For Latin Americans, women, it is more difficult to start a small business

Fabiola Giguere has been running a cleaning business for the past 33 years. That’s no easy task for anyone, as the US Small Business Administration estimates that two-thirds of new businesses don’t make it past their 10th birthday.

The number is more impressive, however, when you consider that Giger immigrated to East Haven in 1989 to escape the terrorism of the Peruvian militia group known as Sendero Luminoso. Three years later, she started Limpiex, a cleaning company in Hamden.

As this business prospered, Giguere began to pursue her passion through her own jewelry brand, Achiq Designs. Named after the Quechua word for “bright,” Achiq Designs has been open for the past five years at 1081 South Main St.

Giguere plans to expand his business to the former Wells Fargo branch in downtown Wallingford.

“It will be open concept,” she said. “Having fun.”

Giguere’s success is an exception to the norm, however, as both women and Latinos are more likely to be workers than business owners.

In Connecticut, about 16 percent of workers are Hispanic, but only 9 percent of business owners are Hispanic, according to an SBA report. The report also found that about 22 percent of workers are racial minorities, but only 12 percent of business owners.

The SBA found a large gap for women, who make up 48 percent of the workforce but only 41 percent of business owners.

That gap is particularly significant for New Haven County, as small businesses account for just over half of the county’s employment: Higher than both the national and state averages, according to an analysis of 2019 Census data. Journal entry.

To address these disparities, the state announced two new programs this summer – the Connecticut Small Business Incentive Fund and the Connecticut Futures Fund. Both are designed to provide resources for small businesses owned by women and racial minorities.

However, despite new initiatives, many minorities lack business experience or access to the know-how needed to start a business.

Columbia native Nelson Marchan has served as an advisor to the Connecticut Small Business Development Center for the past nine years and has worked with many Latin American businesses.

He explained that the center can provide free resources for those who want to start their own business, even if they don’t have a business degree.

“We want the customer to make more money because that’s good for the economy,” he said. “If a family can make better decisions, that’s an incredible gift to our communities.”

Reflecting on his work, Marchan said his three most successful clients were women. The common thread was that all three have experience in their industry and have gone through the paperwork required to get a loan

Before the bank approves a business loan, Marchan explains, most lenders ask applicants for 20% of the funds needed to start their business. Marchan said banks also ask for technical documents such as a business plan, financial projections and market research.

“The numbers have to be realistic, because if they’re not, then the situation is hopeless,” he said.

Because of the strict requirements, Marchan said applicants may be tempted to turn to a lender with more lenient requirements.

However, the lighter requirements often mean that the loan is seen as a riskier investment, leading to higher interest rates on the loan.

He also added that low English proficiency, a low credit score or lack of collateral can also prevent Latinos from getting a loan.

In addition to these problems, there are additional barriers for women who want to start a business.

“Most of the people who make decisions about who gets a loan are not women,” said JoAnn Gulbin of the Connecticut Women’s Business Development Council. “Access to capital remains the biggest obstacle for women starting, trying to start or growing a business,” she said in a phone interview.

The council provides a range of opportunities for women business owners, including advice, grants, loans and networking. The council focuses on minority and low-income clients, as the council reports that 48% of their clients are minority-owned businesses.

With the growing number of Latinos in Connecticut, Gulbin explained that the council has hired Spanish-speaking business advisors and program managers, made its website available in Spanish and offers bilingual workshops.

Gulbin also pointed to a new program that has developed a series of business development services for home child care providers and centers in partnership with the Connecticut Office of Early Childhood.

One in five child care workers in Connecticut are Hispanic women, according to 2018 census estimates. The number is higher for Meriden, where one in four child care workers are Hispanic women.

“A fair amount of childcare providers are Hispanic,” Gulbin said. “To really do our best to serve them, we needed to offer more in Spanish.”

Gloria Montoya of Meriden recently joined the council. She applied and attended a number of workshops.

Montoya’s business, My Small World, is well…small. She is the only employee and takes care of six preschool children. Montoya migrated from Peru in 1999 and started a home-based babysitting service in 2009. She said the children are a mix of ages and ethnicities, but she speaks to them all in her native Spanish.

“Children are like mushrooms that can learn several languages ​​even if they don’t speak them,” she said in Spanish. “The kids will decide what language they speak or whether they want to speak both or not, but they already have the knowledge.”

Montoya has an associate’s degree in child development from Middlesex Community College and is passionate about discussing early childhood education, but admits that accounting is not her forte.

“I knew a lot about what a business was and how to run it, but all the accounting went to my accountant,” she said. “They [the council] they gave me a lot of guidance.”

Montoya also received a technology grant during the pandemic and funding to replace her carpet with hardwood floors to provide better care for children with allergies.

In addition to a lack of access to loans, many Latin American businesses struggle to stay in business for long periods of time.

“I think sometimes the lack of planning is what causes companies, Latin American companies, to fail,” Marchan said.

For long-term success, Marchan stressed the importance of creating a solid business plan — especially when the new business owner doesn’t have to apply for a loan. He said many first-time business owners get carried away with their ideas and don’t know how their project will work in the future. “Dreams are beautiful, but sometimes reality trumps dreams,” he said. “If the business isn’t growing and you still want to keep spending money, that’s not good.”

“You should do your research”

When Giguere first opened Limpiex, she remembers being advised by SCORE, an SBA-run nonprofit that connects business mentors with prospective business owners. “Every time you open something, you have to do your research,” she said.

Giguere holds a bachelor’s degree in business administration from Albertus Magnus College. However, despite her business background, Giguere recalls the SBA helping Limpiex become an 8(a) certified company.

According to the administration, 8(a) certificates are a nine-year program designed to help businesses owned and controlled by socially and economically disadvantaged individuals. For Guiguiere, this meant Limpiex could compete with larger firms on contracts earmarked specifically for the 8(a) business.

Guigiere encourages other business owners to take advantage of programs like SCORE and 8(a). A few years ago, Gougier said she returned to SCORE to conduct a workshop on how to start a cleaning business.

“Starting a business can be quite intimidating. But once you have the plan, it definitely gets easier,” she said.

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