Wednesday, March 22, 2006

As Latino population grows, so do businesses

Posted on Wed, Mar. 22, 2006
As Latino population grows, so do businesses
By Blanca Torres
The U.S. Census Bureau released a report Tuesday creating more fodder for the terms "Latino" and "growing numbers," which seem be inseparable these days.
The study found the number of Latino-owned businesses in the United States grew 31 percent from 1997 to 2002 -- three times the national average for all businesses.
The rise mirrors the Latino population growth rate, which increased by 15 percent to 40.5 million in 2004 from 35.3 million in 2000, that is driving a burgeoning consumer base and emerging class of educated and skilled entrepreneurs.
"By 2050, Hispanics in the labor force will go from accounting for about one in 10 U.S. workers to about one in four," said Valarie Strang, a statistician with the U.S. Census Bureau. "Minority-owned businesses will therefore be at the forefront of these changes."
Latino-owned businesses made up about 7 percent of all U.S. businesses -- low compared with the 14 percent chunk Latinos comprise of the total population. In California, Latinos owned 15 percent of all businesses and make up 35 percent of the population.
Such firms in the East Bay vary from companies such as TriNet Communications Inc. in Livermore, owned by Jon Fernandez, which sold $48 million worth telecommunications equipment last year, to one-person outfits such as Evelina Villa, who is a consultant, translator and language instructor.
The study found that more than two-thirds of Latino-owned firms were either in the retail or construction industry. But as the number of Latinos and the businesses increase, so will the type and sophistication of those firms, experts said.
"What we are going to see is a sort of catch-up phenomenon," said Carlos Baradello, a general partner at Sienna Ventures based in Sausalito and a lecturer at the University of San Francisco School of Business and Management.
Latinos have three characteristics pushing the business boom, Baradello said.
First, they are increasing rapidly. Second, Latinos are younger on average and younger people are often more willing take risks like starting a business. And third, many Latinos, especially immigrants, gravitate toward labor jobs that lend themselves to self-employment such as janitorial and construction work.
"The statistics will not change dramatically, but the companies will grow in size and position in the value chain," Baradello said. "The second and third generation is going to start venturing into industries that require education and a unique understanding of the market."
That shift is visible in Contra Costa County, which had 7,370 Latino-owned businesses, and Alameda County, which had 10,588.
"The biggest trend we're seeing is the growth in Latino homeownership," said Pedro Babiak, vice president of the Contra Costa Hispanic Chamber of Commerce and owner of Lighthouse Computer Group in Martinez.
That rise in homeownership has helped various new companies start, he said, from construction and real estate firms to mortgage bankers and home appraisers.
About three-quarters of Latino-owned businesses were one-person enterprises, the study found.
That number includes people like Villa, a bilingual human resources consultant in Walnut Creek, who ventured on her own in 1999 after working for companies like Kaiser Permanente and Levi Strauss & Co.
Villa, who came to the United States in 1985 from Argentina, has found plenty of work.
"This was good opportunity for me because I am bilingual and I have a background in human resources and training," Villa said. "My business is growing a lot because there are so many businesses that hire Latino workers and they ask me to help them out."

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