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presented by
WestGroup reseArcH
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FOREWORD
Gonzalo a.
de la
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ACknOWLEDGMEnTS
Acknowledgments
collaborating organizations
ArizonA HispAnic cHAmber of commerce ArizonA public service compAny pHoenix minority business Development AGency business center WestGroup reseArcH Womens business enterprise council West
endorsing organizations
speciAl tHAnks
for ProVidinG insiGhts durinG the researCh
JaMes e. GarCia
of
CoMMerCe CoMMerCe
MoniCa s. VillaloBos
of
andrea Whitsett asu Morrison institute for PuBliC PoliCy laura fullinGton
MaCeriCh
Glenn iWata WestGrouP researCh katy Gallert WestGrouP researCh production teaM
CarMen G. Martnez, Graphic Design Director terri MorGan, Production Manager JaMes e. GarCia, Co-Editor MoniCa s. VillaloBos, Co-Editor teleMundo, Video Profile Production BC GraPhiCs, Printer 4
alika kuMar Minority Business deVeloPMent aGenCy Business Center MiChele ValdoVinos
rePuBliC Media
JaiMe Boyd
uniVision
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TABLE OF COnTEnTS
tAble oF contents
acknowledgMents study highlights conclusions study Findings section i. challenges: What types of challenges have Women-oWned business enterprises (Wbes) faced? section ii. strategies and successes: What steps have these businesses taken to succeed? section iii. resources and role Models: Which resources have Wbes relied upon to run their businesses? section iv. business characteristics: What are the characteristics of Wbes? section v. owner characteristics: Who oWns these business enterprises? section vi. the Future: What do these oWners think about the future of their business? business proFiles: GREAT IMPACT AxIS EMPLOyMEnT nATUROPATHIC VITALITy WELLnESS CEnTER study background and Methodology end notes 10 28 45 50 53 12 17 22 30 39 41 4 7 9
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WERE THERE
Cox Communications commitment to diversity extends beyond our workplace into the communities we serve. Cox is proud and committed to serving our ever-growing Hispanic community.
2012 Cox Communications Arizona, LLC, dba Cox Communications. All rights reserved.
STUDy HIGHLIGHTS
studY HigHligHts
the purpose of the 2012 women-owned business enterprise (wbe) study is to provide insights into the challenges, strategies, needs and resources of these arizona businesses. the phoenix Mbda business center and arizona hispanic chamber of commerce designed the study to be a resource for businesses, organizations, educators, government agencies and individuals who want to help arizona wbes succeed. a total of 421 telephone interviews were conducted with arizona wbes from august to october 2012. the businesses represent a range of industries, company sizes and locations throughout the state. a comparative analysis was made with the 2007 SRP Arizona Business Study - Focus on Women-Owned Businesses1, when applicable.
Challenges
Common business challenges WBEs faced
a wide range of challenges in 2012 and felt their most significant obstacles were related to running their business surviving the recession, accessing capital, and finding new customers.
Surviving and growing The top accomplishments WBEs mentioned were the longevity of the business and being able to survive the economic downturn (48%), followed by growing a financially successful business (35%). I survived the great recession. I have created an extremely diverse customer base, which is what keeps me safe through the recession.
strategies/aCComplishments
Work harder/Persevere The most common
response to the challenges faced by WBEs was to prove the challengers wrong through hard work, perseverance and showing they can do the job.
resourCes/role models
Asking for help Half of the WBEs (50%) sought
assistance from outside organizations to help with their business. Resources used included industry organizations (31%), federal government (SBA 20%), and local government/chambers (17%).
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STUDy HIGHLIGHTS
study highlights
President Barak Obama, Oprah Winfrey, Donald Trump and Bill Gates
These are the top four individuals mentioned in answer to the question, If you could have any two (or three) people in this world visit your business, and their intentions were specifically to help your business, who would you want these people to be? Politicians was the category of individuals that was mentioned most often, followed closely by business advertising in 2011. The average amount spent on marketing/advertising was $12,720 in 2011.
owner CharaCteristiCs
Characteristics of the owners of WBEs included: Half had college degrees (53%). Median age was 57 years old. Median income was $72,520.
