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Photo: Dave G. Houser/CORBIS |
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You’re the Boss
When Patricia and Guillermo Gama vacationed in Florida in 1985, they found no fresh tortillas. The Sunshine State seemed to them 20 years behind in its Mexican fare. Opportunity was born. The Gamas sold everything they owned in Texas, moved to Florida, and opened a Mexican bakery just east of Tampa Bay. A cross-country move isn't a prerequisite to starting a business. Having passion is. Two million Hispanics now own businesses and demographers project the number could double every five years. Most are running small- or medium-size businesses within a neighborhood or community; others are managing multimillion-dollar corporations. The Gamas, who started with two employees and 900 square feet, had grown to 48 employees and had a successful tortillería by 1996. They also had hit a turning point: either scale back the business or find capital for a significant expansion. With help from the Small Business Administration (SBA), and the Tampa Bay Economic Development Corporation (TEDCO), the Gamas secured a $1 million loan.
Today, El Mirasol Inc. has 130 employees who make more than 2.4 million all-natural tortillas daily. They ship 50 varieties-20 percent of them packaged under private labels-to stores and restaurants in the United States, and to Mexico, Peru, Venezuela, Caribbean countries, and Spain. The Gamas still have the bakery-now expanded into a Mexican grocery-and last fall, Patricia Gama opened what she hopes will be the first of many Mexican restaurants. Like the Gamas, what most Hispanic business owners have in common is that they started small, many benefiting from SBA aid. "There's never been a better time for Hispanic entrepreneurs to get access to the SBA," SBA Administrator Hector Barreto Jr. says. The SBA is having record-breaking years, with Hispanics among the fastest-growing segments being served. In fiscal year 2003, almost $1 billion were loaned to Hispanic-owned businesses. That volume increased by 43 percent from 2002 to 2003, and continues to grow, he says. Loans, however, are only part of the story. "We know that when a small business has a business plan, does market research, understands the resources needed, and has contingency plans, the chances of surviving past the critical first three years expand exponentially," Barreto says. "You need to know what you don't know. Last fiscal year, we were able to train and counsel in excess of 2 million entrepreneurs. We refer to it as capacity building. I call it sharpening the saw. It's easier to mow down the forest of opportunity with a sharp saw than a rusty hatchet." Barreto understands small business firsthand. At age nine, he was already working with his parents-his father emigrated from Mexico in the 1950s; his mother was born in the U.S.-busing tables in the family's restaurant. When he was older, he was co-managing import/export and construction businesses. Three years after college, he launched an employee benefits firm, and before joining the SBA, he founded an institute to aid small businesses. "Rushing into starting a small business, thinking you'll figure it out as you go along, can be costly and very dangerous," he says. "In my family, my dad was the visionary, and my mom was the worrier who would ask the hard questions. Countervailing voices are important." Entrepreneurs need three essential ingredients to launch a successful business: Access to capital, counseling in how to plan and run a business, and opportunities to sell their goods and services. The SBA can help on all counts. Capital breathes life into a business, Barreto notes, adding that most small businesses are capitalized with as little as $50,000. There are $17 billion in financing for small businesses through the 7(a), 504 and venture capital programs. The SBA doesn't loan money directly to businesses. It guarantees loans made by lending institutions, allowing banks to make loans that might otherwise not be made, says Alberto Alvarado, director of the SBA's Los Angeles district office. The office led the country in financing 4,600 businesses last year, for $1 billion. "We've shown the banking industry how profitable small-business lending can be. We have a default rate that rivals commercial lending standards," Alvarado says. The SBA works with various partners to offer planning advice and coaching. Classes, mentoring programs, and hands-on assistance from Small Business Development Centers (SBDCs) and SCORE (Counselors to America’s Small Business) Chapters, which offer business counseling, all offer low-cost or no-cost opportunities to take the mystery out of starting and running a small business. "The SBA is not about one-size-fits-all help," says John Dunn Jr., assistant director for the SBA's South Florida district office. "The resources and services we offer will be specialized to a given district and communities within that district." The Prequalification Loan Program, for example, helps women and minorities prepare and package a loan application before setting foot in a bank, increasing their chance of success. Once a small business is up and running it needs one more crucial ingredient: business. Barreto is especially passionate about a matchmaking program the agency began in 2003. "Small business owners meet one-on-one with buyers from federal agencies and corporate America," he explains. Alvarado is excited, too. "The greatest part of the American economy is coming from small business and we can help grow that. SBA has been one of the nation's best-kept secrets." Now check out our list of book recommendations to help you get your idea off the ground. |
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