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Pros and cons of building a Latino family business

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.

latino family-owned business

A wide variety of snacks, mostly candy, on display at a bodega in Park Slope, Brooklyn. It should be noted that the variety displayed is a bit larger than the norm offered by your local bodega: the shop is two blocks from a school. By Jeffrey O. Gustafson at the English language Wikipedia.

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

Latino family business

A study from MassMutual that conveys the best way to build and succeed with a family 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.

latino family business

Radhames Rodriguez came to the United States from the Dominican Republic in 1985. He and his two brothers now own 12 bodegas. “I love a bodega because, first of all, I make money,” said Radhames. “And second of all, I like to be with people.”
His 19-year old daughter, Diana, is taking Bio and Pre-Med, and hopes to go to medical school. But, she says, business runs in her blood, and she would like a bodega of her own.
“When you walk into a bodega, you feel like you’re at home,” Diana said. She would know: since she was a child, she lived above a bodega, and started working at one at the age of six. CREDIT: David Katzenstein published on https://www.cbsnews.com/pictures/bodegas-of-new-york-city-photographer-david-katzenstein/7/

  • 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

    grandfather-300x219

    Original store of La Preferida in Chicago

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.

Help us research Hispanic family business (Eng and Spa survey)

Members of the Goya family, one of the largest family-owned businesses in the US

Members of the Goya family, one of the largest family-owned businesses in the US

New research reveals that about two-thirds of Hispanic business owners (versus only 36 percent of general business owners) said they started their businesses to improve their lives and provide for their families, according to Business News Daily.

These business owners plan on keeping it in the family:  while 54 percent of the general business owners plans to pass their businesses on to their children, 70 percent of Hispanic business owners plan to have their children continue their firms but they have little information on how to help them with succession strategies.

ENGLISH

The Hispanic Chamber of E-Commerce (www.hiseb.com), the Center for Family Business at the University of Monterrey, Mexico (www.udem.edu.mx/empresasfamiliares) and Akro Group (www.akro-group.com), are conducting a study on the Hispanic family businesses in the U.S., which aims to determine the current dynamic, succession, professionalization and internationalization strategies. A final report will contrast the results of this research with data obtained in other countries of the Americas.

We request your participation in a short survey that will help us gather important information. Your participation is voluntary, and you don’t need to give any personal information. The results will be used strictly for research purposes.

Should you have any inquiry about the instrument or research purposes, you may contact Guillermo Salazar (guillermo@akro-group.com). Please do not leave questions unanswered. Questions marked with asterisks must be answered in order to move to the next page of the questionnaire.

Use the “Prev” or “Next” buttons to move forward or backward in the survey. At the end, click the “Done” button to submit your answers. We greatly appreciate your time.

take the survey HCEC2 Hispanic family business

Hispanic family business

https://es.surveymonkey.com/s/EFUSAES

ESPAÑOL

La Hispanic Chamber of e-Commerce (www.hiseb.com), el Centro de Empresas Familiares de la Universidad de Monterrey (www.udem.edu.mx/empresasfamiliares) y Akro Group (www.akro-group.com), están realizando un estudio sobre las empresas familiares de origen hispano en los EEUU, el cual tiene como objetivo determinar su dinámica actual, características y próximas estrategias de sucesión, profesionalización e internacionalización. A partir de esta investigación, se publicará un informe final que contrastará los resultados que se han obtenido en otros países del continente americano. Para ello, solicitamos su colaboración para responder el siguiente cuestionario. Su participación es voluntaria, y usted no tendrá que darnos su nombre. Los resultados se utilizarán estrictamente para fines investigativos.

Estimamos que dar respuesta al cuestionario le tomará unos ocho minutos. Si tuviese alguna consulta sobre el instrumento o los fines de la investigación, puede contactar a Guillermo Salazar al correo electrónico guillermo@akro-group.com. Por favor no deje preguntas sin contestar. Las preguntas marcadas con asteriscos deben responderse para poder pasar a la siguiente página del cuestionario.

Utilice los botones “Ant.” y “Sig.” para avanzar o retroceder en la encuesta. Al final, haga clic en el botón “Listo” para que su formulario sea enviado correctamente. Agradecemos mucho su tiempo.