Art Gomez, president and CEO of Field Intelligence Inc., started his data communications business in 2009. The local company, which provides turnkey telemetry solutions for industrial, agricultural and environmental applications, is part of a growing wave of Hispanic-owned businesses across the country.
According to the U.S. Census Bureau’s latest headcount, Hispanics comprised more than half of the nation’s growth in the past decade. The Hispanic population swelled 43 percent to 50.5 million in 2010, representing 16 percent of the nation’s total population.
The number of Hispanic-owned businesses in the United States increased by 43.7 percent, more than twice the national rate of 18 percent, to 2.3 million between 2002 and 2007.
In San Diego, with its proximity to the border and a large Hispanic population – ranked 10th in the nation – Gomez also represents the changing face of Hispanic-owned businesses. These businesses are increasingly moving beyond construction, retail and service industries and expanding into other sectors such as technology, real estate and law.
In San Diego County, the Hispanic population is nearly 3.1 million, or about 32 percent of the total. Hispanic-owned businesses numbered 44,250 in 2007, representing a growth of 35 percent from 2002.
Gomez, whose parents were immigrants from Mexico, said he and his siblings were all born, raised and college-educated in the United States.
“We are a little nontraditional from a lot of businesses in general, but coming up in a first-generation family makes you much more nimble in a sense, because you have to find alternative ways of getting things done,” he said. “It’s very entrepreneurial. I see that with other Hispanic friends, too.”
Field Intelligence has two employees and revenues just under half a million dollars.
The growth of Hispanic-owned businesses in San Diego is largely seen among small companies like Gomez’s.
“Of all the small businesses in San Diego County, about 29 percent are Hispanic-owned,” said Ruben Garcia, the local district director of the Small Business Administration.
The number of SBA loans to Hispanic business owners has risen over the last three years as the economy slowly recovers. In 2011, 84 loans were approved to Hispanic business owners, representing 12.4 percent of total loans.
“The hottest growing demographic right now in San Diego is Latina women business owners, with 28 percent growth,” Garcia said. In addition to starting up companies, more Hispanic women are moving into executive positions -- even among companies not typically run by women -- such as construction, warehousing management and manufacturing, he added.
Yet Hispanic business owners still face particular challenges, including the language barrier, access to capital and the digital divide.
As part of an effort to support Latinos starting up businesses, the SBA recently partnered with the Cámara de Negocios Mexico-Americana, or Canamexa, to provide councilors, advice and other resources in Spanish.
“Small businesses have limited resources,” said Hector Molina, chairman and co-founder of the Mexican-American Chamber of Commerce. Speaking of the many Latinos starting up businesses in the South Bay, he said, “Most are new arrivals or first generation, and their primary language is Spanish. Although they can speak English and understand English, a large part of the technical language -- they don’t catch it.”
Molina founded Canamexa along with fellow businessmen and activists Patrick Osio and Jesse Navarro earlier this year to offer a forum for social interaction and business networking, and to provide seminars, meetings and workshops in Spanish. Within a few months of opening its doors, Canamexa has more than 100 members and several sponsors.
Molina said due to the language barrier, many Latinos go into business without truly understanding business laws and government regulations.
“Jesse Navarro, who works with the district attorney -- he’s the founding member of the (San Diego) Hispanic Chamber of Commerce -- said a large number of businesses have been fined and sometimes closed because they didn’t have workers’ compensation insurance, or were paying employees cash under the table,” Molina said. “That’s one of the things we’re starting to address in our meetings and workshops, is the local, state and federal rules they have to comply with.”
While access to capital can be a challenge for any small company, it can be particularly vexing for Hispanic-owned businesses due to language and cultural differences.
When it comes to lending to Hispanic small businesses, JP Morgan Chase and Co. and Bank of America are well out ahead among the top SBA lenders nationwide, according to Berkeley-based Greenlining Institute’s 2008 report of financial institutions’ performances in SBA loans to minority-owned businesses. JP Morgan (NYSE: JPM)issued 725 loans to Latinos in fiscal year 2008, and Bank of America (NYSE: BAC) issued 637.
With Hispanic-owned businesses on the rise, financial institutions that don’t cultivate this segment might be missing an opportunity to invest in a budding part of the economy.
Another challenge is the so-called digital divide between the computer haves and have-nots. According to the Federal Communications Commission, only 45 percent of Latinos have home broadband access to the Internet, vs. 65 percent of whites. And only 20 percent of Latinos who cite Spanish as their dominant language have adopted home broadband. Among California’s Latino community, 35 percent of adults do not use the Internet at all, according to a 2010 study by the Public Policy Institute of California.
Latinos should be using the Internet to promote their businesses, Molina said. Canamexa has already provided several sessions on basic Internet use, social media and the importance of having a Web presence and collecting email addresses.
The SBA’s Garcia also encourages Latino business owners to capitalize on their connections across the border, and to think in terms of import-export businesses.
“Southern California, especially San Diego, is a bi-national city. Because we’re a border town, we deal a lot with Mexico,” he said. “A lot of people come up from Mexico to buy in San Diego, and a lot of people also go down into Mexico on the weekends and during vacation time. So there is a lot of commerce that travels between the two cities.”
In light of the growing Hispanic population in San Diego, Garcia said he saw the burgeoning demand for Latino consumer products and services as an opportunity for more Latinos to grow their businesses, or start up new ones.
“That’s our goal. What we want to do is help everyone who’s interested in starting a business get what they need, whether they need to learn how to write a business plan, apply for a loan, or how to properly present before lenders,” he said.