More Hispanics become owners of small firms
Posted on Sunday, February 4, 2007
Entire retail centers in cities such as Rogers and Springdale, especially along U. S. 71 Business, display signs in Spanish.
But quantifying the impact Hispanic-owned businesses have on the region’s economy is difficult. Chambers of commerce are trying various means of establishing ties with Hispanic business owners, but they say a comprehensive study is needed to measure how big a slice of the area’s economic pie these businesses represent.
“I don’t know where we would be as a region without the contribution of the Hispanic community,” said Bill Ramsey, president and chief executive officer of the Fayetteville Chamber of Commerce.
Jeff Collins, former director of the Center for Business and Economic Research at the University of Arkansas’ Sam M. Walton College of Business, said no one has researched the economic impact of Hispanic population growth in Arkansas.
Such a study would have to be commissioned, according to Kathy Deck, the center’s interim director. The cost would vary, she said, according to how much information was requested of the study, but a starting point would be around $ 10, 000.
“It all depends on the definition of what you would consider a business, how to collect the data, what questions to ask, how it is compiled and many other factors,” Deck said.
A simple evaluation of existing data already gathered, like the study the center did for a Benton County group considering a referendum on liquor sales, costs $ 5, 000 to $ 10, 000.
“But it is always more expensive to gather primary data,” Deck said.
The Skyline Report, a quarterly evaluation of real estate markets in Benton and Washington counties commissioned by the Arvest Bank Group, includes the gathering of primary data.
“That is $ 250, 000 a year,” she said. “We would love to do one, but someone would need to hire us to do it.” The cost of commissioning a study might be the largest obstacle to any one chamber, said Bill Rogers, economic development director for the Springdale Chamber of Commerce.
Ramsey said the information gathered would be invaluable.
“That is information we would need to know as the need arises,” he said.
Ed Clifford, president and chief executive officer of the Bentonville / Bella Vista Chamber of Commerce, says he would be delighted to take part in any type of study to measure the economic impact of Hispanics in Northwest Arkansas.
“We would even assign a staff member to it. It is that important to us, and it is that important to do,” he said.
SEEKING A BETTER LIFE Many Hispanics were drawn to the state to work in food processing, Collins told the Democrat-Gazette in August. As they arrived — often from other states rather than directly from other countries — they created networks that in turn attracted more Hispanic workers, he said. “The grapevine is pretty active,” he said. “People come here, and they’re saying there are a lot of jobs out here.” After establishing themselves in the area, Hispanics tend to start looking to improve their situation. For some, that means starting their own business. Leo Cruz, a Northwest Arkansas consultant who specializes in marketing to Hispanics, said small business is entrepreneurbased and that immigrants are natural entrepreneurs. “That’s what they came here for,” he said. “If they had something in their country, why would they leave it ?” Eddie Vega, one of the region’s early Hispanic entrepreneurs, came to Northwest Arkansas in 1993 from the San Fernando Valley in Southern California. After working with family and at several radio-station jobs, Vega acquired two radio stations and in 1998 started the area’s first Spanish-language newspaper, La Prensa del Noroeste de Arkansas, which he sold to Stephens Media in 2003.
Along with the radio stations, Vega also runs a music promotions company, Aztlan Promotions, and owns the Springdale Civic Center on Old Missouri Road under the title of EZ Spanish Media.
“The hardest part was getting started, but I haven’t had many obstacles. I’m positive about what I want, and I will do it,” said Vega, whose parents emigrated from Mexico.
It took Vega more than a year to get the loan when he bought the radio station license.
“But that happens to everyone buying a radio station,” he said. “A license is just a piece of paper. Banks don’t have a lot of faith in one piece of paper. I had to knock on a lot of doors, but I knew it was going to happen.” And the banks are very happy with the results, Vega said.
“We’ve exceeded our expectations and are five years ahead of our goals,” he said. “And I purposely set those goals higher than I thought we could achieve so they would look good to the bank.” GROWING QUICKLY The number of Hispanics in Arkansas grew more than 12 times faster than the state’s population as a whole between 2000 and 2005, according to U. S. Census estimates released in August. Attracted by jobs in poultry processing, agriculture and construction, the state’s Hispanic population grew by 51 percent to 130, 846 while the state’s total population increased 4 percent to 2. 78 million. The census figures confirm demographic and economic trends in Arkansas. Benton and Washington counties in booming Northwest Arkansas added more than 20, 000 Hispanics. From 2000 to 2005, Benton County’s Hispanic population grew 78 percent, from 13, 469 to 23, 996, while the county’s total population grew 22 percent from ™, 406 to 186, 938. In Washington County, the Hispanic population grew 73 percent, from 12, 932 to 22, 415, in the same period. The overall population there grew 14 percent, from 157, 715 to 180, 357.
