Addressing Disparities in Finance for Hispanics and Latinos

Source: https://tinyurl.com/2p9cy4jp

By: Vianessa Castaños |

 

One of the most significant social issues facing Latinos in America is the myriad obstacles preventing them from building a secure financial future. These financial disparities begin with high-interest lending services, insufficient credit history and higher than average student loan debt, among other factors.

The effects of these disparities appear in the demographics of rental and homeownership rates in many areas. While the homeownership rate among Hispanics increased by 47.5% since 2019, many younger Latinos find that their path to homeownership and financial security are hindered by monthly student loan repayments, which in turn prevents many of them from being able to build up their savings. Meanwhile, other more vulnerable members of the Latino community, such as immigrants and non-native English speakers, face challenges with predatory lending practices and unfavorable financing options.

5 Financial Barriers and Solutions

There are a number of obstacles that prevent the Hispanic and Latino community from being able to grow their savings and achieve their financial goals. Learning to save, predatory lending practices and poor or insufficient credit history are just some of the major barriers that prevent the community from reaching financial stability. And when each of these factors compound, many find themselves in a situation where they are unable to invest their money and create generational wealth.

1. Learning How to Save and Make Investments

Many Latino immigrants are unbanked, meaning that they don’t rely on financial institutions to deposit and save money. This practice stems from a lack of distrust in the financial institutions in their home countries, coupled with a lack of financial education in general. It’s also common for individuals to put their funds toward caring for family members or supporting their children through school rather than saving for their own retirement. And while many Latinos are responsible with their finances, they lack money mentors within their communities who can teach them how to properly plan for retirement or provide guidance on making financial investments.

BEST OPTIONS TO MANAGE SAVING AND INVESTING

If available, take advantage of your employer-sponsored 401(k) or brokerage account. Also, consider an additional savings vehicle, such as an individual retirement account (IRA), Roth IRA or certificate of deposit (CD), which is a type of low-risk federally insured savings account.

2. Predatory Lending Practices

The Hispanic and Latino community can often have limited access to financial literacy materials, which means the community can be left without the tools necessary to manage finances and build up savings. Limited access to resources coupled with the potential financial implications of maintaining a commercial bank account can push individuals to rely on predatory alternative financial services that may be mortgage scams, which can charge upwards of 400% APR. In 2017, people who relied on alternative financial services such as payday loans, check cashing services and rent-to-own stores ended up spending more than $173 billion in fees and interest charges.

BEST OPTIONS TO MANAGE PREDATORY LENDING PRACTICES

Whenever possible, seek out a commercial banking institution and avoid or limit the use of products that do not actually help you build your credit, such as prepaid credit cards. While you may think that you are banking with an accredited institution, many alternative “banking” entities charge above-average interest rates. They may not carry insurance, thereby putting your investment at risk while at the same time doing nothing to help build your credit-worthiness.

Juntos Avanzamos works with a network of 108 credit unions in 26 states that serve to empower Hispanic and immigrant communities. These credit unions will work with you to open a checking or savings account and establish your credit, even if you don’t have a social security number.

3. Limited Access to Credit and Low Credit Scores

The median FICO credit score for Hispanics was 684 in 2018. Compare that to 742 for non-Hispanic whites and 722 for the overall population. You can get a picture of the discrepancy between each demographic. These lower credit scores can be attributed to limited access to credit-building opportunities as well as limited knowledge and access to information on how to build and maintain a healthy credit score. And because credit-worthiness is taken into account when qualifying for loans and mortgages, aspiring Hispanic homeowners can often find their options for financing a new home limited, or they are unable to secure a conventional home loan or down payment altogether.

BEST OPTIONS TO MANAGE LIMITED ACCESS TO CREDIT AND LOW CREDIT SCORES

The first step to improving your credit score is getting a copy of your credit reports from the three nationwide credit reporting companies — Equifax, Experian and TransUnion. You can easily do this by using an online credit report, like a credit report from Central Source LLC, which grants you access to all three credit reports for free once a year. By knowing your credit score isn’t enough, you’ll also want to understand what that score means, which is where the list of consumer reporting companies from the Consumer Financial Protection Bureau can help. The website offers a broad range of financial education materials in nine languages on topics ranging from how to rebuild your credit to how to get a home loan, all available for free.

4. High Cost of Buying a Home Relative to Income

Because Hispanic populations tend to be more concentrated in high-cost markets, the homes Hispanic and Latinos buy are valued at lower than median market rates. But they are more expensive overall relative to their income level. While the majority of Hispanics finance their homes through traditional methods, they disproportionately have to rely on FHA insured mortgage loans. These loans often end up being costlier and can negatively impact lifetime wealth-building potential. Another instance in which Hispanics and Latinos can find themselves in a high-cost market is due to gentrification. Real estate appreciation can often lead to displacement and sees many families priced out of their own communities. Gentrification drives up housing costs and demand for low wage workers, who then, in turn, cannot afford to buy homes in their very communities.

BEST OPTIONS TO MANAGE HIGH COST OF BUYING A HOME RELATIVE TO INCOME

Down payment assistance programs exist to help homebuyers find loans and grants that can help drive down the cost of your potential down payment. These programs are typically meant for first-time homebuyers, but depending on the program, some exceptions can be made. You can also contact local community organizations in your state to inquire about homebuyer education programs that can teach you what to expect when buying a home — from how to select a mortgage to how to negotiate the selling price.

5. Student Loan Debt

Many Latinos are first-generation college students who are left to navigate higher education costs without much guidance. And while there are options for financial aid for Hispanic students available, 72% of Latino students take on student loan debt in order to attend university. In fact, 12 years after starting college, the median Latino student borrower still owes 83% of their initial loan. This debt affects their ability to save money well into adulthood, which is further compounded when they become delinquent or default on payments.

