When the coronavirus hit, small-business owners were forced to navigate new territory and make difficult decisions — fully moving operations online, reducing staff or quickly creating new revenue streams. Latino entrepreneurs are among the majority of small-business owners directly affected by the economic fallout from COVID-19.
According to a survey conducted online in late March by the Stanford Latino Entrepreneurship Initiative, 86 percent of Latino small-business owners reported significant negative impact on their businesses by the pandemic. Nearly two-thirds said they will not be able to continue operating beyond six months if current conditions continue.
Many small-business owners are still waiting for government relief in the form of Payroll Protection Program loans, after funding from the initial $349 billion authorization ran out and a second small-business loan program was rolled out this week, but immediately ran into technical issues. In all, the federal government has authorized over $650 billion in loans for small businesses.
Stanford research conducted as part of its annual State of Latino Entrepreneurship report shows that over the past 10 years, Latinos have launched more small businesses than any other demographic, and now contribute nearly $500 billion to the economy in annual sales.
Here is how three Latino entrepreneurs have adapted and found ways to keep their businesses running during an economic crisis.
Café owner gets a little help from Mark Cuban
Luciana Gomez said she did not know what she was getting into when she opened Café Victoria in 2016 across from the American Airlines Center in Dallas.
“I had a passion and I started there,” said Gomez. “I traveled to Europe to find concepts, and find things I wanted to explore, see and bring back here.”
Gomez said it breaks her heart to see the coffee shop she carefully curated and designed now have its chairs pushed against the walls and empty. Despite the emotional challenges of closing the shop, her priority remained clear: keep her four employees working and the business running.
“I did not want to put more people in the unemployment pool,” Gomez said.
She cut her shops hours, doubled-up staffing on shifts while increasing payroll by 15 percent to accommodate the increase and branched out into online ordering and delivery.
“What took me four years to think about doing and never implement took four days to achieve,” she said.
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She handed out brochures while walking her dogs and began to see orders slowly come in from the Dallas community. Gomez even caught the attention of "Shark Tank" host and Dallas Mavericks owner Mark Cuban.
Cuban, whose team plays across the street from Gomez’ coffee shop, placed an order of over 120 coffees and pastries for first responders at a nearby testing site and City Hall.
Gomez said the single order equaled a full day’s sales for her business.
Large orders for first responders quickly became the new norm as local residents sought out ways to support front line workers. While those sales have kept operations running, Gomez said business is still far from normal.
“Even with delivery orders coming in we’re still down more than 70 percent our regular sales,” said Gomez. “We were up 1,200 percent on sales one morning, with only $44 in the register, so it’s safe to say we’re not back on top yet.”
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According to Stanford’s survey, Gomez is one of the 23 percent of Latino business owners who applied for a federal loan. She submitted her application on the first day it was available, but said she has yet to receive any money.
“I’ve been going back and forth with the bank and I’m just shocked at how long it’s taking,” Gomez said.
Even with decreased sales and a pending loan application, Gomez emphasized the Latino community’s strength and said she considers it a blessing to keep her doors open.
“As Hispanics, our currency is a little more resilient and we’re more culturally open to dealing with crisis,” she said. “We keep the motor running until we can drive again.”
Overcoming a gym shutdown
Nathalie Huerta launched The Queer Gym over a decade ago with a $50 gift card from Target. Huerta seized an opportunity to serve her LGBTQ fitness community when she realized a need that was not being met.
“As I began to present more masculine, I became more comfortable in my sexuality, but uncomfortable at the gym,” said Huerta. “I was going to the gym to coach my clients and then I was going home to do my own workouts.”
She now offers tailored training for gender nonconforming members and transgender members preparing for gender confirmation surgery.
Huerta said navigating the emotional impact of the pandemic feels familiar since. She initially opened her business during the 2008 financial crisis.
“You learn that you need to choose what you watch and what you pay attention to and how much you consume,” Huerta said. “Not letting it weigh on my perspective of the situation gives me the confidence to think clearly and show up for my team.”
Since closing her gym’s physical location in Oakland, Huerta has spent her time managing online classes, checking on gym members, and sending care packages. Prior to the pandemic roughly half of the gym’s business was conducted online. Huerta now hosts multiple Zoom classes each day with a staff of coaches leading workouts.
Huerta said since fully moving online only 40 percent of business is coming from Oakland with the remaining 60 percent coming from around the United States and overseas.
“We are running targeted ads in all the gay neighborhoods in all the major cities,” Huerta said. “Before online training was an afterthought, and now it’s a forethought.”
The gym’s membership has grown since going fully operation online as former members return and new leads nearly tripled since running the ads online. “If we grow the client base online quickly enough there’s a possibility we’d keep our physical location closed,” Huerta said.
Staying ahead of the situation
Andres Reyes followed COVID-19 updates since January and began preparing his restaurant employees for the impacts long before most Americans.
“The first thing we did was order gloves, disinfectant wipes, spray, and even hazmat suits,” said Reyes.
Reyes, the fourth-generation manager and owner of Birrieria Ocotlan, a Mexican restaurant in Chicago, moved quickly when the city issued a stay-at-home order.
The next day his employees put on hazmat suits, gloves, and face masks, he grabbed a microphone and they started taking curbside orders in front of the restaurant.
They had cars and people lined up outside for food orders. A popular destination for cyclists and runners from the city’s surrounding neighborhoods, Reyes said the restaurant is known for quickly turning around many orders.
The restaurant also partnered with Uber Eats to make deliveries easier. Since moving to delivery and to-go only, the restaurant’s sales have jumped back to pre-pandemic levels. “It’s been rewarding to know that our hard work and preparation has paid off,” Reyes said.
While business has been able to keep up sales, Reyes said he still had to temporarily lay-off three waitresses while the restaurant remains closed. “It was my main goal to keep everyone employed,” he said. “It was heartbreaking to let them go.”
The restaurant has faced different challenges during its 50 years of operation, but each one comes with a lesson.
“It’s our duty to educate ourselves on everything that is available to us right now,” Reyes said. “This will all pass and there’s nothing bad in undergoing change or emerging from it.”
Disclosure: Invest in You: Ready. Set. Grow. is a financial wellness and education initiative from CNBC and Acorns, the micro-investing app. NBCUniversal and Comcast Ventures are investors in Acorns.
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