Hispanic firms aid each other

Sunday, February 17, 2013

— The lunch rush at Taqueria Vega in north Rogers sends the wait staff hustling to accommodate large parties of diners. Tables are joined and chairs are quickly gathered to seat hungry customers.

Family-style seating is essential to the Vega family’s approach toward their business and their customers.

The 100-plus-seat restaurant, which began in 1999 with a four-item menu and catered almost exclusively to Spanish-speaking customers, has not only survived the economic downturn of the past five years but has flourished.

Northwest Arkansas is home to several large minority-group populations and many first-generation American entrepreneurs.

Foreigners accounted for 5 percent of Arkansas’ population in 2010, according to a recent study by the Migration Policy Institute. Almost half of that population lives in Benton, Washington and Sebastian counties. And like other business owners, minority-group entrepreneurs have had to adapt to the changing economy to stay in business.

Rosa Vega, daughter of Serafin Vega who founded Taqueria Vega with his brother, hustles from the kitchen to the cash register and dining areas. What started as a weekend job for her while working weekdays as a quality-control technician for Springdale-based Tyson Foods Inc. became a full-time vocation in 2003.

“My dad needed someone to work with the suppliers because he didn’t speak good English,” Vega said.

Vega’s language skills not only helped things run more smoothly with suppliers, ithelped the restaurant expand its clientele beyond the Spanish-speaking community in Northwest Arkansas.

She now works 60- to 70-hour weeks.

CHANGING MODELS

Taqueria Vega’s expansion into the English-speaking market is an example of how minority-group-owned businesses in the region are adapting their business models.

Randy Capps was one of the Migration Policy Institute study’s chief authors. The study, A Profile of Immigrants in Arkansas, examines the changing work force, family demographics, and economic costs and benefits associated with the state’s immigrant communities, especially in Northwest Arkansas.

Capps said the recession, generally described as beginning in the fourth quarter of2007 and lasting until the fourth quarter of 2009, began to be felt on the nation’s coasts and spread inward.

“Arkansas is experiencing national trends a bit late and less severely,” Capps said, referring to a combination of factors, including a slowdown in home building, the credit crunch and unemployment.

Geovanny Sarmiento, vice president of minority business development for the Rogers-Lowell Chamber of Commerce, said first-generation Americans in the area - the majority from Mexico - tend to adapt well to changing market conditions. Many migrant workers and day laborers left the region when the construction industry slowed significantly in 2008.

Capps said keeping track of migrant workers as theyrelocate within the country is difficult.

“Single guys working construction, going where the jobs are, they’re very hard to track,” Capps said.

“But a lot of them stayed” in the region, Sarmiento said. “A lot of them found a new way to support their families until this crisis started getting better.”

According to the Migration Policy Institute’s report, Arkansas ranked fourth in the nation in immigrant growth, behind Alabama, South Carolina and Tennessee. Between 2000 and 2010, the number of foreigners living in Arkansas grew by 82 percent to 133,000. The foreign-born Hispanic population in Arkansas increased by 110 percent over that time span, from 39,600 in 2000 to 83,300 in 2010.

Sarmiento said the Rogers-Lowell Chamber of Commerce has about 150 members of minority groups who own businesses and are registered members of the chamber. That number is for all minority groups, including women and first-generation Americans. Sarmiento said the number of minoritygroup members who have joined the chamber increased about 85 percent in 2012 over 2011.

“A lot of them took other jobs [during the recession], or really started thinking about a business idea they’d had for several years and pursued that opportunity, and that’s why we see an increase in the amount of business owners.”

REINVENTING HIMSELF

Julio Rodriguez found himself in a difficult situation in 2011 when layoffs at Wal-Mart Stores Inc. in Bentonville abruptly halted his 37-year career as a corporate tax consultant.

“When your job goes away, what do you do?” asked Rodriguez, now 63. “What do you do when you’re not ready to retire or totally change careers?”

What Rodriguez did was work to reconnect with small businesses, after a lifetime spent on corporate projects for employers that included the Arthur Andersen accounting firm, McDonald’s Corp. and Sears. Rodriguez partnered with longtime colleague Enrique Lopez of Chicago to form LR Management Consultants and began cultivating a customer base among business owners in Northwest Arkansas.

Rodriguez said he had initially hoped to tap into the economic activity of Northwest Arkansas’ Hispanic business community, but that sector offered its own challenges.

“Many of the businesses are too small to justify going outside for fees,” Rodriguez said. “It’s competitive, too. I found that the business I attract many times are immigration issues, which I’m not really legally equipped to handle. I’m more tailored toward mainstream business because of my corporate experience. But I’ve learned.”

Rodriguez, as well as Sarmiento, said some foreign business owners are leery of accounting and tax matters because of the sometimesconfusing issue of immigration status. Even foreigners in the United States legally may be concerned that they are unknowingly violating an aspect of immigration law.”

“Tax filing is a very delicate issue, as you might imagine,” Rodriguez said. “You don’t want to be responsible for somebody losing their status. You don’t want to get your client deported.” GETTING STARTED

According to the Migration Policy Institute’s report, more than half of all foreigners living in Arkansas are either naturalized U.S. citizens or legal permanent residents. Forty-two percent of the state’s foreigners are illegal aliens.

Rodriguez said trust is a serious concern among Hispanic business owners. He said he has had to court some potential clients for a year before they begin to really work with him.

Rodriguez said 2012 was an educational period in terms of starting his new career, and he often learned through trial and error.

“The first year’s a boot camp,” Rodriguez said.

Sarmiento said most businesses created by first-generation Americans tend to be “mom and pop” operations almost by definition.

“First-generation immigrants tend to do it that way because they learned the trade from their mothers, fathers or grandparents, so they’re trying to continue the family tradition,” Sarmiento said. “Unfortunately, because of that, most of them have limited education.

“That’s a limitation, and that’s what we’re trying to help them with, to help them be better business owners and have all these tools available, to do market analysis, to continue doing their finances, and how important that is to create financial statements and understand them.”

Sarmiento said as foreign families establish roots in thearea’s family-owned businesses, like Taqueria Vega, they increasingly rely on the younger generation’s grasp of English and the American business system for their continued success.

“Nowadays what we have seen is that their kids who are reaching adulthood, already in their 20s or 30s, are getting involved in the family business, and they are taking charge of aspects of the business that their parents probably can’t because they have gone to university or taken courses, and now they know how to better run those businesses and can help the family,” Sarmiento said.

In part because of their national origins, many Hispanic business owners tend to eschew modern banking.

Ray Segura, a consumer lender at Legacy National Bank in Springdale, immigrated to the United States from El Salvador with his family as an 8-year-old. Segura, who is fluent in English and Spanish, has dealt extensively with the Hispanic community in Springdale and the businessowning contingent within that community for 17 years.

“My largest customers know my family,” Segura said. “And I mean they know everyone in my family by name.”

Segura said Hispanicowned businesses sometimes face self-imposed hurdles to expansion when they reach the limits of the investing power of cash on hand and finally decide to apply for business loans.

“The reason it’s difficult is because of the lack of credit history,” Segura said. “They’re used to paying for things with cash. We’ve had to re-train them to do things the American way, to establish credit.”

Northwest Arkansas, Pages 15 on 02/17/2013