BEST OPTIONS TO MANAGE STUDENT LOAN DEBT

This financial literacy handbook is a great place to start learning about managing your money and navigating major expenses. Also, check out The Hispanic Center for Financial Excellence — it offers free financial education services and can teach you how to reduce your debt and develop a savings strategy.

Expert Insight on Navigating Financial Constraints

What are your own observations about the financial disparities within the Latino/Hispanic community? Why do you think these disparities exist?
Student loan debt is seen as a major barrier to financial security for many. Can you offer any advice on how to tackle (or avoid) student loans?
What are some tips to start saving and develop a strong relationship with money for Hispanics and Latino?
What are the best ways for Hispanics and Latino to get educated on finances? Are there any specific resources you recommend?

Financial Resources for the Hispanic and Latino Community

There are many resources available to help in your journey to financial success. From debt management programs to scholarships and mortgage financing assistance, these organizations and programs can help you get ahead.

Financial Services and Programs

Latino Educational Fund: LEF’s financial literacy courses provide Latinos with the knowledge they need to make informed decisions about their futures and their families’ futures related to banking, credit, bankruptcy and mortgage lending.
Fuente Credito: Fuente Credito, a small-dollar credit pilot program coordinated by UnidosUS, facilitates access to affordable loans. It offers an online credit application designed to provide fast and personalized options for immigrants who need assistance in financing immigration fees related to Deferred Action for Childhood Arrivals (DACA), citizenship or other legal services.
FDIC Money Smart: Money Smart offers a Spanish-language financial education program to help individuals improve their financial health.
Free Financial Literacy Course: This six- to 10-hour course from Alison concentrates on the basics of personal finance. From budgeting and saving to debt management and retirement planning, this class aims to improve your overall financial literacy to ensure you can manage your today and plan for tomorrow.

Technical Tools, Apps and Assistance

Mortgage Calculator: MoneyGeek’s simple and free mortgage calculator helps you estimate your monthly mortgage payment with the principal and interest components, property taxes, homeowner’s insurance and HOA fees. Once you input the numbers, you’ll see a detailed mortgage payment schedule.
Mission Asset Fund: MAF offers loans to help individuals cover their immigration expenses; part of the process includes a financial education course. You can download their app to track your progress, review your loan and track your payment history and credit score.
Mint: Mint is a budget tracker and planner that helps you easily manage your finances. One feature that makes this app so appealing is that it allows you to track your credit score for free.

Professional Organizations

Association of Latino Professionals in Finance and Accounting (ALPFA): The ALPFA provides professional development and career-building opportunities for Latinos. They partner with several educational institutions to help educate Latino leaders in finance.
Hispanic Heritage Foundation: The White House founded the Hispanic Heritage Foundation in 1987. It offers a series of free podcasts and videos focused on money management, debt management and wealth mindset, along with programs to promote leadership and education within the Hispanic community.
Congressional Hispanic Caucus Institute (CHCI): CHCI provides leadership, public service and policy experiences to Latino students and young professionals.
American Society of Hispanic Economists: This professional association of economists is focused on addressing the under-representation of Hispanic Americans in the economics profession. Its work centers on researching policy and economic issues affecting Hispanics in the U.S.
National Organization for Hispanic Real Estate Professionals (NAHREP): The NAHREP work to champion homeownership in the Hispanic community. They are advisers and advocates who are available to help Hispanic families create generational wealth.
United States Hispanic Chamber of Commerce (USHCC): The USHCC promotes the economic growth and development of Hispanic businesses. It provides support to small and minority-owned businesses.
The Hispanic Institute: The Hispanic Institute manages several ongoing projects, including the study of Hispanic economic contributions, media monitoring, consumer fraud protection, citizenship education and technology and telecommunication research.
New America Alliance: This organization of American Latino business leaders promotes the Latino community's economic advancement, focusing on economic and political empowerment and public advocacy to improve the quality of life in the United States.

Advocacy Organizations

UnidosUS: Formerly known as NCLR, Unidos serves the Latino community through nearly 300 affiliates throughout the country. It provides advocacy in civic engagement, civil rights and immigration, education, workforce and the economy, health and housing.
Mission of the League of United Latin American Citizens (LULAC): LULAC is to advance the economic condition, educational attainment, political influence, housing, health and civil rights of the Hispanic population of the United States.
Hispanic Federation (HF): Established in 1990, HF is a nonprofit organization to support the Hispanic community, families and institutions. Its work includes education, health, immigration, civic engagement, finances and the environment. HF offers advocacy services, community assistance programs and capacity-building opportunities.

Community Support Groups

Healthy Hispanic Living (HHL): HHL fosters wellness and quality of life for Hispanics by focusing on all aspects of health — physical, mental, financial and societal. It works to include issues and concerns the community faces from a cultural perspective.
Arte Sana (Art Heals): Arte Sana is a nonprofit organization dedicated to eliminating sexual and gender-based violence. It offers cyber advocacy and survivor activism, prevention and survivor empowerment through art, and training courses on sexual assault in Spanish and English.
National Compadres Network: The National Compadres Network is an organization that works to decrease issues such as domestic violence and child abuse, substance use, gang violence, racial inequity, teen pregnancy and issues around heterosexism. Its goal is to enhance and re-root individuals, families and communities by honoring, rebalancing and redeveloping their traditions, values, practices and identities.

Housing Resources

U.S. Dept. of Housing and Urban Development (HUD): HUD offers housing counseling to help consumers make informed housing decisions. HUD works with organizations, such as UnidosUS, in developing and supporting Latino homeownership programs in various states across the country.
Homeownership Assistance Programs: MoneyGeek’s very own guide to help you better understand the homeownership process. Here, you can find information on grants, loans and home purchasing programs.
Federal Housing Administration (FHA) Loan Requirements: This MoneyGeek guide provides educational resources to educate home buyers about FHA, VA and USDA government-insured mortgage loans.