Business CharaCteristiCs
Characteristics of the typical WBE included: Almost half (42%) were sole proprietorships; one quarter (27%) were S Corporations. Median revenue in 2011 was $155,910, which was higher than $119,900 in 2007. Median number of employees was 3 people. Median age of the company was 16 years old. Half were Family-Owned (53%) Half were home-based businesses (46%) Customer bases include both retail (54%) and businesses (56%) Half conducted business nationally (46%) One-fifth conducted business internationally (21%
the Future
Improving economic future Most WBEs
felt that their financial situation will improve in the next 12 months (58%). Only 8% anticipated that their situation will become worse. This optimism was down slightly from before the recession (67% felt their financial situation would improve in 2007).
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COnCLUSIOnS
conclusions
1. Beyond survival WBEs marked the survival of the economic downturn over the past
five years among their biggest accomplishments. Few of these companies experienced widespread growth since 2007 and most of these owners have made personal sacrifice in time and money to make it to 2012. These businesses appear ready to grow and are willing to pay the price to succeed at the next level.
2. asking For help WBEs are not afraid to ask for help (federal, state, local, education,
industry, associations). Organizations interested in helping WBEs have opportunities to assist these businesses in the following areas:
OvErCOMInG nEGATIvE PErCEPTIOnS One in four WBEs still experience some level of discrimination and need help proving their abilities to a skeptical customer base.
MArkETInG/SAlES WBEs need help reaching new customers and retaining/communicating with existing customers, especially in this slow recovering economy. WBEs are trying to use their status to qualify for contracts and could use assistance with this process. WBEs understand the need and value of marketing/sales/advertising and have shown that they are willing to invest time and money in these areas.
InTErnET/TOOlS WBEs have turned to online tools to help promote their business
and communicate with prospective and existing customers. They appear open to continue trying new Internet tools.
FInAnCInG Even though most self-finance, WBEs need capital sources to grow. GrOWTh Half of the WBEs plan on growing in the next five years. They will need help
in financing, staffing, facilities, and operations among other key factors needed to successfully make the next steps for the business.
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BUSInESS PROFILE
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BUSInESS PROFILE
how did the eConomiC downturn aFFeCt great impaCt!, what have Been your Biggest Challenges as a minority/ inC.? woman-owned Business?
we were hit hard by the recession in 2008. at one point, we lost our top six customers overnight. Fortunately, we had metrics in place to help us determine how much time we had to find solutions and develop a plan. we survived the downturn primarily through the relationships and trust we had built with our suppliers and customers. we set up payment plans with our suppliers and provided similar options with our customers which helped stabilize our cash flow. we felt surviving the recession was a defining moment for our company, because we now know which companies believe in Great Impact!, Inc., have similar values, and will stand with us during tough times. the challenges we face are common to all businesses. i really have not had many negative experiences being a minority and woman-owned business. i can only think of the benefits associated with being a part of the local hispanic community and network of woman business organizations.
how has Being a minority/woman aFFeCted how you run your Business?
i am a third generation hispanic and have found the latino community to be very supportive of my business. the hispanic culture is naturally very warm and social, and the community has been a great resource to me when i needed advice or support. My involvement in the aps academy for the advancement of small, Minority and women-owned enterprise (aaaMe) program taught me how to build my company culture based on core values. arizona hispanic chamber of commerce (azhcc) and grand canyon Minority supplier development council (gcMsdc) have both helped me develop a strong network of contacts in the business community. in the same way, my involvement in national association of women business owners (nawbo) especially helped me as i was beginning my business. i was able to build a strong network of women business owners who have been a good resource to me. Great Impact, Inc. has also recently received
2.
Values are extremely important knowing your values will help guide you when looking for new customers, employees and suppliers.
3.
Develop a reporting system to measure your success be disciplined to review leading and lagging indicator measures every week. and be ready to make needed changes to insure your success.
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STUDy FInDInGS
studY Findings
what types of challenges have women-owned business enterprises (wbes) faced? note: references to the 2006 and 2007 results throughout this report were based on findings from the 2007 srp arizona business study Focus on women-owned businesses2.
section i challenges
Being taken serously
when asked about their most significant challenge, wbes mentioned a range of business-related issues including surviving the economic downturn, raising capital, and finding customers. the top individual answer to this open-ended question was that they face the same challenges as any other business (26%). the top issue related to being a wbe was being taken seriously (12%). related comments included customers saying: They wanted to speak to a man. They did not think I was capable of doing the job. They assumed I was not qualified.
recession/Financing in 2012 the impact of the economic downturn (starting in december 2007) was reflected in the issues mentioned in 2012. those mentioning recession/economy and financing/access to capital both increased significantly from 2007 to 2012. Overcoming perceptions when asked directly, 28% felt that overcoming negative perceptions of being a Woman-Owned business was a significant/somewhat of challenge. Treated differently a total of 28% agreed with the statement, I think some of my business contacts, such as suppliers or customers treat me differently.
