challenges and inflation impacts, connecting with mentors and other experts is one of the most powerful and greatest ways to exchange knowledge, share best practices and learn from each other.
Get credit-ready. Once you’ve got a business plan, connected with mentors and other experts and have done your research, getting credit-ready will be a critical next step before obtaining business financing. It’s important to work with a bank that offers tools and resources that make financing easier to understand, and a banker who shows you what your business needs in order to get approved for a loan.
Before applying for a small business loan or line of credit, your bank will want to see that your business generates steady cash flow, has low levels of debt and is in a strong financial position in order to manage debt payments. The more you know about what makes a strong credit application, the more prepared you will be to pursue credit for your business. A business plan also may help you obtain business financing. For example, for an SBA loan and some larger business loans and lines of credit, lenders may require a formal written business plan before extending credit.
By creating or updating a business plan, looking into mentorship opportunities, increasing knowledge and getting credit-ready, more Latina entrepreneurs can achieve success.
Ryan Olson is the Wells Fargo small-business manager in Salt Lake City.