Scholarships and Financial Aid

Scholarships for Hispanic Students: MoneyGeek offers a full, comprehensive guide to finding scholarships and resources for Hispanic students.
Hispanic Association of Colleges and Universities (HACU): HACU is an advocate for Hispanics in higher education and offers a number of resources, including a scholarship resource list.
TheDream.US: This is the largest college access program for DACA recipients and undocumented students. They offer scholarships to those who do not qualify for federal financial aid or in-state tuition due to their residency status.
FAFSA: The Free Application for Student Financial Aid (FAFSA) is a U.S. Department of Education service for applying for federal financial aid for students.

Health Resources

Medicare Advantage’s Latino Health Resource Guide: Medicare Advantage compiled this resource guide for Latinos and Hispanics to find health care providers by state and categories, such as dental, senior care and caregiving, substance abuse and mental health. This guide is available in Spanish and English.

About the Author

Vianessa Castanos formerly worked as a scriptwriter and producer for personal finance adviser Ramit Sethi of I Will Teach You to be Rich. She is also a culture & lifestyle writer who specializes in issues pertaining to the Latinx community in the U.S. and abroad.

STC Consulting certified to do business with the Port of Houston

"Among the many partnerships formed in 2021, one community leader was able to make a significant connection that thrust her business to a new level. Founder and CEO of STC Consulting, Soledad Tanner joined forces with the Port of Houston as she became certified to do business with one of the world’s largest ports on the Gulf Coast. “The process of getting certified as a Minority Business Enterprise (MBE) and Women Business Enterprise (WBE) was step by step, easy to follow. I was already certified by the City of Houston, which is one of the accepted certifications,” Tanner said".

The partnership was not only a strategic move, but it created a whole new world of opportunities for her thriving company whose firm helps improve the profit and productivity of businesses. “The Port of Houston is a massive and strategic engine of our local economy. The potential of working with them on future procurement opportunities is a life-changing event, not only for my business but for so many local businesses,” Tanner shared. 

As the community continues to navigate through unchartered waters in the coming year, one thing is certain, the Houston East End Chamber of Commerce will continue to be a changemaker leading the way for more members to form partnerships highlighting the camaraderie and determination of neighbors coming together to help one another. We invite you to become a member and allow us to help you connect with other businesses and grow in 2022". 

(pag 12 & 13 on pdf file)

 

Good News For Minority-Owned Businesses: Community Banks Get First Crack At The New Round Of PPP Loans

Soruce: https://tinyurl.com/y3hgvm83

Written by: Brian ThompsonSenior Contributor
Personal Finance
JD/CFP® helping LGBTQ entrepreneurs thrive in business and in life.

LARGO, MD - FEBRUARY, 08: (L) Louvenia Williams, esq owns Corporate Title, Inc. She's doing the ... [+] THE WASHINGTON POST VIA GETTY IMAGES

The Paycheck Protection Program (PPP) reopens tomorrow, but it won’t offer the same edge to big, well-financed businesses as the first iteration did. You might remember the uproar over some very large businesses—with plenty of other sources of liquidity—swooping in to claim PPP money. This time, to promote access to capital, initially only community financial institutions will be able to make First Draw PPP Loans on Monday, January 11, and Second Draw PPP Loans on Wednesday, January 13. Then PPP will open to all participating lenders shortly thereafter. Let’s talk about why this change is happening and how to take advantage of the change if you’re one of those borrowers.

The first round had problems

The initial rollout of PPP was a mess, and it’s easy to see why. The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 27, 2020, allotted $349 billion for the Paycheck Protection Program. Eligible business, the self-employed, sole proprietors, freelance and gig workers were all welcome to apply. Many rushed to take advantage of favorable features including no personal guarantees or collateral required and payments deferred for six months. Best of all, part of the loan could be forgiven and not counted as income as long as the money was spent on certain operating expenses during the first weeks after origination.

On Tuesday March 31st, Treasury Secretary Steven Mnuchin announced that “Treasury and the Small Business Administration expect to have this program up and running by April 3rd so that businesses can go to a participating SBA 7(a) lender, bank or credit union, apply for a loan and be approved on the same day.” That gave banks four days to set up a brand-new system that would allow small businesses to apply for a loan and be approved in the same day.

Four days turned out to be too fast, and chaos ensued. Just hours before the April 3rd start date, banks began notifying customers that they wouldn’t be ready for the deadline. Then when the program got going, big banks allotted scarce funds to their best customers and faced lawsuits over the way they handled the rollout. The self-employed, sole proprietors, freelancers and gig workers were locked out for the first week—a big problem when the initial funds were exhausted in less than two weeks. Many aspects of the program had to be clarified on the fly. So far there have been almost 30 Interim Final Rules and 11 pages of Frequently Asked Questions.

Shortly after the initial funds ran out, Congress allocated an additional $320 billion to the program. By the beginning of May, the program had made over 2.5 million loans with a total value of $187.1 billion—about 60% of the funds available in round two. And by the initial end of the program, PPP had 5.2 million loans worth $525 billion to America’s small businesses, supporting an estimated 51 million jobs. According to SBA data more than 87% of the loans were $150,000 or less, with an average loan size of $101,000. Additionally, the SBA says 27% of the funds went to low- to moderate-income communities.

Despite the program’s progress, PPP still had a huge problem. Initially, an April 6th report from the Center of Responsible Lending (CRL) found that roughly 95% of Black-owned businesses, 91% of Latino-owned businesses, 91% of native Hawaiian or pacific Island-owned businesses, and 75% of Asian-owned business “stand close to no chance of receiving a PPP loan through mainstream bank or credit unions.”

A later Brookings Institution report showed that:

• On average it took 31 days for small businesses with paid employees in majority-Black ZIP codes to received PPP loans — seven days longer than those in majority white communities.
• For non-employer businesses, the loan delay between majority-Black and majority white neighborhoods grew to nearly three weeks.

Brookings points out that “This delay is particular acute because, according to the JPMorgan Chase Institute, in at least 90% all majority-Black and majority-Latino or Hispanic neighborhoods, a majority of small businesses have cash buffers of less than three weeks, compared to only 35% of majority-white neighborhoods.”

