A Latino family business is an opportunity to build wealth for your family but also it can bring a lot of headaches. Here are some recommendations and tips on how successful Latino family-owned businesses have made it through the decades.
Since the late 1880s to the 21st century, Latino immigrants have shown their entrepreneurial spirit, a trend that continues today. They started Cuban cigar stores in Tampa, Mexican almacenes (food stores) in Chicago and Puerto Rican bodegas in New York and New Jersey.
They also opened dance halls, theaters, and movie houses in Los Angeles and print shops and Spanish newspapers in San Antonio. Latino businesses have been at the forefront of the American economy. Today, they still are.
Many –if not most– of these businesses started as a Latino family-owned business to provide for the everyday needs of the family group. Some continued for generations, expanding into larger corporations –such as Goya Foods Inc. or La Preferida– while others faded and disappeared.
What are the secrets to building a successful and thriving family business?
Pros and cons of a family owned business
Family owned businesses face the challenges and enjoy the rewards of working together as a family. Some are started by husband and wife, and carried on by the next generation. Others are multiple-generational businesses that also involve relatives and extended-family.
According to FamilyPreneurship–a MassMutual study that interviewed over 500 family business owners around the country– successful companies keep certain components in line. They practice open communication, trust other family members’ decisions, keep a balance between work and family life, and do overall planning for running the business and for the unexpected.
But some of these good practices might be tinted with cultural aspects of the Latino family interaction, such as familismo, gender roles, and the perception of work value, success and leadership.
- Aquí mando yo (Here, I’m the boss)
In order to make decisions, most successful family businesses discuss issues at least among two or more members and stakeholders. However, as Latino families might be a hierarchical, male oriented structure, so might be their businesses, leaving decisions to the dominant male, a practice that might not always be the right one for the company.
While familismo is an important cultural value that derives from a collective worldview in which the group is more important than the individual, the family might impose sacrifices on themselves or their younger members for the good of the business.
Children might not have a personal or professional interest in their parents’ business but are demanded to be part of it against their will for the sake of the family. In the long run, this imposition might create frictions and tension both at work and at home.
Loving the business you’re in and having understanding of children’s needs are two ways of showing them that although you would like them to share your passion, it is them that have to make that decision for themselves.
- We all know each other very well
As some Hispanic families are male dominant in the decision-making process, they might put their spouses and daughters in charge of the menial or less important jobs or just keep them as nominal board members with no real decision power. Clearly defined roles and responsibilities should be based on capacities and abilities, not on gender or age differences.
Whomever is better qualified for a certain position should be trusted to make the important decisions a family run business requires –usually with very little margin for failure. Also, micromanaging or over-controlling the work of others might take away the precious gift of trust, a valuable component of this type of enterprise.
- Work hard, play hard
Most family business owners find very challenging to balance their work and personal lives. Bickering at work about family “stuff” and about work during family dinners is not a great way to balance work/family life.
Most family owned businesses find that leaving emotions out of the equation is a great solution for solving conflicts and making decisions. However, emotions can run high in Latino families. Finding the time and the strategy to deal with personalities and temperamental behavior might be a healthy way to resolve business AND family issues. Although roles might be interchangeable among members of the family, someone has to keep a “cold head” around these times.
Giving the family a good time to relax, and bonding in other aspects of their relationship –such as sharing sports, dancing or recreational activities– are also important and beneficial behaviors for all members, including “the boss.”
You might be interested: Refreshing Peruvian beverage Inka Cola growing popularity in the USA
- Divorce and disease not included
As hard as it is to start and manage a business, unforeseen life events affect many family run businesses the most. A spouse needs to leave for a family emergency for a few months, someone gets gravely ill, or spouses face death, divorce, domestic violence, addiction or any other illness that causes a big impact on the life of their business. Who will take over? Would it survive?
Although divorce rates are lower among Latinos than non- Latino whites or African-Americans, conflict might still be present in the family and affecting business. A careful planning of a business exit strategy –selling, transferring, acquisition or liquidation– and buying appropriate insurance options might protect the rest of the family members against those unfortunate events.
Latino family businesses are increasing their revenue contribution to the economy at a staggering rate, representing up to 20 percent of the businesses in states such as New Mexico, Florida, California, Texas, New York and New Jersey. However, many are doomed to fail–depending on the study, as many as 50 percent might close doors in the first year in business. Following simple guidelines to interact with your partners in business and life might be a good way to avoid conflict and cruise smoothly into a successful business.