Multicultural Business Owners: An Overlooked Market?
- NY Times (front page): Moving to the US, prospering ,immigrant entrepreneurs attain considerable affluence.
- Bloomberg: Immigrants key, and majority of small businesses in NYC.
- Forbes: Latino-owned businesses leading the recovery – revenues jump an astonishing 55%.
These, and other recent news stories, show how key immigrant business owners are to the US recovery. It is estimated that immigrants/multiculturals create businesses at two to three times the average rate in the US. The owners of these businesses, small or large, have money to spend and can be active,
generous donors. They are often the heartbeats of their communities.
A study by Duke University, the University of California Berkeley, and Harvard University reported that immigrants to the US founded almost 52% of Silicon Valley startups launched from 1995 to 2005. A quarter of the patents filed during the same period came from immigrants.
For all of these reasons and more, immigrant-owned businesses have become a vital market segment – one that business and consumer marketers and nonprofit fundraisers may be overlooking.
Key characteristics of multicultural business owners include:
- Optimism. A “nothing to lose” attitude and a willingness to take risks. They are resilient, even starting several businesses simultaneously.
- A desire to collaborate.“We are all in this together” is a common attitude, with families often working together.
- A sense of adventure.“Let’s try something new.” They have the guts to take chances.
- Respect and love for family and community. They are consistent, loyal donors to charities once they’ve “made it.”
- Reverence for education. They are self-taught and techno-savvy.
- A predisposition for hard work.
Here’s a brief profile of a few of the ethnic groups steadily growing vital businesses across the country:
Hispanic. More than 90% of Hispanic firms are concentrated in 20 American states; 70% are concentrated in 4 states. The number of Hispanic-owned businesses is expected to grow 41.8% in the
next six years to 4.3 million, with total revenues surging 39% to more than $539 billion, according to recent estimates by HispanTelligence.
“It is estimated that immigrants/multicul- turals create businesses at two to three times the average rate in the US.”
African-American. African Americans outnumber other ethnic groups in the creation of SOHO (small office, home office) businesses. Entrepreneurs identify needs within their communities and fulfill them.
Enterprises related to elder care and childcare, for example, are proliferating in African-American communities.
Asian Indian. Businesses owned by immigrants from India are a major engine of growth in the computer, hospitality and healthcare industries, according to the Survey of Business Owners (2007 US Census Bureau). These businesses are responsible for an estimated $152 billion in revenue generated yearly in the US.
Korean. A surge of Korean immigrants to the US in the 1960s coincided with a trend among European small-business owners to retire and sell off their stores. Koreans bought up those stores with the help of the kye, a rotating credit association. Other ethnic groups operate similar community-driven lending services to boost entrepreneurship.
Tips for Marketing to Immigrant-Owned Businesses
Ethnic American communities and businesses love American brands, goods and services, and respond especially well when marketed to with respect and “in culture.” To learn more about immigrant-owned
businesses and serve them better, you may want to:
- Study their location, the size of individual companies, their SIC codes, and their number of employees.
- Apply best practices as you would with any consumer projects.
- Test your current controls with a list focused on ethnic businesses. Tweak the control in simple ways to increase response – such as by sending a message from a member of your staff of the same ethnic origin as your target audience. (“Jose Hernandez invites you to sample…”)
- Include a local geographic reference. This has been shown to lift response in multicultural areas.
- Test and test again. Testing is the key to finding an honest voice that will be welcomed in ethnic communities. My clients tell us they can get a two- to three-times bigger response by testing and tweaking their promotions.
Part myth, part reality, the promise and dream of a better life are what unite us all. Focus your marketing campaigns on the optimistic, hopeful spirit of immigrant-owned businesses to better serve them and their communities. Your results could surprise you. These are dynamic, potentially lucrative markets waiting to be tapped.