Minority-owned firms have been shut out for a variety of reasons. They’re less likely to have a relationship with lending banks. Their owners may not have access to financial and legal expertise. Even after the government expanded participation to FinTechs and community banks and set aside $60 billion explicitly for community finance institutions, minorities got less than their share. Brookings noted that Black business owners were more likely to be denied PPP loans compared to white business owners with similar application profiles due to outright lending discrimination.

Why this is important

This is not the first time communities of color have been left out of sweeping government reform. In fact, it’s happened repeatedly Reconstruction after the Civil War to The New Deal during the Great Depression to The Great Recession of 2008. The book The Color of Money: Black Banks and the Racial Wealth Gap by Mehrsa Baradaran, takes a deep dive into the history of discrimination in federal programs. The author demonstrates that “the hand that drives black poverty is not a natural and invisible one, but rather the coercive hand of the state that has consistently excluded black from full participation in American capitalism.”

I’ve written about the Racial Wealth Gap before, but these statistics are worth repeating

• The financial crises of 2008 wiped out 53% of total black wealth
• Today, black families have a median net wealth of $17,150 compared to a white family’s median of $171,000. The median net worth of Latino Households was $20,720.
• The wealth gap exists at every income and education level. On average white families with college degrees have over $300,000 more wealth than black families.
• Moreover, studies reveal that the gap is accelerating — over the last 30 years, the average wealth of white families has grown at three times the rate for the average black family.

Discrimination doesn’t just affect black and Latino families. In the past, California passed laws against Japanese businessmen after they became economically success. Native American had their land taken away when oil was discovered on it.

Small businesses have been touted as the backbone of the U.S. economy. Additionally, the racial wealth gap is much less significant for entrepreneurs than for any other sector of the population. Yet an October 2020 Main Street Alliance and Color of Change poll found that almost half of Black-owned small business have shut down already or will soon.

What it’s like now

Funds in the next round of PPP are limited, as they have been in previous rounds. Congress has approved $284 billion in new loans, and the deadline to apply is March 31st, 2021. Now that forgiveness and tax rules are clearer, the money is likely to go much faster. The Trump administration expects that this new round of funding will be sufficient to meet demand, but we’ll see.

The SBA is taking steps to ensure the hardest hit communities don’t miss out as they did last time. Small Business Administration (SBA) Administrator Jovita Carranza said the new “guidance builds on the success of the program and adapts to the changing needs of small business owners by providing targeted relief and a simpler forgiveness process to ensure their path to recovery.”

Some of those steps include:

• Accepting PPP loan applications only from community financial institutions or at least the first two days when the PPP loan portal reopens
• Direct Lender Match borrower inquiries to small lenders who can aid traditionally underserved communities
• Match small businesses through Lender Match with Certified Development Companies (CDC), Farm Credit System lenders, microloan intermediaries and traditional small asset size lenders.

In its guidance, the SBA called upon its lending partners to “redouble their efforts to assist eligible borrowers in underserved and disadvantaged communities.” Some questions still exists, however, of whether institutions that have been enlisted in offering a head start will actually be ready. We may end up with a situation as we did last April where the desire to start the program doesn’t match reality.

Next steps

If you happen to be in one of these underserved and/or disadvantaged communities, now is your chance to make the most of this program before the program funds run out. Here are a few steps that you can take to make the most of this opportunity.

Get educated on the program updates

• The Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act provides key updates to the PPP program including:
• PPP borrowers can set their PPP loan’s covered period to be any length between 8 and 24 weeks to best meet their business needs;
• PPP loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs, and worker protection expenditures;
• The Program’s eligibility is expanded to include 501(c)(6)s, housing cooperatives, direct marketing organizations, among other types of organizations;
• The PPP provides greater flexibility for seasonal employees;
• Certain existing PPP borrowers can request to modify their First Draw PPP Loan amount; and
• · Certain existing PPP borrowers are now eligible to apply for a Second Draw PPP Loan.

Additionally, you’re generally eligible for a Second Draw PPP Loan if you:

• Previously received a First Draw PPP Loan and will or has used the full amount o for authorized uses;
• Have no more than 300 employees; and
• Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.

I’ve written in more detail on the updates for small businesses here, here and here. Take time to figure out if and what you’re eligible for.

If you have not applied for loan before, look for a community lender including a Community Development Financial Institution, Minority Depository Institution, certified development company or microlender intermediary. In addition to finding them online, the SBA offers a Lender Match program that can match you with smaller lenders who can aid traditionally underserved communities. You can also ask a local SBA district office for assistance.

Do yourself and your lender a favor by reviewing the application for First Draw Loans and Second Draw Loans and getting as prepared as possible.

Don’t delay

Your head start is only a few days, so don’t delay. Take advantage of this opportunity while you have it. Additionally, spread the word to your fellow entrepreneurs.

This effort is just the beginning in the much-needed work to equalize access to business ownership and support. This moment provides an opportunity for us to explore and take significant steps towards fixing a monumental problem.

Everything You Need to Know About the Second Round of Paycheck Protection Program (PPP) Loans

Source: https://tinyurl.com/y6ng2zdm

The State of Women Business - Houston

 Source: www.sba.gov

10 Tips to Start Your Business with Little Money Down

 Source: www.tnraccounting.com

Guía del importador en Estados Unidos

 

How to grow your business in Houston

State of latino entrepreneurship 2019

5 keys to building a scalable business. What is scalability in business? 5 keys for success + 3 business organization tools.

Source: https://tinyurl.com/y77vq8mr

Written by: Jeanette LeBlanc

Tips on scaling a business:

1. build a solid foundation
2. focus on scalable business solutions
3. embrace strategic planning
4. focus on your core strengths
5. be patient

If you are like most small business owners, you started really, really small. Probably just you, your laptop, and an idea.

