By now everyone is very familiar with the 2013 Nielsen report on Latinas and how we are starting businesses at six times the rate in comparison to other women in the U.S. I believe this is due to how passionate and hardworking we are. However, despite the start up numbers being so high, most Latina businesses remain at the micro enterprise level and here is why: lack of business planning on the financing end and most importantly not altering their mindset from “I am going to make this business work no matter what” to a mindset of “I am going to create a global brand and think like big corporations do.”
First of all, it all starts with your business plan. Yes, Latinas are swift in starting businesses, but most of the time they are going about it by the seat of their pants. Nine times out of 10, most Latinas do not have a thorough business plan and those that do have one, limit it solely to describing the idea and it’s execution in general terms. Missing from it is the primary and secondary research on their industry, which is crucial to assessing long term sustainability and truly understanding how they target market thinks, feels and behaves, present and future, as it relates to their product or service.
Why is this so important you ask? Good question. It is only through a thorough analysis of the market you will be entering, or are already in, that your business will be based on actual data and not on your own assumptions. You have to think like large corporations do and rarely do they make business decisions on assumptions. After all, they have reputable brands to protect. There is a shift here that needs to happen in order to go from a micro business mentality to one of creating a global brand. The shift starts with accepting that you do not have all the answers and cannot be the expert for everything in your business. You need a team.
If you first start with the premise of creating a global brand then it will be less likely you will miss another important component of the business plan, which is being realistic of and having enough research on your competition. In a micro mentality we just assume that if we work hard then the business will come, and while that might work for a bit, in the end it will leave you exhausted and with a feeling that you have to reinvent the wheel each year. Unfortunately, this is one cultural mindset that is preventing Latinas from financially successful enterprises. We have to switch that mentality to working strategically and smarter. In order to do that we have to be willing to let go of the control over the business and be open to creating a team or bringing strategic partners. How you plan to do that should be clearly outlined in your business plan. Also, remember that a business plan is a guide for your business and it is always a work in progress.
All companies that get VC funding do because on paper and in reality they are never a one person operation. There is a team in place and this assures investors that there is a variety of talent to move the business forward. Also, the numbers make sense and by numbers I am referring to sales projections, customer acquisition and future funding for the business. This is another weak piece I see in Latina business plans and existing Latina businesses. Sales projections, again, cannot be based solely on assumptions. They have to be based on data and this always goes back to the market research, the competitive analysis and the design of the marketing plan.
You do not have be an accountant or have a business degree in order to plan for a financially sustainable business, but you do need to realize that without proper planning, you will be like an aimless ship at sea without a compass. You have to visualize the lifestyle you want to have as a result of this business. In 10 years do you want to be working as hard as you are right now? I know the answer is “no.” I know most of you would want more time to spend with your families. Begin thinking like big companies do. Start with the end in mind. Think about creating a global brand from day one and reverse engineer the resources, the funding and the people it will take to get there.
Rosie “the Closer” Zepeda has been a featured writer in Vision Magazine and Society of Hispanic Professional Engineers Magazine, and numerous blogs. She is a Business and Communication Strategist. She is the Founder of Latina Success Network, the premier community for culturally relevant self, entrepreneur and professional development training for Latinas.