Editor’s note: This is the second in a series of features detailing immigrants and refugees within Nebraska communities.
A 2019 report from SCORE and the Small Business Administration found that there are 3.2 million immigrant-owned businesses in the U.S., employing
8 million people and contributing $1.3 trillion to the U.S. economy.
Studies have found that migrants, despite losing nearly all their human capital, are more likely to start businesses. An MIT study went as far as to deduce that immigrants are 80% more likely to start a business than their U.S.-born counterparts.
The numbers track. In 2019, immigrant-owned businesses accounted for 25% of all new businesses (SCORE), despite only making up about 14% of the U.S. population. Those entrepreneurs are leading the charge for tailored resources to help even more migrants achieve the “American dream.”
Language Barriers
In Omaha, immigrants make up almost 11% of the population according to the most recent census. Regardless of home country, professionals working with immigrants from all countries named language barriers as the No. 1 challenge.
“For people that are like me, from non-English speaking countries, they come [to the U.S.] and the first, and the biggest hurdle initially, is to learn English,” said Karine Sokpoh, founder of 402 Legal and the Midlands African Chamber. Sokpoh emigrated from Togo, a country in West Africa.
For example, Dekow Sagar, founder and executive director of the International Council for Refugees and Immigrants (ICRI), said many immigrants struggle to comprehend questions on job applications.
“Because what they consider employment is somewhat different,” he said. “In their head, they’re thinking, well, I’ve not worked for someone, I’ve never been paid a salary.
“A lot of them have experience in running their own businesses, and if you talk to them, you understand that this person was in business for an extended period of time.”
This language barrier keeps immigrants in what professionals have defined as “survival mode.”
Sokpoh said certifications, licenses and degrees from other countries are not always recognized across borders.
“These are mothers and fathers, and they can’t just sit around until they learn English, until they can become a nurse again or a licensed engineer and architect, and make money,” she said. “So what they do is they get the first available job, whether that’s McDonald’s or housekeeping or something else.”
Further, when relocating, immigrants lose their human capital, what Sokpoh calls the “three C’s:” capital, coaching and connections. Without those three items, it can be difficult for immigrants to navigate a system.
“It’s not only the language barrier,” said Lulu-A-Ferdous, program manager at ICRI. “It’s the regulations, the tax system, the whole legal process. It’s not only daunting, it can be overwhelming.”
Seeking Capital
For newly arrived immigrants, receiving a loan or funding for a business is difficult because credit scores, even if tracked in their home country, do not cross borders. Additionally, the loss of connections and networks challenges potential owners.
“They say most small business owners get funding by bootstrapping: family, friends, their own savings,” Sokpoh said. “It makes it tougher for [immigrants] to get that initial capital going, because they just don’t have that network available.”
Information from SCORE and the SBA confirm that immigrants are 72% to 83.5% more likely to be rejected when seeking expanded lines of credit, crowdfunding, new investors or online lenders. Eighty-one percent use what personal savings they have to start their business.
ICRI is tackling this challenge through the Refugee Microenterprise Development Program, funded by the U.S. Department of Health and Human Services.
In addition to distributing loans of up to $15,000, ICRI provides case management services, financial training and help through the legal process of starting a business.
The loan and payments are also reported to a third party so that refugees can begin building credit.
To qualify, immigrants must have entered the country less than five years ago. For those who have been in the country for longer, funding can still be a challenge.
The MAC’s Pitch Black! competition offers an opportunity for all minorities, including immigrants, to earn seed funding. Last year’s first place went to Okra African Grill founder, Nina Sodji, who emigrated from Togo in 1994 on a business visa.
Wealth of Information
With so many pieces to running a business in the U.S., there can be a lot to understand. Luis Franco, a bilingual business consultant at the Nebraska Business Development Center, said it can be so overwhelming that immigrants either don’t know what questions to ask, or don’t ask questions for fear of being judged or misguided.
Often, he said, when a Spanish-speaking individual arrives at NBDC and realizes there is bilingual staff on hand they are relieved. NBDC can help create items related to finances, such as projections and business plans.
“They know how to solve a problem or provide service,” Franco said. “However, tracking the numbers, figuring out the breakeven point, and when they’re going to be profitable, that’s where they struggle. The financial background.”
Many organizations, like the NBDC, don’t have the capacity to offer all the services needed, and therefore partner with other organizations to fill the gaps. For example, if a client needs a loan, Franco can send them to the Nebraska Enterprise Fund (NEF). If NEF has a client that needs help with financial projections, they can send them to NBDC.
I Need What?
With organizations stepping in to help immigrants create successful businesses, there is another problem emerging: equity.
Armando Salgado, founder of LingoDocs Marketing, began seeing the big picture in 2014 when he encouraged his clients and Hispanic community members to bid for work on Metropolitan Community College’s Fort Omaha campus expansion. He said at the time there was a percentage of work set aside for minority-owned companies in North and South Omaha.
But he soon learned that none of his contacts from South Omaha received the contract because they didn’t have proper documentation, such as license and insurance.
They didn’t know they needed it.
Soon after Salgado was asked by MCC to create a class given in Spanish to help close the information gap. For several years now he’s been teaching the Academia de Contratistas y Comerciantes (Business & Contractors Academy), which is an eight-week course covering everything from insurance & licensing, to accounting and marketing.
“Off of this course, what’s been coming out of it is [that I’m] building the United Hispanic Contractors Association,” Salgado said. “There’s no advocacy for the Hispanic community on construction.”
Additionally, he’s working on another course that would build on the basics, helping contractors become competitive in their field, and building their wealth and presence in Greater Omaha.
“Ninety-eight percent of them are first-generation immigrants,” he said. “My goal is to teach them how to earn and give back because I wouldn’t be here if it weren’t for people that went out of their way, and put their hands in the fire, for me to be here.”
All Hands on Deck
Often, Salgado said students or clients will come to him asking for advice on business matters because they’re not sure where else to go. For the Hispanic population, Salgado said it’s a lack of organized representation that needs to be addressed.
That’s why he helped found the Latino Economic Development Council and sits on several boards, including Heartland Workforce Solutions (HWS), College of Saint Mary, Cinco de Mayo, and the Business Ethics Alliance.
This same “hands on deck” mentality can be found at MAC, ICRI and the NBDC where a shared experience propels passion.
“Ninety percent of our employees and staff are refugees and immigrants. Our services, and our mindset, directly correlates to what we’re doing,” Lulu-A-Ferdous said.
In a survey conducted by SCORE and the Small Business Association, immigrant entrepreneurs listed having a business mentor as one of the top assets. Following advice from the SBA, ICRI is working to build a mentoring network.
“What we are envisioning in the next several decades is that these refugee-owned businesses will also empower, mentor and hire other refugees,” Lulu-A-Ferdous said.
ICRI is working on reaching out to successful immigrant business owners to create an advisory panel, and is partnering with HWS, MCC, and the AIM Institute to help with career navigation.
Across the board, professionals said the biggest need is help with the more technical aspects of running and growing a business.
“It requires a lot of skill,” Sagar said. “One thing we have been talking about is that if you’re administering a loan, you need that technical skill set, you need the legal expertise. If someone wants to volunteer with us to establish and guide us [we can] make what will probably be one of the leading programs throughout the nation.”
Franco from NBDC said that for individuals wanting to lend a hand, the best way to start is to connect with organizations.
“Once you build your network, you can understand where you can help,” he said. “You will see that organizations have their main capacities, or capabilities, and you can say ‘this is where I can partner with you, and this is where I can help your clients or your potential clients.’”
