Do you want to know how to support Latino-American entrepreneurs and accountants?
The Latino-American population and the number of Latin-owned businesses are growing rapidly in the United States. Unfortunately, many Latino business owners struggle with scaling their businesses. As an accountant, you can assist small businesses with their finances so that they can expand and optimize their businesses.
Gusto presented a fascinating episode of On the Margins: LIVE all about Latin-owned businesses and how accountants can support them. The episode featured Will Lopez, head of Gusto’s accounting community, and Caleb Newquist, Gusto’s Editor-at-Large. Additionally, Arthur Garcia, the co-founder of SOMOS and the Contabi Alliance, joined them.
In this article, you’ll learn about resources for Latin accountants, how accountants can empower Latinx communities, and how advisors can connect with Latin-owned businesses.
Resources for Latino and Latina accountants
Arthur Garcia has reached a significant level of success as a Latino American entrepreneur. His parents were small business owners who exposed him to the intricacies of running a business when he was a child. His parents were immigrants, and they lacked certain resources for financial advice and planning:
“[I was] exposed to all the different facets of the business. … Like, is this the most efficient way to do this? How can we leverage our cash flow? Should we think about franchising our restaurant? Who should be advising us on it? Should it be our accountant? Should it be a financial advisor? Often, it was family members who maybe have good intentions, … but access to those types of resources [is crucial]. … I think that’s one of the challenges of being first-generation [American] working in a family business with immigrant parents.”– Arthur Garcia
Arthur’s family didn’t have the same financial planning resources that other small businesses have, so they often turned to family members who may not have had the proper financial expertise to guide them. Community and equal access to financial resources are critical for small businesses’ success.
“I think for Latinx entrepreneurs and small businesses, you need to be networked.”– Arthur Garcia
Arthur co-created an invaluable community for Latino American accountants called the Contabi Alliance.
“The Contabi Alliance was founded to build a community, provide resources, and expand the scope for the [Latino] accounting community, tax professionals, bookkeepers, accountants in the U.S. During my tenure … working with the sales team and working with different channels, it provided the opportunity to work with accounting partners in Latin America as well as the U.S.”– Arthur Garcia
The Contabi Alliance provides Latino-American accountants and financial planning professionals with communal tools for success such as educational opportunities, a member directory for networking, and expert advice from Contabi Alliance directors like Arthur. The Contabi Alliance is expanding rapidly and providing Latino and Latina professionals with invaluable networking opportunities across North and South America:
“We’ve been able to grow and expand [the community] to over 70 independently-owned accounting firms across the Americas because of the opportunity that exists. … Businesses are expanding from the U.S. They want to start selling their goods or services in Mexico or Argentina. It’s like, ‘Hey, you can go within the network.’”– Arthur Garcia
Latinx accountants and financial planning professionals can utilize the Contabi Alliance to expand their networks and client bases.
Empowering Latinx entrepreneurs and Latino-American communities
The Latino-American business market is growing exponentially faster than other business segments in the United States. According to the International Society of Logistics, Latin-owned businesses in the US grew by 34%, while others grew by 1%. Despite there being many new and expanding Latin-owned businesses, very few are scaled:
“The Latino community is by far the fastest growing in terms of entrepreneurship rates, but you can also take a look at that and see that only 3% of those businesses are actually scaled. By ‘scaled,’ [I mean] they’re generating over a million dollars in revenue. … [So there are] lots of businesses, but they’re staying small.”– Arthur Garcia
One of the reasons why Latin-owned businesses have a harder time with growth is a lack of advisory and financial guidance. Arthur described his experiences marketing payroll services to Latino communities in San Francisco:
“What I found is that often these small businesses, … at a minimum, what they were getting from their accountant was an income statement and balance sheet. That was it every month. If they got anything, that’s it. There was no tax planning.”– Arthur Garcia
One of the barriers hindering Latinx businesses from getting expert advisory and financial service guidance is a lack of resources available in Spanish.
