Hispanic Small Business Community Thrives in WNC

by Sarah Arredondo

These days we sense the impact of the growing Hispanic population in North Carolina in all sectors of the economy and the community. Unfortunately, lately the focus has shifted to the potential economic and social costs that this community imposes. However, a first-of-a-kind study published in January 2006 by the Kenan-Flagler Business School at UNC-Chapel Hill seems to suggest that, rather than burdening the economy, the Hispanic community offers a greater positive economic impact – one that promises to grow in the years to come, with Hispanic entrepreneurs at the forefront of this trend.



This
65-page landmark study, entitled The Economic Impact of the Hispanic
Population on the State of North Carolina, states that while the
Hispanic population comprises 7% of the total population in NC, its
overall spending had a total impact of $9.2 billion on the state in
2004. In addition, the “total impact of Hispanic spending may come
close to doubling over the next five years,” the study concludes. How
is the local business community responding to the potential for
Hispanic buying power, and how are Hispanic entrepreneurs engaging in
this process?


While there are
some sectors of the local economy, such as Health and Human Services,
construction, agriculture, and non-profit organizations that regularly
serve Hispanic clientele, other sectors seem to be struggling to tap
the Hispanic consumer market. Perhaps language and culture are
significant barriers for many businesses – many seek to hire bilingual
personnel yet may miss out on the cultural component. In other words,
they fail to generate a sense of “confianza” (trust) and “personalismo”
(being well-known in the community) that is so important in Hispanic
cultures. Or, they simply may not know how to tap into the informal
network that surrounds this community. At the heart of the dilemma is
the ability and willingness to foster a relationship with these clients
rather than simply market a product or service.


At the same
time, a plethora of Hispanic entrepreneurs has emerged to meet the
unique needs of Hispanic consumers in areas such as banking, health
care, childcare, groceries, restaurants, professional services,
immigration services, construction, and travel. For example, it is now
possible for Hispanic residents to do their banking in Spanish at the
local credit union, receive health care from bilingual providers (at
least some of the time), send their children to bilingual daycare
centers, buy groceries and housewares at the neighborhood “tienda”
(store) – the big grocery chains still don’t sell the essential “comal”
(griddle) or molcajete (traditional stone grinder) for the Mexican
kitchen – and dine out at their favorite “taquería” (taco stand) or
authentic Mexican restaurant. They can also find one-stop agencies to
do their taxes, pay bills, order satellite TV or phone service, and
have official documents translated. Here’s a valuable tip for everyone:
the next time you’re planning a trip to Latin America, stop by your
neighborhood Mexican store and check the prices for airline tickets.
Many times they are cheaper at a tienda than anywhere else.


Once again,
according to the Economic Impact of the Hispanic Population, these
small businesses hugely impact the local economy by contributing tax
revenue and creating jobs. A Census survey of minority-owned businesses
in 2002 discovered that there were 9,047 Hispanic-owned businesses in
North Carolina, earning $1.8 billion in sales and receipts.
Furthermore, on an international scale, the study points out that
exports from North Carolina to Latin America (mostly in the textile
industry) are responsible for $7,219,834,580 in revenue, creating
68,484 jobs and generating $230,870,155 in local and state taxes. “With
the state’s large and growing Spanish speaking labor pool and rapidly
expanding Hispanic consumer base,” the study adds, “North Carolina
offers some rich opportunities for Latin American firms seeking to
establish or increase their presence in the United States.” In a region
rich in the tourism and service industries, the local mainstream
business community should be investigating ways to harness this
promising economic potential.

But despite this
growing impact, the study also notes that Hispanic entrepreneurs face
several barriers to success in addition to those encountered by all
entrepreneurs, primarily 1) access to information about the commercial
and legal aspects of running a business and 2) obtaining complex legal
documents in Spanish. Moreover, many Hispanic entrepreneurs rely on
their own savings to start their businesses and sometimes lack adequate
insurance coverage – needs that open up additional areas of opportunity
for the financing and insurance industries.

All in all, this
expansive study suggests that the economic benefit of Hispanic
immigrants outweighs the economic burden on state and local economies;
doing away with Hispanic laborers and entrepreneurs will serve only to
weaken those economies. In other words, it is to the benefit of the
local economy to strengthen and support Hispanic small businesses as
well as appeal to the Hispanic consumer base in the public and private
sectors. These two elements – along with a dose of confianza and
personalismo –will be essential to future economic prosperity in our
community.