Building a business as a Latino entrepreneur

Latino entrepreneur
The experts at Bankrate have compiled the best ways for Latinos to fund their businesses and overcome the funding gap.

Claudia Ramos, graphic designer and illustrator from North Hollywood, California, dreams of turning her side business, Claudia Ramos Designs, into a full-time gig. Her dreams are specific: She’d like to see her work and that of other Latina artists sold in her very own shop. Ramos, who was born in El Salvador, currently works for Hasbro as a fashion graphic designer by day and (after her seven-year-old daughter goes to bed) on her side business by night.

Starting a business from scratch

In 2013, the company where Ramos worked, American Greetings, closed its L.A. office. It was a turning point for her as she considered her next steps.

“I thought, ‘Oh, my gosh. What am I going to do?’” she said. Ramos quickly realized that she could rely on her creativity, on which she’d capitalized since she was a young girl.

Ramos began challenging herself. “A friend asked me to illustrate a save-the-date postcard for her wedding, and I said, ‘Okay…’”

Soon after, Ramos’ designs were featured in a wedding magazine, and she opened her Etsy shop.

“It all started using my own money,” she says. “It’s all been out of my own pocket. I’ve never reached out for anyone to sponsor me or reached out to a bank for a loan.”

Ramos’ entrepreneurial spirit is common among the Latino population in the United States. Her Latino counterparts, who make up a full 18 percent of the U.S. population, reached a population of nearly 58 million in 2016, according to Pew Research Center.While the 2018 Stanford Graduate School of Business Latino Entrepreneurship Gap reported that just six percent of all businesses were owned by Latinos in 1996. Today, that number has more than doubled to nearly 13 percent.
Despite these figures, most Latino-owned businesses remain small, with 98 percent reporting less than $1 million in revenue per year.

As a whole, national banks fund Latino businesses less often than for entrepreneurs from other ethnic groups. According to the 2017 Stanford Graduate School of Business State of Latino Entrepreneurship Report, only 12 percent of Latino firms who employ more than one person received bank loans, compared to 18 percent of white-owned firms, 15 percent of Asian-owned firms and 14 percent of black-owned firms.

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