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www.phoenixmbdacenter.com
The MBDA Business Centers in Phoenix and Pasadena, serves minority-owned firms seeking to penetrate new markets, domestic & global, and growing in size and scale. Whether its securing capital, competing for a contract, identifying a strategic partner or becoming export-ready, your success is our priority.. We assist in securing large public and private contracts and financing transactions, stimulating job creation and retention, and facilitating entry to global markets for eligible minority business enterprises (MBEs). MBC serves eligible MBEs with annual revenues of over $1,000,000 or, firms in a high-growth industry (e.g. green technology, clean energy, health care, infrastructure and broadband technology, and such).
255 East Osborn Road, Suite 202, Phoenix AZ 85012 602-248-0007 155 N. Lake Avenue, Suite 870, Pasadena, CA 91101 626-664-4880 www.phoenixmbdacenter.com; Operated by the Arizona Hispanic Chamber of Commerce
CHALLEnGES
section i challenges
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CHALLEnGES
section i challenges
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At WestGroup, weve been helping companies connect with customers for over fifty years, regardless of who they are, where they live, or the language they prefer.
Give us a call or visit our website for more information on how we can help you stay in touch.
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aCComplishments/suCCess stories
WBE comments I have been in business since 1999 longevity! All of my new clients are by referral. I do not have to invest in marketing and many clients I had from 10 years ago are still my clients. Im still building relationships. Being able to touch the lives of thousands of woman in a more positive way. The ability to support myself and my family To have the freedom of putting my priorities in order: God first, family second, career third. I would say one (accomplishment) would be that my mom and I have basically run this business since the 70s and weve done a good job. We try to employ more women, keep women employed with kids, and try to work with them and their schedules. I am a master engraver, which is significant for a woman. I survived the Great Recession. I have created an extremely diverse customer, base which is what keeps me safe through the recession. I am highly regarded in my field on a national and international level.
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Home scHedule m ay MoN. 27 June Fri. 14 Wed. 19 Fri. 21 J u ly Tue. 2 Wed. 10 Sun. 14 Sun. 21 chicago Los Angeles Minnesota Washington New york San Antonio Los Angeles Minnesota 2PM 7PM 7PM 7PM 7PM 12:30PM 3PM 3PM august Sat. 3 Tue. 6 Fri. 9 Sun. 11 Wed. 14 Fri. 23 Sat. 31 Atlanta Seattle Tulsa Tulsa indiana Seattle connecticut 7PM 7PM 7PM 3PM 7PM 7PM 7PM 7PM 7PM
602.252.WNBA (9622)
PhoeNixMercury.coM
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BUSInESS PROFILE
axis eMployMent
owner: tran tran
who is axis employment?
axis employment is a full-service staffing firm placing temporaries, temp to hires, and direct hires in all areas of business including administrative, accounting, clerical and customer service. some of the companys clients include liberty Mutual insurance, First american title, and tri-west healthcare alliance (which manages healthcare for the military) as well as a range of mid-size manufacturing companies and small businesses.
4710 n. 16 street suite 201, phoenix az 85016 [602] 242.2626 axisemployment.com tran@axisemployment.com 11 years in business
th
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BUSInESS PROFILE
how has Being a minority aFFeCted your outlook when running your Business?
i was a refugee from vietnam and came to the united states when i was eight years old with my parents and five siblings. except for my father, no one in my family spoke english when we moved into a two-bedroom home in phoenix, az. although some might have seen our start as challenging, we always felt fortunate for the opportunities we had in america. My siblings and i have all graduated from college (and three completed medical school) on scholarships and then achieved professional success. i have learned through hard work and perseverance that, in this country, you have the opportunity to climb high.
