By Margaret Summers
Monday, December 19, 2011
Immigrant women are starting all kinds of businesses in the United States and leading American-born counterparts, a new report finds. Authors also find they face barriers and encourage policies to ease the way for this energized group of job creators.
(WOMENSENEWS)--Rubina Chaudhary started her business on a dare.
"I came here in 1987 with my husband, three young children and a newly minted MBA," says the Indian-born owner and president of the engineering firm MARRS Services in Fullerton, Calif.
At first she ran training seminars on business skills. After a client challenged her to start her own business, she decided to try the engineering consulting field "because it was dominated by males. I also wanted to make more money so I could send my children to good schools."
Today, Chaudhary has 50 full- and part-time staff; 78 percent are U.S. citizens and 35 percent are women. Her husband is her partner in the firm, which earns $6.5 million annually.
Chaudhary is part of a wave of immigrant women who started small businesses in the United States between 2000 and 2010, according to "Our American Immigrant Entrepreneurs: The Women," published this month by the Washington-based Immigration Policy Center, an arm of the American Immigration Council, an advocacy organization.
The report finds more immigrant women are at the helm of small businesses than American-born counterparts. The two groups had roughly equal ownership rates in 2000, with each claiming about 5 percent of overall business ownership, according to statistics in the report. By 2010 the rate for immigrant women had grown to 9 percent, while American-born female counterparts trailed at 6.5 percent.
Forty percent of all immigrant business owners were women by 2010, (1,451,091 immigrant men and 980,575 immigrant women), according to the report, and 20 percent of all female business owners were foreign-born.
This trend was flagged earlier in a 2007 report prepared for Intuit Inc. by Robert W. Fairlie, an economics professor at University of California, Santa Cruz.
The new Immigration Policy Center report was adapted from a chapter of the book, "Immigration and Women: Understanding the American Experience," by Susan Pearce, Elizabeth Clifford and Reena Tandon.
Although immigrant women are making business strides, the authors point out particular barriers they face and push for policies and incentives to ease the way.
Improving access to startup capital and credit, removing or reforming bureaucratic hurdles to startups and renewing efforts to support Small Business Administration incentives are key proposals by the authors.
In February, the Small Business Administration changed the guidelines for Women Owned Small Business, a certification program for businesses owned by women and economically disadvantaged women. The changes were designed to ensure that more government contracts went to these groups.
Rachel Owens is co-founder of the Orange County, Calif., chapter of the National Association of Women Business Owners, which aids female entrepreneurs, including immigrants. She says the Small Business Administration women's program still isn't clear enough.
"The government contracts, good luck finding them, must be awarded to a qualified (who says you are qualified?) women-owned small business if two or more such businesses bid on a contract," she says.
Owens adds that, "Once a woman becomes certified for this program she must find the right contracts and hopefully two or more will be bidding on them. There is no central list and each government department or agency has its own procedures. Getting through this system can be time consuming, and even with a contract, it could put a woman out of business trying to fulfill it."
Along with bureaucratic hurdles, immigrant women small business owners--like other female entrepreneurs--face difficulties obtaining startup capital. Only 3 percent of U.S. startup capital was invested in women-owned businesses, the report notes.
Immigrant women interviewed in the report cited racial, ethnic and gender stereotypes as stumbling blocks.
India-born Sheela Murthy, a Baltimore-based immigration attorney, owns a firm that generates more than $5 million a year in income. She was repeatedly asked by a broker, with whom she was meeting to discuss the possibility of investing her firm's profits in his brokerage, "Who really owns this company?" "I do," Murthy insisted. The stereotype persists although many immigrant female entrepreneurs have undergraduate and graduate college degrees.
Immigrant women also lack the "social capital" of business connections and networks that male entrepreneurs draw on for funding. They also often lack "cultural capital," as ethnic associations do not always offer support.
"You have to prove yourself outside of your group before receiving acceptance at home. That's what happens with us," says Chaudhary.
Organizations of ethnic female business owners, such as the Latina Business Women's Association and the Asian Women Association, assist immigrant female entrepreneurs, says Pearce, an author of the Immigration Policy Center report.
As with small businesses generally, the report says, those owned and operated by immigrant women have a beneficial "multiplier effect" of generating tax revenue and consumer activity, and stabilizing neighborhoods.
Small businesses are job creators; they generated 65 percent of new jobs in the past 17 years and employ half of all Americans working in the private sector, according to the Small Business Administration.
A significant number of immigrant female entrepreneurs come from Brazil, El Salvador, Korea, Mexico and Vietnam, the report's authors said at a recent press briefing. The states in which they are concentrated include Arizona, California, Florida, Georgia, New York and New Jersey.
"Most immigrant women entrepreneurs came to the United States as adults," says Pearce.
Many start their own businesses to get around barriers. "They feel frozen out of a conventional workplace, whether due to language barriers, racism, lack of certification in our system or other reasons . . . They may have encountered sexism as well," she adds.
Some seek independence and the flexible schedule of business ownership. "I don't want to work for anybody. I didn't want to punch a clock," asserted a woman quoted in the report.
Many immigrant women open restaurants or establish child and elder care or personal care businesses (hair and nail salons), fields which have traditionally employed immigrant women.
Pearce cites a survey that finds 57,549 women owning "eating and drinking places;" 35,289 running operations in real estate or insurance; and 14,938 owning "miscellaneous retail stores." Salary figures were not provided in the report.
Some, like Chaudhary, are venturing into atypical fields such as engineering, architectural and survey services (3,902), and legal services (4,537).
Chaudhary, like many, didn't have startup and venture capital to get going. She used personal savings to demonstrate to banks that she had startup funds.
"I couldn't get a credit line," she says in the report. "I had to create credit: borrow money and pay it off."
One bank that denied her a loan "is doing somersaults" to obtain her patronage, she says.
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Margaret Summers is a Washington-based writer.
Immigration Policy Center:
American Immigration Council:
Our American Immigrant Entrepreneurs: The Women:
Immigrant women fuel small business growth in U.S., article in RxPG News regarding the Robert Fairlie study, March 3, 2007: