The Rise of the Latina Entrepreneur
Nearly 25% of new entrepreneurs in 2021 were Latino, according to the 2023 Treasury Department Report Card. That’s no surprise, with 5 million U.S. Latino-owned businesses generating $800 billion in annual revenues, as reported by Stanford Latino Entrepreneurship Initiative’s (SLEI) 2023 State of Latino Entrepreneurship Report. However, what might surprise you is that the fastest-growing segment is Latina entrepreneurs.
As a new Latina business owner myself, I have a newfound appreciation for business ownership. When I first started my professional career in corporate America, I was drawn to the idea of starting my own business. Then I joined a startup as employee number one and my desire dissipated quickly as I got first hand experience in building a business. I decided to set aside that dream for awhile. Flash forward 20 years and I have a fresh new perspective. Starting my own business has meant an opportunity to follow my passion, to be my own boss, to directly help solve problems for others and to leverage the knowledge I’ve gained in 20+ years of leading and supporting businesses.
Next to the list of business ownership benefits, however, is also a list of challenges. Whether it’s getting access to capital, managing cashflow, scaling the business and/or contending with new and different levels of stress, there are plenty of reasons to choose not to go off on your own. For Latinas and more specifically Latina immigrant entrepreneurs, these common small business challenges are magnified and can become significant barriers to success. According to the Latin American Association, Latina entrepreneurs often face barriers to accessing capital due to socio-cultural expectations, lack of information, and biases in the financial industry. SLEI also reports that Latina entrepreneurs experience the lowest approval rates on business loans from local and national banks. Despite these barriers, Latina entrepreneurs keep growing and their economic influence continues to accelerate.
While I have not had direct experience with obtaining a business loan, I have had direct experience opening a business checking account. When I was ready to open my business account, I immediately went online to see what options were available. I ended up selecting a local credit union, but I was disappointed with the limited local options that I found online. Reflecting on my experience, I can see how much more challenging my experience would have been if I had not had all of the required business paperwork needed to open the account, if I did not speak or understand English well or if it was my first time working with a financial institution.
Note for financial institutions: You have an opportunity to reach customers that need your services through better target marketing. You also have an opportunity to hype up opening up a new business account for all first time business owners. I wish my experience had matched my excitement for having just started my own business, but it was quite mundane and uneventful.
Now, let’s imagine the exponential growth that could be achieved for the U.S. economy, for Latina-owned businesses and for communities everywhere if mainstream financial service providers, venture capital and other business service providers played a bigger role in the growth and scaling of Latina-owned businesses. A win-win-win. Are you ready? What is your business doing to serve this fast-growing segment of the Latino population? Are Latina entrepreneurs aware of your services? Are your services and your customer experience culturally-relevant for the market? If not, let’s chat.