“Back in 2005, … it was a challenge for me as one of the only Latino leaders in that business to get the support and resources for marketing. The company I was working for was headquartered in Rochester, [NY], and I was out here in California. It’s like, ‘Look, I need these resources translated.’ Often, the feedback was, ‘Well, we just don’t have the support in Spanish.’”– Arthur Garcia
Another lingering problem that likely affects the success of Latin-owned businesses is a lack of Latino leaders in the accounting industry. Although many Latino Americans become accountants, few become partners in accounting firms:
“[Latinx Americans are] enrolled in universities. They get advanced degrees, and then they [become] CPAs, but then [an] even smaller fraction become partner[s]. … Companies need to mirror their customers and find a way to do that. There’s lots of talent out there. It’s just [takes] identifying [where to find them].”– Arthur Garcia
Arthur noted that although there are many talented and qualified Latino Americans in accounting and other professional industries, companies fail to equip themselves with the resources to find them:
“I was at a company. I said, ‘Look, I need a Spanish-speaking sales rep,’ but the recruiting team had no idea where to find Spanish-speaking, bilingual sales reps, and so it was hitting a brick wall. It wasn’t that they weren’t trying. It’s just they weren’t aware of the networks that exist, or they didn’t see it as an investment.”– Arthur Garcia
Companies need to recognize the importance of investing in resources to assist Latin-owned businesses and recruit Latino-American professionals.
How advisors can connect with and support Latin-owned businesses
Arthur and Will discussed how many Latin-owned businesses don’t utilize advisory services because of a lack of awareness and connection.
“[We need] more awareness [and] more folks that have earned the credibility to represent and to really communicate the needs of Latinx America. … There’s a majority of Latinx individuals that are bilingual that can work in a bilingual environment, but there’s definitely a translation that needs to occur from one point of view to another that speaks to Latinx America.”– Will Lopez
Because the majority of the Latin American population in the United States is bilingual, advisors and firms don’t necessarily need to advertise their services in Spanish per se, but they need to find a way to communicate and connect with Latinx businesses. Advisors and financial service providers can connect with Latin-owned businesses through targeted marketing. Arthur discussed an advertisement for QuickBooks that specifically marketed toward Latinx-owned businesses:
“The product does not have to be in Spanish, but the messaging is a great way to [connect with Latino American business owners]. … QuickBooks just did an ad campaign where they’ve got … three musicians talking about, ‘Stop doing your bookkeeping with Quaderno, and do it on QuickBooks,’ but they’re not your stereotypical mariachi [band]. … I’m beginning to see these technology companies reach out to the market they’re looking to with being sensitive and not being stereotypical. I’m starting to see some of those things change, but I think the industry has got a long way to go.”– Arthur Garcia
Although the outreach to Latin-owned businesses is improving, there’s still a significant opportunity and marketing gap. For example, there’s been a marked increase in accounting firms offering people advisory services for people-based operations, like payroll and benefits, but firms need to communicate how these services can assist the specific needs of Latinx-owned businesses. Having an advisor is also critical for raising capital:
“One of the other challenges is access to capital. As a founder that’s raising and has raised some money, you have to be ready to raise capital from [venture capitalist partners] and from angel [investors]. The other component where the accounting [advisory] comes in is [that], in order to be ready, you need to have your financials [from] previous years. You need to have your tax returns all set. You need to have a financial forecast. That’s, again, where the advisor comes in.”– Arthur Garcia
Advisors are crucial for expanding small businesses because they help growing companies raise capital. Accountants can support Latin-owned businesses by partnering with them:
“Support local businesses that might be Latino-owned or Latina-owned, … and then also seek out long-term partnerships.”– Arthur Garcia
Latin-owned small businesses need expert accountants and advisors to assist them with bookkeeping and people-based operations.
Learn more about supporting Latin-owned businesses
Although the Latin American business community is growing rapidly, many Latinx businesses have difficulty expanding. You can empower Latino business owners by partnering with them and offering accounting and advisory services. Your firm can form long-lasting partnerships by marketing directly to Latino business owners, and you can provide support and resources in Spanish, if possible.
If you want to start offering advisory services to Latinx-owned businesses but you’re unsure how to start, consider signing up for Gusto’s People Advisory Certification program. Join a community of accountants and bookkeepers building for the future with our People Advisory Certification and Gusto Pro’s modern tools. As a People Advisor, you can better serve your clients and their incredible teams. Get certified.