The world of business is brutal, competitive, and cutthroat. To excel in it, you need a strong network that will help you get through every situation. Consequently, we see families with strong monopolies in different industries and niches.
However, things are changing now. Technology has worked as a great equalizer, helping anyone and everyone with a vision to enter the business. Today we see 14-year-olds, owning billion-dollar tech companies, hiring people double their age, and supervising teams across the globe.
There is no doubt that the business industry in the USA has come a long way. When we see a few stories that make us question the so-called cutthroat competition, we can’t deny networking is an important part of business.
As a Hispanic business owner, here are some of the common business challenges that I have faced so far. If you are also a business owner of Latino origin, this write-up will help you become aware of common issues and some of the ways to resolve these issues.
Language Barrier
For businesses to run smoothly, communication plays a very important role. From helping the team understand the vision of the brand to getting the message across to the clients, language is the key. However, most of the Hispanic business owners struggle with English business jargon.
While they are proficient in Hispanic, they cannot seamlessly communicate with customers and business professionals. Consequently, we notice that even when offered access to public product displays and trade events, Hispanic businesses hardly gain attention.
Solution
Businesses trying to reach a wider audience especially small businesses targeting the Hispanic population, need to opt for bilingual or Spanglish for communication. Spectrum is a great example of this strategy. The brand has dedicated Spectrum en español customer support to ensure that Hispanic clients can get service in their native language.
Business Capital and Financial Risks
For any business to run smoothly, funding plays a very important role. It sets a business in the right mojo, helps management to feel confident, and ensures employees have access to the right resources for innovation.
Most Latino-owned businesses start with family loans or collective money from the community. While this helps them start the business, it is not enough for scaling the business and setting it on the right track.
A study by Stanford claims that out of all the Latino-owned businesses that seek business loans from national banks exceeding $100k, only 20% get approval. On the contrary, more than 50% of the white-owned businesses receive loans from national banks. This high disparity in trust in Latino-owned businesses.
Banks see Latino-owned businesses as risky investments regardless of high success rate. Consequently, most of the small Latino businesses opt for risky, short-term, private loans that ask for personal assets for collateral. This exposes Latino business owners to personal financial risk.
Solution
Latino business owners should seek opportunities that can help them rate investment based on business model. This is especially ideal for tech businesses where investment companies openly offer capital in return for equity in the company.
Networking and Resources Issues
For most people, Hispanic business owners might imply that they have ties to Latino countries.
However, in real life, Hispanic businesses running in the USA struggle due to limited resources and networking issues. Most business families have a closed networking style where they introduce their kids to the right environment, where they get to fortify their friendships with other business families.
Since most of the Hispanic business owners are immigrants who come from different countries, they are treated as outsiders. Most of the startup founders and investors in the US don’t see them as potential partners or credible businesses, eventually limiting their access to resources.
Solution
While networking through events might be a little difficult due to invitation restrictions, social media, and official networking tools are perfect. You can easily find social media groups where startup owners share resources and ideas. Most groups have no entry criteria and are open to joint ventures and collaboration as well.
Access to Big Contracts
Many Hispanic businesses have grown in the last few years. This number has seen a significant improvement after the pandemic. Moreover, business experts claim that Hispanic businesses are much more resilient, as they bounced back easily after the pandemic slump.
Regardless of this growth, Stanford Graduate School of Business 2022 research reported that Latino business owners secured 3.3 times smaller contracts compared to white business owners. Moreover, these businesses also reported to have secured 30 times smaller government contracts, which highlights the level of trust in these businesses.
Solution
Latino businesses should opt for multi-founder startups and business ideas. This will help businesses secure better contracts without feeling out of place.
Ideally, these challenges should not exist, especially if they are only affecting Hispanic businesses. However, in the real world, situations are far from perfect, so business owners need to navigate accordingly. The above-mentioned solutions can help Latino business owners deal with these challenges.
