Latin-owned businesses have seen a boom in the last few years. A report by the Treasury Department states until 2023, nearly 5 million Latino-owned businesses were operating in the USA. This number has since grown and is expected to grow even further.
With such promising numbers, one might expect that the route is clear for Latino entrepreneurs. However, reality is far from this.
Latino businesses face multiple problems when starting and running businesses. These issues can be related to accessing capital, securing contracts (from both government and private sectors), and getting affected by natural disasters i.e. pandemics.
Considering all these obstacles, starting a business can be quite a hassle. However, with the right planning, a good strategy, and some information about the market, a startup can be turned into a successful venture.
Here are some of the tips you can use as a Latino business owner to kickstart a successful startup:
Tips To Start a Business as a Latino Entrepreneur
· Start With a Community Problem
Being part of the Latino community, you must know the pain points of the community as well. You can use these pain points to identify a good problem where there is a market gap as well. Even businesses offering the same services use community-based problems to reach out to a much wider audience.
For instance, the USA has a huge pool of active internet service providers (ISPs). These ISPs offer services in different regions and have their perks as well. However, very few ISPs use the pain points of a community to their advantage, such as Spectrum. The brand offers TV, internet and phone service.
Spectrum realized that Hispanic communities in the USA often have to choose English over Spanish while communicating with the brands. To address this issue, the brand initiated Spectrum servicio al cliente where the Hispanic audience can seek support regarding their services in Spanish.
· Build a Solid Product or Service
Now that you have recognized the pain points or problems faced by your community, you can address them via a product. The issue can be as simple as a primary need or something as extravagant as a luxury product. Just a heads up, regardless of the product or service, keep in mind that profitability matters. So, consider the possible ROI and profit ratio before you start manufacturing.
A good example of this can be the food business. People living in the USA struggle with finding good Mexican food all the time. Most of the food items available in the USA are either bland or not very authentic. To address this issue, Chipotle came into existence.
The brand has gained a lot of attention because of its affordable, customizable full meals, and now established itself as a household brand with more than 3,000 locations in the U.S.
· Secure Finances
This is one of the major issues when running a business. Within Hispanic communities, this issue can be more severe because there is no backup. Previously business owners relied on bank loans and self-finance. However, considering the current economic condition, securing a loan or having good enough savings to start a business is nearly impossible now.
Now, within Hispanic business communities, crowdfunding is becoming more popular. People start their funding pages and earn some basic capital through these online crowd-funding accounts. This process required no interest or return time.
Apart from this, there are platforms like ALPFA for supporting Hispanic startups. These platforms help startups to grow and finance small businesses to scale. Moreover, they also offer a stage to showcase the product and market it further.
· Use Community for Marketing
Marketing your product is very important. A good marketing campaign will not just help you reach a wider audience; it will also help you establish dominance in the market. However, most Hispanic businesses try to focus on general marketing to appear as a global brand.
This strategy is only effective when a brand has a billion-dollar budget and a dominant presence in different countries. However, if you have a small business with very limited on-site presence, it is better to start with a small number and leverage the community for marketing.
You can directly reach out to the community, and target their culture, values, and other emotions. This helps with direct marketing and especially the audience relate to the brand.
· Build a Feedback Cycle
Launching a good product that can help you earn a lot of money is very rare. In some cases when companies become one-hit wonder, they fail to scale in other categories. This is the reason it is advised to keep the feedback cycle open at every end.
A good way to set a feedback loop is to seek reviews directly from the customers. You can conduct an online survey, invite customers for product sampling, or ask customers about their overall experience. This will help you improve the product over time and retain your customers for a long time.
Inspiring Hispanic Entrepreneurs
- Beto Perez
- Selena Gomez
- Carlos Castro
- Sofia Vergara
- Rea Ann Silva