Hispanics are the most populous minority group in the United States, with an estimated population of 40 million, according to the Census Bureau. That number is projected to grow by more than 1. 7 million a year.
There were 1. 6 million Hispanic-owned businesses in 2002 in the country, up 31 percent from 1997. Their total receipts in 2002 were $ 226. 5 billion, up 22 percent from 1997, according to the U. S. Hispanic Chamber of Commerce.
Although no local or regional data is available, an Internal Revenue Service report predicts that one in 10 U. S. small businesses will be Hispanic-owned by the end of this year.
About 40 percent of Hispanicowned firms in the United States are in administrative and support fields, waste management, health care and other service industries. Another 13 percent are in construction, the Hispanic chamber said.
BUILDING A BASE The Rogers-Lowell Area Chamber of Commerce moved a small-business support job to the forefront when Vilma Dominguez took on the account representative position last year. Since then, she’s been working to integrate Hispanic businesses into the chamber’ network, but it’s an uphill battle. “Many Hispanic business owners associate a chamber of commerce with the government. In their home countries, they are part of the government,” Dominguez said. She is trying to build a working relationship with Hispanic business owners on the chamber’s membership list. She visits each business personally to verify that it still exists and to speak with the owner. Dominguez, a native of Nicaragua, remembers her family being the only Hispanic children in Rogers High School when they moved to the area nearly 30 years ago. She speaks fluent Spanish and is familiar with the cultural differences that would trip up an outsider.
“You have to get to know Hispanic business owners personally before they will speak business,” Dominguez said.
The Rogers-Lowell Chamber is gaining new Hispanic members mainly through building relationships with current Hispanic members as they are added to the membership lists, Dominguez said.
The Springdale Chamber has tracked the number of business licenses issued to people with Hispanic names for two years. The number has been fairly steady at around 200, Rogers said.
“We don’t track the revenue these businesses generate because we don’t have a vehicle to track it with,” he said.
The city has seen an increase in the number of visible Hispanic businesses in the past five years, Rogers said. That led the chamber to dedicate a staff member to reach out to minority-group small-business owners.
The most obvious problem most potential Hispanic businessmen face is a language barrier, Rogers said.
The Springdale Chamber has started working with the area’s Spanish-language newspapers, supplying articles with basic information about the chamber and how it can help business owners.
The outreach is working, Rogers said, but he doesn’t have quantifiable numbers to prove it.
The Fayetteville Chamber has a subcommittee that focuses on minority-group-owned small businesses, Ramsey said, but no special programs to recruit Hispanic business owners or entrepreneurs.
“We do have participation on our board from the Hispanic community,” Ramsey said. “We keep our ears open for the demand for such services, but we haven’t heard it yet.” The Bentonville / Bella Vista chamber has considered minority-group small-business outreach programs but would probably also target Asian business owners along with Hispanic.
The city once had many more Asian immigrants than Hispanic, Clifford said. But a special census in March 2006 showed Asians now comprise 4. 2 percent of Bentonville’s population, while Hispanics represent 8. 5 percent.
Other than a couple of restaurants that are satellite locations for those based in other Northwest Arkansas cities, Clifford could not name any Hispanicowned businesses in Bentonville. The city does not have a business license requirement, he said.
Fort Smith has a permitting system for businesses but only tracks minority group-owned businesses on a voluntary basis.
The application for a business license asks if the applying business wants to be listed as a minority-group-owned business as part of the city’s compliance with community development block grant programs through the federal government, according to Matt Jennings, Fort Smith’s director of community development. The listing designates the businesses as either woman-owned or minority-groupowned but does not designate by race.
Mat Pitsch, director of economic development for the Fort Smith Chamber of Commerce, said the chamber doesn’t have an outreach program for minoritygroup business owners.
The Siloam Springs Chamber of Commerce’s programs targeting Hispanic-owned businesses have been well attended, said Patti Eiland, chamber membership and public relations manager.
A “Business After-Hours” event was popular and generated questions about chamber membership but was fruitless in gaining membership, she said.
“Reaching out to that group is always in our mind. We just haven’t found the right avenue for it,” she said.
BANKING EFFORTS Banks have started several efforts to reach out to the Hispanic market. First Security Bank in Springdale began offering classes this year about basic banking procedures, including opening checking accounts. Arvest Bank in September added a Hispanic marketing manager to reach the expanding Hispanic population. Manuel Ocasio was selected mainly for his background as a pioneer in supporting commercial lending through outreach to businesses with Hispanic employees, Arvest spokesman Jason Kincy said. Commissioning a study of the Hispanic community’s economic power could be a future Arvest task, Kincy said. “We haven’t discussed that, but it would certainly be something we would be interested in seeing done,” he said.
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