The Hispanic Small Business Boom
Economy, Demographics Make Surge Even More Pronounced Here

WASHINGTON (By Krissah Williams and Cecilia Kang, Washington Post) March 22, 2006 — Hispanics in the United States are opening businesses at a rate that is three times as fast as the national average, according to a report released yesterday by the U.S. Census Bureau.

Growth is even faster in the Washington area, where the number of Hispanic-owned companies has increased by 67 percent from 1997 to 2002, the most recent year available, reflecting both the region's vibrant economy and the surge of Hispanic immigrants to the region. The overall growth rate for new businesses in the region was 15 percent.

Compared with other major cities, the Washington region has a larger proportion of Hispanic-owned companies in professional areas such as high technology, legal, accounting, engineering and translation services. Analysts and businesspeople attribute that to the government's huge demand for professional services, the number of educated Hispanics who move here to work for embassies and international groups and businesses, and a growing number of second-generation Hispanics living here.

In 2002, 32,412 Hispanic-owned businesses were located in the District, its suburban counties and the surrounding area reaching to Baltimore and to West Virginia. The largest concentration of Hispanic-owned businesses is in Montgomery County, which has 7,405, followed by Fairfax, which has 7,302. Both counties have significant Hispanic populations. Growth in the District has been flat.

Nationally, there were nearly 1.6 million Hispanic-owned firms, still a small percentage of the 23 million individually owned businesses in the country. But Ying Lowrey, senior economist at the Small Business Administration's advocacy office, said minority-owned firms represent the fastest-growing segment of the nation's economy.

Asians are the largest sector of minority business owners in terms of number of businesses and employees, but Hispanics and African Americans are starting businesses at a faster rate. "The contribution of minorities to the economy is tremendous," Lowrey said.

Hispanic immigrants "want to go into their own business as soon as they can leave their day jobs after saving enough money," said Michael Veve, a Washington lawyer who consults with small-business owners who want to do business with the federal government. "They seem to have a very clear perception that they can do better financially in their own businesses."

Of the Hispanic-owned businesses in the Washington region in 2002, 8,593 were construction companies, 4,947 were administrative and cleaning firms, and 4,079 were professional service businesses.

Hispanics in the District and its suburbs have launched scores of government-contracting companies that get business through the federal program that sets aside work for small and minority-owned businesses. In Maryland, 13.1 percent of Hispanic-owned business were professional, technical or scientific services firms. In Virginia, that portion was 10.7 percent, and in the District those companies constitute 22.8 percent. The concentrations are larger than the national average of 8.8 percent and those found in metropolitan areas that are hubs for Hispanic residents, including Los Angeles, Houston and New York.

Fernando Galaviz started his Arlington-based systems integration company in 1988. Through an acquisition and the 8A small-business and minority program, which assists businesses owned by U.S. citizens, the native of Mexico City was able to win work that turned his company, Centech Group Inc., into a thriving government contractor with $71 million in revenue and 367 employees.

"The government is the marketplace here, and you'll see lots of Hispanic and other minority-owned companies that have started to support the high-tech requirements and engineering and scientific requirement that the federal government is demanding," said Galaviz, a former director for the Commerce Department.

Many Hispanic entrepreneurs have been arriving in the region since the late 1980s, said Michel Zajur, president of the Virginia Hispanic Chamber of Commerce. Those business owners and their successors have followed the region's Hispanics to the suburbs to avoid the steadily rising cost of real estate in the District.

Immigrants are often more willing to take the risk of using their savings to launch a business, he said, hence the huge number of new immigrant-owned businesses. "When you come here as an immigrant, you are taking a chance, and that is what starting a business is all about," Zajur said.

Many are like Jose Merino, who came here from El Salvador with no money. Almost immediately, he began working, shoveling snow off sidewalks in Alexandria. For years, Merino and his family worked at maintenance jobs, stashing away as much money as they could. Two decades later, with the help of his wife, children and brother, Merino bought a food truck where he and his wife sold pupusas and carnecitas to players of a Sunday Salvadoran soccer league. In 1999, they opened a restaurant. Now they have three restaurants: El Pulgarcito in Alexandria and Woodbridge and Las Americas in Falls Church.

"I never dreamed I could have this much," Merino said. "It was very difficult, but it can be done."

Most Hispanic businesses are even smaller than Merino's. Nationally, only 12 percent have paid employees. Many face obstacles, such as language barriers, said Daniel Flores, president of the Greater Washington Ibero American Chamber of Commerce, the region's oldest Hispanic business group.

Patricio Carrera spoke no English when he immigrated here five years ago from Ecuador, where he was a journalist writing about his country's justice system. He arrived in Montgomery County without a visa or authorization to work. So, despite his education, he took the first job he could find, which was as a landscaper. He later found work as a painter. At one of the work sites where he was employed, a property owner pulled Carrera aside and offered him a contract to fix up an apartment complex in Annapolis.

Carrera, who is applying to be a permanent resident, got a tax ID number, formed ARPI Construction and contracted a team of workers to do the job.

"I have a little suerte ," he said, using the Spanish word for luck.

When that contract ended, Carrera began taking small construction jobs and started a slew of side jobs -- freelance writing for a local Spanish-language publication, studying to be a loan officer at company targeting Hispanics. He also works as a DJ at a Latin nightclub in Silver Spring.

"To do business here, you just need your mind and vision and desire," he said.