Now growth is on your mind. Maybe you’re impatient and chomping at the bit to get to the next step, or maybe you’re scared and holding back. Either way, most small business owners have dreams that are bigger than their current reality.


The problem is, when the day to day of small business ownership can be so overwhelming, it’s tough to know what you should be doing now to ready your business for a successful future. What is scalability in business and what are your limitations? An understanding is fundamental to your success.


“We all feel some level of impatience that our businesses are not growing fast enough. Every time I look at the latest iteration of my DIY website or the stack of big ideas still in the to-do bin, I think ‘man, I’m so not where I want to be yet!’ But the beautiful thing about being in business for yourself is that you get to direct your own evolution. And allowing that evolution, however organic or stunted it may feel in the moment, is a stellar strategy in itself. Like a conductor with a symphony, you learn the rhythms and movements over time. You’ve got to grow at your own pace and feel out the bumps along the way.”
—Amy Birks, The Strategy Ninja


So, how do you build a scalable business? Follow these five keys for business scalability success:

5 keys to building a scalable business

True scalability in business allows for expansion and revenue growth while minimizing increases in operational costs. Even if you’re not ready to grow right now, there are things you can do to set yourself up for scalable growth and success.

1. Build a solid foundation

Right now—while your business is small—is the perfect time to invest your time and energy in foundational systems that will allow your small business to grow into a much larger entity. These systems and processes can help you avoid the painful (and expensive) growing pains that can hit when you’re not prepared.

Having robust systems—such as a solid CRM or powerful e-commerce software—can help you untangle the web of time-consuming details and free you to focus on the parts of your business that will drive growth and expansion. Automation is the small business owner’s friend.

Review your business to see what aspects are repetitive or monotonous and make it your ultimate goal to automate them as much possible so that your attention remains focused on growth-related activities.

2. Focus on a scalable business model

In the early days it can be tempting to go with the quick (or cheap) fix. Money, time, and expertise can be in short supply, and investing in basic solutions that don’t require a huge financial investment or learning curve can seem like the wisest solution. Resist the temptation to slap together a myriad of inexpensive and inadequate options and think ahead to what will serve your business best in the future. A forward-thinking mindset can help you avoid a common small business trap: a patchwork maze of systems that just aren’t getting the job done.

Think as the owner of a business 10 times larger than your current reality. Choose solutions that will serve what is AND what may come: quality over quantity.

Simran Thadani, the executive director of Letterform Archive, a nonprofit organization that has a library of typography and design elements, has a few tools up her sleeve that helped her achieve scalable growth:

1. Trello: Imagine digitizing your wall of sticky note to-do lists. That’s basically what you get with Trello. Using the app, you can create note cards that you can put on lists and then move them around by clicking and dragging them. Trello gives you a flexible, interactive, collaborative tool with which you can chart out anything from team roles on a specific project to your company's 18-month road map. You can also use it to simply to track your to-do list.
2. Gusto (formerly Zen Payroll): This app allows companies to manage payroll and benefits in one solution. Plus, when employees receive their first paychecks, the app says, "Hey, you've just been paid. Isn't today a beautiful day?" with a picture of butterflies and flowers.
3. Google Ventures Design Sprint: A word of advice from Thadani: “Slow down to scale up.” The sprint begins with quiet time to brainstorm. Employees are told there are no bad ideas, then asked to write everything they think of down on a sticky note and stick it up on a wall
   This helps to eliminate one voice dominating, or dead silence from all.
   
   People then use stars or tallies to vote on their favorite ideas. Generally, you’ll find that it’s not just one person with all the good ideas. Typically, all parts of the company will be represented, and all employees have ideas worth contributing.
   
   Next, you talk about validating the idea, asking the team: Why did you choose this idea? Why did this idea have three stars and the next had five? What's the best way to pursue the idea? From there, you can prototype the idea. The exercise brings tremendous validation—not just of the best ideas, but of the people who brought up those ideas.
   
   The frequency of your sprints depends on how frequently you feel you need to iterate on something new, whether it’s to improve a process or come up with a new idea from scratch. The design sprint works in a range of different situations. Bt you don’t want to rely on it as a crutch, like going back to the drawing board because it didn’t work. Take the time you need, but don’t get stuck in too many meetings. Use the sprint to figure out the path to the next idea. Iterate from where you’re stuck. Be confident in the good ideas you’ve had thus far, and then take things from there.

3. Embrace strategic planning

Strategic planning is the link between a great idea and true success and growth. More a philosophy of operation than a one-time event, it requires ongoing attention to detail and an investment of time. Knowing your business inside and out can prepare you to deal with challenges and prepare you for opportunities to scale.


"When you take the time to define where you’re going, you can develop a plan, stay on course, make adjustments as needed and reach your destination."
—Keap CEO Clate Mask

Develop a series of quarterly and annual priorities, a mission that sets the tone for the next three to five years of operation and a BHAG (Big Hairy Audacious Goal) to keep you reaching for success.

4. Focus on your core strengths

You can’t be everywhere. Focusing on your core strengths and hiring or outsourcing the rest of the tasks associated with running your small business is essential to a scalable business. Concentrate on working on your business instead of in your business; scalable business owners are experts at leveraging outside resources. Build a staff or team of freelancers to do what they do best so you can concentrate on letting your own native genius work its magic.

5. Be patient

Rome wasn’t built in a day. Good things come to those who wait. Patience is a virtue.

Cliché or not, there’s a reason these little gems of wisdom are so pervasive. In your small business, patience is just as important as it is in the rest of life. Take the time along the way to maximize the systems, processes, and people you rely on to make your operation a success so that when opportunities present themselves, your business is ready to grow.

Remember, a path of slow and steady growth is much more sustainable–and scalable–in the long run.

Startup vs. Small Business: What’s the Real Difference?

