According to the U.S. Census Bureau, Hispanics have accounted for half the nation’s overall population growth this century, and their growth rate from 2000 to 2008 was four times that of the total population.
Exact numbers are hard to come by, since many Hispanics shy away from filling out Census information. “Unofficial data counts over 12 million more people than the Census,” says Luis De La Hoz, Spanish program coordinator at the Intersect Fund in New Brunswick. “We already know there are more than 53 million Hispanics in the U.S. And that Hispanics’ purchasing power in the U.S. is over $1 trillion .”
High population and the high dollar figure mean more of the business world must connect with the Hispanic market. One way to start is learning about Hispanic-owned businesses in New Jersey.
On Tuesday, July 19, the Middlesex County Regional Chamber of Commerce will host the 2011 Hispanic Business Expo from 5 to 8 p.m. at the Garden State Exhibit Center in Somerset. Cost: $10. Call 732-745-0900 or visit mcrcc.org.
Fuzzy math. De La Hoz spends most of his time traveling to meet Hispanic business owners across Middlesex and Mercer counties. Aside from making rounds he keeps tabs on the Hispanic community by crunching numbers as an accountant and owner of a small business specializing in income tax: MarMar Enterprises in New Brunswick.
“I know from doing income taxes that a lot of Hispanic people are doing well,” De La Hoz says. “They have good jobs, they are making money, purchasing houses, using financial advisors, and purchasing life insurance. Probably we are not as equal as we could be but we’ve gained something in the past 10 years.”
He says there is a problem with underreported figures across the board. Incomes from Hispanic workers, who De La Hoz says may have two or more jobs, are often harder to verify. This often is the case with labor jobs, such as construction or farming. More Hispanics have moved to rural areas and small towns that are “less likely to be familiar with E-Verify immigration data and probably not asked for documentation” he says.
#b#Money without equity#/b#. Another thing that makes income numbers hard to verify is that Hispanic businesses within each neighborhood, including the “top three” (restaurants, bodegas, and hair and beauty salons) usually are structured to run on cash; therefore, their net is higher than anyone might expect.
De La Hoz says places like beauty salons make upwards of $250,000 a year because they stay open for longer hours. Many Hispanic restaurants start for breakfast at 6 a.m. and close after midnight, even 2 a.m., because patrons are still coming in. Compared with New Brunswick’s fancy downtown restaurants being open 10 a.m. to 10 p.m., the rent they pay, and what they pay workers, clearly the Hispanic businesses would make more money on average — just without being able to prove it.
“There’s no scanning and computers like at WalMart or CVS, so a lot of the data is not going to show up anywhere,” he says. “Nobody can check how many transactions they process in cash and the owners don’t want to show that. The economy changed, and right now I’m telling a lot of small business owners that they need to report that income. If they don’t they will not have access to capital later,” he says.
De La Hoz warns people that if they wait an opportunity might be lost, especially if they need loan money to renovate, expand, or build another business. “Somebody who needs a business loan or line of credit of around $50,000 needs to show that they make enough money, and the only way to do that is to report their sales,” he says.
#b#Overcoming under-representation#/b#. De La Hoz says New Brunswick is 98 percent Hispanic, but the visibility of their businesses in town is one issue he wants to bring up to Mayor Jim Cahill. He believes with major expansions such as the Transit Village and on the Rutgers University campus, Hispanic businesses have not been fairly incorporated into the city’s branding or marketing. Particularly when “we spent so much money on becoming the entertainment capital of New Jersey,” he says.
#b#Beating the language barrier#/b#. De La Hoz knows that the businesses themselves must make strides such as advertising, putting out accurate English menus with more variety, and improving the seating spaces they have. He also advises businesses to take advantage of aid programs from organizations like the Intersect Fund or small business development centers (SBDC).
In the course of his career De La Hoz excelled at two key things: adapting to changes and taking fiscal responsibility seriously. He first came to the SBDC from the other side of the table, seeking help for his business back in 2008.
Through the SBDC he learned about the Intersect Fund, which provides microloans and start-up services to entrepreneurs, and once there he quickly learned how many other Hispanic businesspeople were looking for assistance, but almost no organization could reach them in Spanish. The Intersect Fund was interested in his services and he was hired to reach out to Latino businesses.