Have passion for what you do Find what you love to do and just plug away at it and dont let anybody tell you no. i think the passion we have for making our clients and candidates happy is what helps drive the companys continued growth. Continue to persevere in our office we have a boulder displayed with an inscription, daily we Must toil. the myth behind the boulder is the story of sisyphus who was condemned to a life of labor by rolling the stone up a hill only to have it come rolling down at the end of the day. i think that is an important reminder of the determination and focus that is needed each day when running a business.
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BUSInESS CHARACTERISTICS
Arizona WBEs conducted business both nationally and internationally almost half
(46%) conducted business throughout the united states outside of arizona; 21% conducted business internationally. this geographic span of customers was comparable to the 2007 study. among those who conduct business nationally o close to home - Most conducted business in the southwest (66%), including california, colorado, nevada, new Mexico and texas. o decrease in southwest over time - those conducting business in the southwest in 2007 was significantly higher (89%) than in 2012. o All around the u.s. - one out of three (31%) mentioned that they conducted business in all states. o primarily within Arizona - Most of the sales of these national companies were within arizona - 68% of their sales
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BUSInESS CHARACTERISTICS
WOMEN-OWNED BUSINESSES
2007 sample size oWnership sole proprietorship Corporation s Corporation partnership llC median revenue median number of employees median age of company business descriptions Family owned inherited from Family home-Based non for profit customer descriptions retail Consumers Business goverment geographic scope Conducts Business internationally Conducts Business nationally
Bold figures are significantly different compared to 2012 n/A not asked in 2007
2012
421
495
20% 48%
21% 46%
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BUSInESS CHARACTERISTICS
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BUSInESS CHARACTERISTICS
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BUSInESS CHARACTERISTICS
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BUSInESS CHARACTERISTICS
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BUSInESS CHARACTERISTICS
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ROsA MACAs
OWnER CHARACTERISTICS
* note: the income for wbe owners is not a direct comparison with the overall household figures because the states 2011 median income accounts for multiple wage earners in the home compared to the wbe owners individual income. the difference of wbes household income would be even greater than arizona household income.
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OWnER CHARACTERISTICS
WOMEN-OWNED BUSINESSES
2007 sample size demographics median age percentage with college degree or more education median household income culture/language Born in u.s.
Bolded figures are statistically different.
2012
421
495
93%
91%
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THE FUTURE
Expansion plans - almost half (47%) planned on expanding their business during the next five
years. only 9% planned to shrink their business.
Adding jobs - in the next two years, half (49%) of the wbes planned on adding at least one
person to their staff; only 4% planned on decreasing their number of employees.
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THE FUTURE
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THE FUTURE
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&
I N P A R T N E R S H I P W I T H
P R E S E N T
Way
in
SuppLier diverSity
2012 inDuCtees
AmericAn express ArizonA public service (Aps) ArizonA stAte university (Asu) At & t bAnk of AmericA centurylink city of phoenix AviAtion cox communicAtions hensel phelps construction co. pepsico sAlt river project (srp) southwest GAs sundt construction university of phoenix wAlmArt
BUSInESS PROFILE
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BUSInESS PROFILE
what have Been the Biggest Challenges your Business has what has Been your Biggest suCCess with your FaCed? Business?
in the beginning, one of my biggest challenges was finding the right people to represent my business. i wanted my employees to share the same passion and philosophies so that it translated when we were treating our patients. i believe part of our success and growth has been due to creating a compatible team and teaching the employees how to better serve our patients. My biggest success and achievements have come from seeing the results of the wellness care we provide. For example, we do a lot of fertility care at the clinic and we have seen some amazing results from patients who have been trying to get pregnant for years. some of my patients had seen numerous practitioners prior to visiting us and then, with the right treatment and some powerful therapies (such as acupuncture, homeopathy, adjusting their diet, balancing their hormones naturally and providing natural supplements), we see successful pregnancies. i think it is these stories that have been the true successes for our business. success stories translate into more referrals, which in turn grow our business.
how has Being a minority/woman aFFeCted how you run your Business?
i have seen more opportunities than challenges as a latina business owner. i think some of my greatest challenges as a hispanic woman came early on, before i started my business. when i moved to this country, my knowledge of english was very limited, so learning the language and understanding the culture were challenging. in terms of being a woman and running my own business, i find some of the challenges come when i have to work with other providers, businesses, and doctors who are often men. the challenges have been learning how to talk in their language and showing strong leadership, which is oftentimes associated as a male characteristic. i try to balance between communicating strong leadership to my employees/members of the community and expressing compassion, caring and kindness to my patients.
