Hispanic business owners are responsible for a large part of America’s start-ups. What are the best ways to get off the ground?
According to the U.S. Census Bureau, there are 3.3 million Hispanic-owned businesses in the U.S, with Los Angeles County, California leading the nation. The county has been home to 332,967 Hispanic owned businesses since 2012.
We know many of these businesses are relatively new. In a Wells Fargo/Gallup national study, Hispanic-owned businesses were more likely than the general population to be in the start-up phase (18 percent compared to 10 percent).
Starting a business is no easy feat. It involves careful planning, making key financial decisions and above all, strong commitment. From our experience working with successful Hispanic business owners, here are three tips for starting a business:
1. Have a plan
Developing a business plan is a key step for business success. An effective plan can help you prioritize how to spend your time and money, and set measureable goals. It also can help you identify current or future obstacles so you can better anticipate and avoid potential risks. A business plan also may help you obtain business financing. For example, for a Small Business Administration (SBA) loan, lenders may require a formal written business plan before extending credit.
2. Be credit-ready
Financing is the fuel that can help your business run. That’s why it’s good to start building a strong credit history, which is essential for future borrowing. To begin, a business owner should establish dedicated business accounts separate from personal accounts, as well as look into a business credit card.
One of the most important things you can do before pursuing financing for your business is to get credit ready. It’s important to work with a bank that makes financing easier to understand, and a banker who can show you what your business needs to get approved for a loan. Before applying for a loan or line of credit, you will need to show that your business generates steady cash flow, has low levels of debt, and is in a strong financial position to manage payments.
3. Get informed
It’s important to note there are many free resources available to support with starting a business. The SBA website is a great place to start. Additionally, Minority Business Development Centers connect Hispanic business owners with training and one-on-one assistance. With the right tools and guidance, more Hispanic-owned businesses can achieve success in their business endeavors.