De La Hoz has data concluding that 60 percent of Hispanic small business owners in the U.S. will not learn English in their lifetimes. He says marketers reaching younger Hispanics (35 and under) are effective in English, but those over 45 must be reached in Spanish.
“Imagine if I’m trying to sell an expensive car,” De La Hoz says. “Marketers will want to reach the American-raised children about the product, but the one who will make the purchasing decision is the parent. You need to reach them in both languages because the kids will get information in English, but when he goes to share an idea with his parents the dialogue would be spoken in Spanish.”
#b#So many flags#/b#. There is also no uniform way to reach Hispanics from different nations. De La Hoz says that communication struggles happen even between Hispanics.
“We came from 22 different countries and it’s hard because each has its own nuances,” he says. “My wife used to be uneasy when Domincian people would come to our business and speak with me because she thought they were screaming. But because my father is from the north coast of Colombia, I’m familiar with that tone.”
As more Hispanics grow up in the U.S. and Spanish is taught in schools, the communication aspect may be improved — but do companies benefit? De La Hoz tells businesses that hiring bilingual people is a good start, but not enough. “You can hirea Spanish speaker to work at the bank, but that person is not really able to bring in customers,” he says. “Sometimes the job doesn’t even allow you to fully interact with the community.”
De La Hoz says marketing messages may need to go through other ears first. He believes in the word-on-the-street approach, proliferated through the community by those beauty salons, restaurants, and taxi drivers. “Reach the talkers in the community, the ones who face more people in the day than anybody else. It’s important because it’s a cultural thing,” he says.
De La Hoz says the very best approach for non-Hispanic business trying to reach the Hispanic market is to use Latino small business owners who have already developed a relationship with customers. Point-of-sale information is needed by Hispanic customers, and small businesses can perform that task.
“They already accept services from us and the difference from large retail stores like Best Buy or Radio Shack is that nobody there will share with you the values of each product from the Latino perspective,” he says.
#b#Educating and adapting#/b#. In town or on the road, De La Hoz says his office is really his iPhone 4 and a MacBook. He writes a blog for the businesses he interacts with and he is well connected on Facebook, Twitter, and LinkedIn (where he’s in the “500-plus connections” club). One of the first things he does when he meets new Hispanic businesses is add their locations to Foursquare (a location-based software for mobile devices), and almost all of the time they were unaware that the technology exists and their location never came up before.
Aside from meeting clients face-to-face, De La Hoz frequents BNI networking meetings and carries a book of business cards with him in case he can immediately help a business owner by referring contacts. He believes three things Hispanic businesses need to survive are overcoming language issues, getting access to capital, and getting technological assistance. For the last, he helped the SBDC develop a class on how to use social media to promote your business after he took a similar course online two years ago.
De La Hoz comes from well-educated Colombian family. His father was a physician who also earned an MBA while his mother was a social worker. He’s the oldest of three boys; the middle son is an MBA, while his youngest brother was the first in the family to study in America, going to graduate school at Texas Pan-American University.
De La Hoz always had math skills and an interest in financial management, but he came to find his future career in the aftermath of a natural disaster. In November of 1985 his hometown of Manizales, Colombia, was ravaged by the volcanic eruption of Nevado Del Ruiz
The government then encouraged development in Manizales by eliminating taxes on the import of industrial machinery, and 76 national and international businesses were set up there during the period. But to locals, education was seen as a better answer. “In my city a few people decided to open a university focused on showing people how to open businesses,” he says. “The whole purpose was educating people to open businesses because we could no longer live off of coffee.”
At the college, Universidad Autonoma de Manizales, De La Hoz earned an undergraduate degree in finance. From 2000-’01 he completed a graduate program in management at Universidad de Los Andes in Bogota.
De La Hoz first visited America as a tourist in 1993, hoping to learn some English on his stay. His impression was that people could make more money here than anywhere else, a sentiment that he says many Hispanics concur with. Ten years ago he began working in his cousin’s accounting business, even on Sundays, and several realities hit him about living in the U.S. He realized he’d need to be financially conservative, so he made sure to establish his business before deciding to buy a home. He also learned a new word over here — networking.
“It was painful,” he says. “I didn’t understand the whole concept. I joined a group and learned how important it is to connect with people that will help you in the long run. It’s not going to happen overnight, it’s something where you need to develop each relationship.”