The University of Nebraska at Omaha’s Office of Latino/Latin American Studies (OLLAS) recently released a report on the status of Latino-owned businesses in Nebraska. The report has been in progress since August and is based on data taken from 2007. In order to make the report accessible to a diverse audience, the executive summary is available in both English and Spanish.
According to the data, the number of Latino-owned businesses in Nebraska has been increasing. However, Latino-owned businesses are also less likely to survive and expand than other businesses. Lisette Aliaga Linares, a research associate in the OLLAS department and author of the report, suggests that there may be a variety of reasons for this.
“What we have noticed in general is that small businesses have high mortality when compared to corporations or larger businesses,” Linares said. “They can be like a trial-and-error environment.”
The fact that data was collected around the same time that these businesses were just opening could account for the high likelihood of mortality. “The longer a business goes, the higher the chance of survival,” Linares said.
Linares also suggests that the businesses are undercapitalized could be another possibility. Many of the Latino-owned businesses lack training, resources and expansion, which may be due to a lack of capital. “From anecdotal and personal experience ,we know a lot of family members work in the businesses as unpaid employees who are just helping out,” Linares said. This can allow the business to expand without needing to hire more people.
In order to increase the likelihood of survival for these businesses, there are many things that could happen. One of these is providing more resources in the community.
“Immigrants in general in the U.S. have more entrepreneurship ‘spirit,’” Linares said. “Because when you are born in your country, you put a lot of investment into education and being employed is mainly what matters, but immigrants are trying to survive on low paid jobs, so they see being an entrepreneur an opportunity to offer more mobility.”
Linares also said that a community partner reported having more immigrants coming in for resources and information on how to open a business. Because of this, more training and resources may have a positive impact for Latino-run businesses.
Although Latino-owned businesses are primarily run by males, there has recently been an increase in Latina women with businesses. These include jobs in healthcare and social assistance (childcare and elderly care). According to Linares, the women in this SES often have a hard time getting financial resources to start their businesses. “It would be great if there would be more interest in working with that sector of the population,” Linares said.
Although data from 2012 has been collected, the information will not be even partially released until 2015. However, Linares predicts that Latino-owned businesses will continue to expand in number, especially because of the growing Latino population. Another contributor to growth could be the increasing need and availability of bilingual services. Since the data for the current report was from 2007, when the Latino businesses were in a time of growth, it is not yet known how the economic crisis has impacted the businesses. Linares reported a story about a woman at a Latino-owned businesses who was asked about the crisis. The woman replied with a smile and said, “There’s no crisis here…I’ve been in crisis all my life.”
According to Linares, Latino-run restaurants have been making decisions to adapt to the changing economy like having cheaper prices and offering mostly meat.
“They have made some decisions, but they are used to trying to survive,” Linares said.
While current data is not available, an increase in Latino and minority-owned businesses is important for the community.
“They serve the community and they could potentially provide upper mobility,” Linares said.
Since first generation of Latinos are often immigrant parents, opening successful businesses can often pass down benefits to their U.S. born children. Small businesses are also the main employers in the U.S.
“Success of them means replicating that affect not only on the children but on the wider community,” Linares said. “Small business revitalize communities. They give more benefits to the community in general, the Latino and non-Latino community.”
One of these benefits includes providing job openings for others, which is critical during the economic crisis. To read the OLLAS report, visit unomaha.edu/ollas/businessreport2014.php.