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Coverage claim based on square miles covered; see vzw.com. LTE is a trademark of ETSI. 4G LTE is available in more than 450 markets in the U.S. 2013 Verizon Wireless.
0113-F8112
The Latina business enterprises (Lbe) group is an integral part of the Arizona Hispanic chamber of commerce and an influential resource for Latina-owned businesses and serves as an advocate for small business issues.
through events and workshops those seeking to Learn more aBout reaching the Latina market, gain the opportunity For:
business and professional development Access to business resources and education networking opportunities and community outreach Mission: The Latina Business Enterprises (LBE) group is aligned with the vision of the
AZHCC and focuses on the interests of Latina-owned small to mid-size business enterprises throughout the state of Arizona by providing access to information, building business relationships, providing resources, facilitating business workshops and serving as an advocate on issues impacting small businesses.
For more inFormation regarding joining the LBe group or attending upcoming events pLease visit www.azhcc.com or contact Angie MorteMore at the azhcc oFFice at: [602] 279.1800 or AngieM@Azhcc.coM
ArizonA HispAnic cHAmber of commerce 255 E. Osborn Road, Suite #201, Phoenix, AZ 85012 | [602] 279.1800 | www.azhcc.com
U P C O M I N G E V E N T S F O L L O W U S
Challenges/needs
Finding new customers Latinas were twice
as likely to mention that finding new customers/contracts was their most significant challenge (14% compared to 7% among all other WBEs).
FirmagraphiCs/demographiCs
larger, local, and Family Centered
Differences in company firmagraphics included: More employees Median of 5 employees among Latina-owned businesses compared to median of 3 employees among all other WBEs. Higher annual revenues Median revenues of $224k in 2011 among Latinas compared to $143k among all other WBEs. More likely to only conduct business in Arizona 61% among Latinas compared to 48% among all other WBEs. More likely to be family owned 75% among Latinas compared to 49% among all other WBEs. More likely to have inherited the business from another family member 47% among Latinas compared to 15% among all other WBEs.
Bilingual, younger, more first/second generation Differences in the company owners included: Bilingual 76% among Latinas compared 21% among all other WBEs. Younger age 52 years old (average) among Latinas compared 57 years old among all other WBEs. More first and second generation among owners 49% among Latinas compared to 11% among all other WBEs.
the Future
Optimistic Latinas were significantly more optimistic
about their companies futures - 72% anticipate their companys financial situation will improve compared to 55% among all other WBEs. They were also more likely to plan on expanding over the next five years (68% compared to 44% among all other WBEs) and add employees in the next two years (73% compared to 46% among all other WBEs).
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why are the arizona hispaniC ChamBer oF CommerCe and phoenix mBda Business Center ConduCting this researCh?
the arizona hispanic chamber of commerce and phoenix Mbda business center commissioned this report in order for it to serve as a resource for government officials, planners and analystes; business and community leaders; and educators who want to understand the needs of Minority-owned companies. this research is designed to provide a voice to women-owned businesses and facilitate business-to-business relationships between minority- and non-minority owned businesses. this study also serves as a reminder to arizonas leaders in private industry and government that the economic sustainability of our state depends on the entrepreneurial vitality of its minority communities.
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* The classifications provided above are based on the description of the business using two-digit nAICS codes.
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position
owner/Ceo/president administrator/manager Board member/executive management other
* note: Some respondents listed more than one position within the company.
Contact Us
For more information about the research, please email your questions or requests to: research@azhcc.com.
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EnD nOTES
end notes
1
salt river project, 2007 srp arizona business study - Focus on women-owned businesses, 2007 .
ibid 1.
united states census bureau, education attained by state, the 2012 statistical abstract, the national
amanda noss, u.s, census bureau, household income for states 2010 and 2011, american
united states census, statistics for all u.s. Firms by industry, gender, ethnicity, and race
for the u.s., states, Metro areas, counties, and places, 2007 survey of business owners, http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=sBo_2007_00Csa01&prodtype=table.
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Kaiser/HRET Employer Health Benefits 2011 Annual Survey. BCBSAZ employer/GBA survey, 2012.
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