Source: https://www.fundera.com/blog/startup-vs-small-business

Written by: Emily Kate Pope

Startup vs. Small Business: The Main Difference

While the difference between a startup and a small business is subjective, it often comes down to the company’s growth goals and revenue forecast. Startups focus on disrupting markets and driving top-line revenue at a fast pace. Small businesses, on the other hand, often set their goals on long-term, stable growth in an existing market.

If you work in the tech industry, you’ve probably heard the term “startup” thrown around a lot. Especially if you live in a tech hub like Silicon Valley, Hong Kong, or New York. You probably even know a few people building their own startup—if you’re not building one yourself!

Despite the fact that hundreds of thousands of new startups are established every year in the US alone, many people still don’t understand the difference between a startup vs small business—and trust me, the two are very different. To distinguish these two organizational entities, let’s take a deeper dive into the definition of a startup.

What Is a Startup?

For years, investors treated startups as smaller versions of large companies; this was problematic because there is a vast ideological (and organizational) difference between a startup, small business, and large corporation, which necessitates different funding strategies and KPIs.

According to serial entrepreneur and Silicon Valley legend Steve Blank, a startup is a “temporary organization designed to search for a repeatable and scalable business model.” A startup, which he argues in the context of the tech industry (and this conversation) should be short for “scalable startup,” is searching to not only prove their business model but to do so quickly, in a way that will have a significant impact on the current market. Which brings us to our first major difference between a startup vs small business.

A “Scalable” Startup Has The Intent To Become A Large Company

The first real difference between a startup vs small business is really the growth intent behind the business.

As Blank describes it, a scalable startup founder doesn’t just want to be her own boss; she wants to take over the universe. From day one her intent is to grow her startup into a large, disruptive company. She believes that she has come across the next “big idea,” one that will truly shake up the industry, take customers from existing companies or even create a new market.

This stance is in stark contrast with the definition of a small business, which the U.S. Small Business Administration (SBA) describes as “independently owned and operated, organized for profit, and not dominant in its field.”

A small business owner might be starting a business that they believe solves a gap or provides a service within an existing market—one that will provide steady, long-term revenue.

Therefore, the driving force behind the two business models is different: The intent of the startup founder is to disrupt the market with a scalable and impactful business model; whereas the intent of the small business owner is to be her own boss and secure a place in the local market.

To be sure, the latter is the prevailing model of entrepreneurship in the United States: grocery stores, delis, hair salons, plumbers, electricians, etc. and their contribution to the local economy cannot be overstated. Small businesses (those businesses with fewer than 500 employees) employ over 40 million workers.

However, for better or for worse, the ultimate motivation behind a small business is fundamentally different from that of scalable startup.

A Startup Is Temporary

Another major difference between a startup and a small business? How long it plans to exist.

The organizational function of the startup is to search for a repeatable and scalable business model. According to Blank, this means that a startup founder has three main functions:

1. To provide a vision of a product with a set of features.
2. To create a series of hypotheses about all the pieces of the business model: Who are the customers? What are the distributions channels? How do we build and finance the company, etc.
3. To quickly validate whether the model is correct by seeing if customers behave as your model predicts (which he admits they rarely do).

Given this definition, it stands that once a business model has been proven the function of the organization must shift to produce outcomes and execute said model; in many cases removing the agility and innovation that once existed in the early days of the business.

A Startup Is Funded Differently

While both a startup and small business will likely start with funding from the founder’s savings, friends and family, or a bank loan; if a startup is successful, it will receive additional series of startup funding from angel investors, venture capitalist, and (if it’s lucky) with an initial public offering (IPO). With each series of funding, the startup founder gives up a piece of her company–this is called equity, and everyone who has it becomes a co-owner of the company.

Eventually, a startup may cease to exist as an independent entity via a merger or business acquisition. To a small business owner, relinquishing control would defeat the purpose of running their own business; however, for the startup it may be necessary to sustain seemingly infinite growth.

Although a startup vs small business are still run by entrepreneurs (small business owners or not); the intent, primary function, and funding of their respective business model’s are radically different. Watch Steve Blank describe the difference further in the video below.

A Startup Assumes a Lot of Risk

A startup is trying to see if their vision of a product or service does indeed disrupt a market. Though lots of research and time go into the pre-launch of a startup, entrepreneurs are essentially making an educated bet that their idea is going to have traction in the market. Oftentimes, it doesn’t. Investing your time and money into a startup is a huge risk.

That’s not to say small business owners don’t assume any risk either. In fact, 20% of small businesses fail in their first year—though small business failure is often a result of cash flow management and funding. But with a small business, there’s less of a risk that the business idea won’t have a fit in the established market.

Why The Coronavirus Pandemic Should Motivate You To Start A Company And Eight Excuses That No Longer Matter

Written by: Bernhard Schroeder
Spource: https://tinyurl.com/ybuz78h5

What were you born to do? Were you born to be an accountant, a marketer or a project manager? Probably not. And who started the company that you are working for? The people that started the company at some point became entrepreneurial and asked themselves, “Why am I working for this person or company?” So, is this the right time for you to start a company?

Just like Uber, Slack, Square, WhatsApp, and Instagram were created coming out of the last recession, there will be many innovative companies spawned from this coronavirus pandemic. Quite a few talented people are being furloughed and, like you, they might be re-examining what they really want out of life. And there is reason to be optimistic. The good news is that more people are now actively seeking to become entrepreneurs. A new report from the Global Entrepreneurship Monitor (GEM), sponsored by Babson College and Baruch College, finds that 27 million working-age Americans, nearly 14%, are starting or running new businesses. And Millennials and Gen-Z are driving higher interest in entrepreneurship as 51% of the working population now believes that there are actually good opportunities to start companies. So, why haven’t you considered starting a company?

There are several reasons for you not being more entrepreneurial but none of them are valid. Start to identify what is holding you back by examining and then mitigating the reasons/excuses listed below.

Fear of failure. While starting a business could be risky, so is thinking that you will have a company(s) that will take care of you and offer you employment for 30 years. Nothing in employment is guaranteed, you have to perform and get better at whatever you do or you will be replaced. Well, if that’s the case, that sounds riskier then starting a company where the control is in your hands. Life is an adventure, working for someone else for 30 years is not.

