Latinas are starting businesses in the US at a record pace. There is no question that women of color have that entrepreneurial spirit in our DNA. Since 2007-- for every 10 new businesses started by a woman, 8 were started by women of color! The average yearly gross revenue for all women owned businesses is $143,000 while the average revenue for Latina owned firms is $52,000 and most are concentrated in service sector.
While that drive to strike out on your own and get out of the grind of working for someone else is so enticing, there are some things to consider for you and your family. Whenever I’m asked about my big lessons as a business owner, here’s my go-to list of cautions:
First, starting a business requires having an idea that’s marketable and sustainable based on your one and only first employee: YOU. The passion you want to bring to your business may be there---coaching, social media management, writing, or gourmet cooking! This is the talent you want to leverage in your business, but now there’s the managing of your business. In addition to being CEO, you are now also Chief Marketing Officer, Chief Financial Officer, Chief Operations Officer. The key question: Do I know how to manage the business and not just work in the business?
Second, it takes money to run a business and make money. If your business is going to generate $52,000 –on average—then be prepared to shell out—about 20 - 25% --in federal self-employment income taxes. Then there’s liability insurance which you generally need to have if you will be conducting business with a major corporation or using an office. Depending on what you do, that can run $2 – 3K yearly. The list of costs is long. The key question to ask: Can you get the capital you need to invest for your start up costs?
Third, it takes more personal energy and enormous focus to run a business than most can imagine. It is more common than not to have a 12 hour day and to work on the weekends because your job is not just the service you will provide to your clients---its also about creating a proposal or marketing your service, billing your clients, developing new services, and learning more to stay on top of your game.
There is no question that running your own business is one of the most rewarding ventures you can pursue. Landing a deal, selling your first product, or opening day for your shop is thrilling! The key is timing your big launch.
If you plan to leave your regular job to go solo, save some money---anywhere from 3 – 6 months of living expenses—to launch. Talk to your spouse or partner about their willingness to handle living expenses while you grow the business. It’s no fun to stress your relationship over money so get clear on your new family budget and manage expectations about whether other expenses will need to be shifted—that vacation in Cancun may need to be on hold.
Equally important---be willing to explore what you may not know about running a business. Entrepreneurs often have a strong, bold sense of confidence. Hey that’s what being an entrepreneur requires!! But that confidence can also blind you to what you don’t know you don’t know. That’s not a typo. Read that sentence again. Life’s biggest challenge: you don’t know, what you don’t know. If you are working inside a large enterprise, you have a perfect learning environment to see how successful businesses are run. This is one of the reasons I personally advise anyone to work at least 3 - 5 years inside a company before launching your own. Use that time to first develop your own skills! Then make time to connect with people who work in other parts of the business so that you can ask what they do and what they might claim to be the key learnings from their profession.
Another possibility is that you may want to create a business as a “side hustle” while you are still working. There may be opportunities to sell a product you believe in but be super careful about getting tied up in a multi level marketing scam or pyramid schemes. If it sounds too good to be true or there are wild promises about getting rich overnight—don’t walk, run away. Some of these businesses entice you with stories of 3 – 5 people who made millions but if you look behind those stories---its basically a lie. They made their money not selling the product---its signing up people who pay to play: buying the product you will sell before you sell it.
There are so many resources now for starting a business and the range of opportunities is staggering. Get informed about the options, time your launch carefully, and oh yeah, get your game face and do it con ganas! Be sure to post your business ideas in our Facebook Group and get some feedback from amazing Latinas who got your back! -Maria