Everyday more and more Latinos pass the “Welcome to Rhode Island” sign as they relocate, making Rhode Island their new home. The Latino population is the fastest growing ethnic group in the state, and with the economy of R.I. still limping along many Latinos have had to turn to entrepreneurship for their livelihood.
Juana Horton, Chair at the R.I. Hispanic Chamber of Commerce, says, “The businesses that they have opened run the gamut, from anything such as retail to insurance to restaurant and tax businesses. We are also seeing a large number of women Latino business owners, which is also nice to see.”
Horton says there is no doubt that a link exists between high unemployment and growing entrepreneurship. “Higher unemployment will usually trigger an entrepreneurial community,” says Horton. “It triggers more activity in regards to people looking to open up their own businesses and for new opportunities. I would say that’s not only geared towards the Hispanic community, I would say that within the community at large it generates more research or openness to new businesses.”
According to an article by two economists at the Federal Reserve Bank of Boston (Kerry Spitzer and Sol Carbonell), entitled “The Growth of Latino Small Businesses in Providence,” Latino-owned businesses rose from 731 in 1997 to nearly 3,000 in 2007 – which falls along the same timeline of R.I.’s economy falling into a slump.
The growth in Latino-owned businesses is quite impressive, but what’s more impressive is how most of these businesses were started, which was without much assistance from the city, government or other established institutions. Horton says,”These Latino business owners not only contribute greatly to the economy, but they have done so largely on their own dime.”
Don Keel, CEO of The Genesis Center in Providence (a career training center where the majority of students in attendance are Latino), agrees that Latino entrepreneurs tend to open up businesses on their own dime, and says this may be because loans, banks, and other institutions are foreign concepts which they might not know how to navigate.
“They have to open up their own businesses the best they know how,” says Keel. “At The Genesis Center we find that a lot of our students don’t know the basics about banking. So there is a significant focus here in educating students in banking and what to stay away from. Most of them have never used a bank, and we start from the beginning teaching them how to write checks and make deposits.”
Keel also suggests that Latinos rely on their own resources to open new businesses because of the fear that they will get taken advantage of. “Many of our students are prey to predatory loans, to predatory lending institutions,” says Keel. “So, we coach them how to avoid them, or how to get out from under them if they’ve made that mistake.”
The resources most Latino business owners seem to rely on in R.I. is the one-on-one advice and instruction driven centers like the Small Business Development Center at Johnson & Wales (a private university), where they can receive information on business planning, websites, and more. The “Primer Paso” class at the Kauffman Foundation is also another great resource, where classes cater to Spanish-speaking business owners, and Latino entrepreneurs are able to network with other professionals and business owners.
Spitzer and Carbonell offer R.I. a few words of wisdom in regards to the blossoming entrepreneurship amongst its Latino community, saying, “Providence would be well advised to make Latino entrepreneurship a priority, leveraging its past success and embracing the future potential.”