Few resources to start a business. People like to believe have little to no money to start a business. They also do not know where to find the capital they need to start a business. So even if they want to start a business, the lack of capital is a huge stumbling block for them. Well crowdfunding exists today where you can raise money through pre-sales of the product or even get investors. And other cloud based services like Shopify for e-commerce, etc. allow you to get up and running for very little money. There has never been a better time to start a company.

Don’t know anything about entrepreneurship. You may have never been exposed to entrepreneurship so you simply don’t consider starting a business. You can change that by joining other networks of entrepreneurs or adding more entrepreneurs to your network. The more you meet and learn from these people, the more normal it will seem to start your own company. The more knowledge you acquire, the lower your risk factor.

Entrepreneurship can be stressful. Starting and managing a business can be very stressful. It typically means understanding the market, developing the right products that will address the needs of the target market, and possessing the skills needed to jumpstart and run the business. However, working in a job or career where you have different people managing you to their expectations is also stressful. Most people in life want the freedom of choice to determine the shape of their lives and what better freedom than to create your own company and be responsible to you.

You love your job. You may actually love your current job, and there’s nothing in the world you want to do but work in your current job. You already feel that the corporate world gives you the challenging, exciting environment that you crave. There’s no reason to resign and start a business because you have already found the perfect job. Right up until the company is merged or sold and you need to start proving yourself all over again after ten years of hard work. If you love “what” you do, then you can do the same thing for yourself inside your company.

Starting a business is hard work. There are people who work 16 hour workdays, or work in two or three jobs (aside from their full time jobs). But despite the hard work and the long hours they put in, they still have barely make enough to live comfortably. They are living paycheck to paycheck. If they are already working that hard to earn a decent livable income, they think that starting a business requires double that effort, which they don’t want. Not true. It’s not about how many hours you work but the quality of those hours. And if you are going to work hard anyway in your career, might as well work for yourself. Plus, when you work on your own company and its something you love, it does not feel like work.

You fear selling. Whether you work in a service-oriented business or producing a product, being in business means selling. And, while you may not be in sales, whether you realize it or not, you have been selling your whole life. At a minimum, you have been selling you and perhaps even selling your companies products or services. At networking events, you are selling your company. When you truly care about your company and your products or services, it will feel less like selling and more like helping people.

Security of a steady paycheck. Starting a business can seem daunting. Sometimes you’re up and sometimes you’re down. This means that there might be days of strong revenue, but also days when cash flow is extremely tight, especially during a down economy. There are people who cannot live with the downs and ups of running a business, and instead prefer the stability and security of a job and a regular paycheck. The real issue is that unless you work for the government, there is no guarantee of jobs for life. Do you wonder why so many companies are started in a recession? They are started by people who got laid off from their jobs.

Assume you will have a long and great life. And that you will work 30-40 years doing things you love. If you are going to work that long at something you love, might as well do it for yourself. The freedom and reward for building a great little company is amazing.

The impact of COVID-19 on latino-owned businesses

SBA Relief Loans - Covid19

Source: https://tinyurl.com/wmdqkyc

Business Permit Office assists businesses in navigating Texas permitting

Source: https://tinyurl.com/sgh3j38

Business Permit Office
The Business Permit Office assists businesses in navigating Texas’ permitting, licensing and regulatory environment and aids in resolving permitting issues that arise. This office offers services to businesses of all sizes and resides within the Economic Development and Tourism Office at the Office of the Governor.

Ombudsman/Liaison

• Assists applicants in the resolution of outstanding issues identified by state agencies, including delays experienced in permit review.
• Aids applicants in obtaining timely and efficient permit review and in resolving issues arising from the review.
• Facilitates contacts between applicants and state agencies responsible for processing and reviewing permit applications.
• Makes recommendations for eliminating, consolidating, simplifying, expediting, or otherwise improving permit procedures affecting business enterprises.

Hispanics, Not Trump, are the Biggest Engine Of U.S. Economic Growth

Over the medium-term horizon, Hispanic labor will become an ever more important source of US...+] Source: 

Source: https://tinyurl.com/u48wjxp

Written by: Mayra Rodriguez Valladares
Contributor Banking & Insurance

Over the medium-term horizon, Hispanic labor will become an ever more important source of US... [+] GETTY

In ground breaking research that has significant implications for U.S. policymakers and financial institutions, Peterson Institution for International Economics (PIIE) researchers found that “The Hispanic community in the United States has contributed significantly to US economic growth in recent decades and will continue to do so over the next 10 to 20 years.”

Gonzalo Huertas PIIE

Research Analyst Gonzalo Huertas and Senior Fellow Jacob Funk Kirkegaard, in their recently published working paper, The Economic Benefits of Latino Immigration: How the Migrant Hispanic Population’s Demographic Characteristics Contribute to US Growth, present an incredible diversity of quantitative analysis that proves that “The outsized contribution of Hispanic immigrants to US economic growth results from the quality of the workforce, not just quantity.” Moreover, in what goes against numerous unfortunate, negative stereotypes “Hispanic arrivals have exceeded contemporary native-born Americans and some other migrant groups in their entrepreneurial capabilities and integration into economically relevant parts of the workforce.”

Jacob F. Kirkegaard PIIE

Given the growth of Hispanics in the U.S. workforce, they represent significant market opportunities for every type of financial institution, including banks, insurance companies, asset managers, and fintech. Unidos US, a non-partisan Latino civil rights and advocacy organization projects that in five years, Hispanics will account for about 20% of the U.S. workforce and over 30% by 2050.

Hispanics will soon be 1/3 of the U.S. workforce UNIDOUS

Huertas’ and Kirkegaard’s research shows that “the increase in Hispanic labor could contribute around 0.21 percentage points to annual real GDP growth in the United States over the next three decades if the Hispanic community catches up to the rest of the country in labor productivity.” By 2025, the increase in employed Hispanic labor could contribute more to US GDP growth than non-Hispanic labor.

