It is more difficult for Latinos, women, to start a small business

Fabiola Giguere has been running a cleaning company for 33 years. This is not an easy task for anyone, as the US Small Business Administration estimates that two-thirds of new businesses do not survive their 10th birthday.

The number is more impressive, however, given that Guigere immigrated to East Haven in 1989 to escape terror from the Peruvian militia group Sendero Luminoso. Three years later she founded the cleaning company Limpiex in Hamden.

As this business thrived, Giguere began pursuing her passion with her own jewelry brand, Achiq Designs. Named for the Quechua word for “bright,” Achiq Designs has been located at 1081 South Main St.

Giguere plans to expand into the former Wells Fargo location in downtown Wallingford.

“It’s going to be an open concept,” she said. “I have fun.”

However, Giguere’s success is the exception to the norm, as both women and Latinos are workers rather than entrepreneurs.

In Connecticut, about 16% of workers are Hispanic, according to an SBA report, but only 9% of business owners are Hispanic. The report also found that about 22% of workers were ethnic minority, but only 12% of business owners.

The SBA found a large gap among women, who made up 48% of the workforce but only 41% of business owners.

This gap is particularly relevant to New Haven County, as small businesses account for just over half of the county’s employment: higher than both the national and statewide averages, according to an analysis of 2019 census data by the record journal.

To address these disparities, the state announced two new programs this summer — the Connecticut Small Business Boost Fund and the Connecticut Future Fund. Both aim to provide resources for small businesses owned by women and ethnic minorities.

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

Colombian Nelson Marchan has worked as a consultant at the Connecticut Small Business Development Center for the past nine years and has worked with many Latin American companies.

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 degree in economics.

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

Reflecting on his work, Marchan said his three most successful clients were women. What they had in common was that all three had experience in their industries and could handle the paperwork required to get a loan

Before a bank approves a business loan, most lenders require applicants to provide 20% of the funds needed to start their business, Marchan explained. According to Marchan, banks also require technical documents such as a business plan, financial forecasts and market research.

“The numbers have to be realistic because if they’re not, then it’s a no-win situation,” he said.

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

However, more lenient requirements often mean the loan is viewed as a riskier investment, resulting in higher interest rates on the loan.

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

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

“Most of the people who decide who gets a loan aren’t women,” said JoAnn Gulbin of the Women’s Business Development Council of Connecticut. “Access to capital remains the single biggest barrier for women who want to start, start or grow a business,” she said in a phone interview.

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

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

Gulbin also pointed to a new program that has partnered with the Connecticut Office of Early Childhood to develop a suite of business development services for home and center-based child care providers.

According to 2018 census estimates, one in five child care workers in Connecticut are Hispanic women. The number is higher for Meriden, with one in four childcare workers being a Hispanic woman.

“A fairly large proportion of childcare workers speak Spanish,” Gulbin said. “To really do our best to serve them, we had to offer more in Spanish.”

Gloria Montoya of Meriden recently became involved with the council. She applied and attended several workshops.

Montoya’s shop, My Little World, is well… small. She is the only employee and takes care of six preschool children. Montoya emigrated from Peru in 1999 and started childcare at home in 2009. She said the children are of different ages and ethnicities, but she speaks to all of them in their native language, Spanish.

“Children are like sponges that can learn multiple languages ​​even if they don’t speak them,” she said in Spanish. “Children will choose which language to speak or whether or not they want to speak both, but they already have the knowledge.”

Graduated from Middlesex Community College as a Child Development Associate, Montoya 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 bookkeeping went to my accountant,” she said. “She [the council] gave me a lot of orientation.”

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

In addition to a lack of access to credit, many Latino-owned businesses struggle to stay in business for long periods of time.

“I think sometimes the lack of planning forces companies, Latino companies, to fail,” Marchan said.

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

“You have to research”

When Giguere first opened Limpiex, she recalls being advised by SCORE, a non-profit organization supported by the SBA that matches business mentors with potential business owners. “Every time you open something, you have to do some research,” she said.

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

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

Guigiere encourages other business owners to use programs like SCORE and 8(a). A few years ago, Gugiere said she returned to SCORE to give a workshop on how to start a cleaning business.

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

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