Projected contribution to GDP growth from changes in employed labor PIIE

Huertas and Kirkegaard also found that Hispanics are the largest demographic group in new opportunity entrepreneurship. "While the US economy has exhibited gradually declining economic dynamism in recent decades, and the share of new firms being created each year has fallen in a trend accelerated after the Great Recession, foreign-born and Hispanic populations have become engines of US entrepreneurship, especially since the Great Recession.” The growth of the Hispanic population and the relatively younger composition of the Hispanic community are key factors driving entrepreneurship developments. Other factors, such as a decline in the historical gap between the Hispanic unemployment rate and the national average, would also contribute positively to this trend.

US rate of new opportunity-driven entrepreneurs, by ethnic group and Hispanic origin, 1996–2016 PIIE

“One issue that we raise, in light of higher opportunity-driven entrepreneurship rates,” said Kirkegaard “is that the Hispanic community needs ample access to financing and business services to facilitate growth of their businesses. It certainly would seem an obvious case where non-banks and fintech innovation could play a role.”

Unfortunately, Hispanics, often struggle to obtain credit. According to Sabrina Terry, UnidosUS Senior Strategist of Economic Policy Project, Policy and Advocacy, “Entrepreneurs still struggle to access credit. They may end up at a predatory lender. If they cannot get a loan, they will end up with a non-bank with a loan with a much higher rate.” Part of the problem she explained, is that many Hispanics’ largest expenses, such as rents and mobile phone payments, often do not appear in a typical consumer credit report. “Financial institutions need to learn about other metrics, alternative data, to better understand the credit worthiness of Latinos and that show that they are responsible and can pay back their debt,” said Terry.

Sabrina Terry, Senior Strategist UNIDOSUS

When I discussed the PIIE research with financial advisors at Stamford-based Fifth Street Advisors, Partner and Co-Founder Abelardo Curdumí, observed that “It is interesting to be able to corroborate what we have already been observing anecdotally. In our wealth management business, we see a robust demand for our services from Hispanics who are both professionals and entrepreneurs. They have the same aspirations as the rest of the population and they need the same sophisticated financial planning to manage, conserve and grow their wealth.”

Abelardo Curdumí, Partner and Co-Founder FIFTH STREET ADVISOR

Of great importance not only to Hispanics, but also to the whole country, Huertas and Kirkegaard found that “Hispanic high school graduation rates have risen from just over 60 percent to almost 90 percent in the last 20 years, reaching levels just below the currently historically high US average high school graduation rate of 93 percent.” However, Hispanics “have ground to cover to catch up with the US average in attaining higher education degrees.” Curdumí stated that “A definite common thread is Hispanics’ healthy respect for education regardless of where they come from or whether they are immigrants or born in the United States. This is acquired from parents who are willing to forgo everything as long as the children have access to a good education. We see that this high value on education continues to be passed on to the next generations.”

Other important demographic factors for financial institutions are that Hispanics are having fewer children, which can mean, more disposable income for these individuals. According to PIIE, “even when the recent declining Hispanic fertility and net migration data is taken into account, the community will still account for the majority of the contribution to GDP growth from labor input in the future, a finding that underlines that it is important to continue fostering increased labor productivity among Hispanics. The continued numerical growth of the Hispanic community makes it imperative that their positive trend in educational attainment be sustained and strengthened to include the highest tertiary levels of education. Only then can the Hispanic community reap the full demographic dividend and convergence in wage levels be achieved.”

US assumed and actual life expectancies 2014, 2016, and 2020, at birth and at age 65 SOURCES: US CENSUS BUREAU (2014) AND CDC (CENTERS FOR DISEASE CONTROL AND PREVENTION) (2018).

Importantly, the life of expectancy of Hispanics is higher than that of other demographic groups. This poses good opportunities for financial advisors who work providing financial services, such as retirement plans, insurance, annuities, and long-term care plans. According to Huertas and Kirkegaard “higher levels of Hispanic opportunity-driven entrepreneurship than among the rest of the US population, emphasizes the importance in securing the community full access to financing and other business support crucial to grow start-up businesses to scale.”

Women on the move (Soledad Tanner)

Amazing video presented this morning at the “2019 Women on the Move” award ceremony Luncheon at the Hilton Americas Houston. It was truly an incredible honor to be among such an accomplished group of “dangerous women”. Video filmed by Lisa Malosky and Don Friedell of Lisa Malosky Productions.

Thank you, Graciela Saenz, for nominating me, Cathy Maris for your heartfelt letter of recommendation and Dr. Cindy Childress to supporting me with your talented ghost-writing skills. To all that were there to celebrate this special moment with me: Dr. Dorothy Caram, Helen Cavazos, Graciela Saenz, Lenora Sorola Pohlman, Sandra Smith-Cooper, Angelica Noyola, Angelica Vasquez, Arcy Munoz, and of course my Gabriel Lopez & mi mother Yolanda Cedeno that flew from Ecuador to be here today. 

Congratulations to all the 2019 Women on the Move and Rising Star: Brenda Hellyer, Jennifer Kirk, Jenny Dial Creech, Charlene Jackson, Pamela Anne Quiroz, Kathryn McNeil, Rhonda Smith, Rebeca Aizpuru Huddle, Paula McCann Harris, and our Rising Star: Victoria Chen.

 Thank you to all the people that worked tireless to make this a reality: Paula Mendoza, Ileana Trevino, Carrie Potter, Sheila Manning, Sara Wise, Frances Castaneda Dyess, Nory Angel, Wendy Dawson, Dr. Melanie Johnson, Beatriz Garza, Liz Cloud, Caroline “Baker” Hurley, Debi Wallace - Barfield Photography and the support team from Possible mission: Ana Fernandez & Sylvia Perez

Soledad Tanner, MIB