2013 WBE Report

women-owned business enterprise report

presented by

Arizona Hispanic Chamber of Commerce Phoenix MBDA Business Center March 2013

Research conducted by:

WestGroup Research

2013

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FOREWORD

welcome to Wbe REPORT Do Women-Owned businesses face unique challenges? What are their strategies for success? What resources do they rely upon? Who do they mentor? Who are their role models? What does the future hold for women in Arizona’s business community?

These are just a few of the questions explored in the 2013 Women-Owned Business Enterprise Report—part of the Arizona Business Research Series commissioned by the Arizona Hispanic Chamber of Commerce and the Phoenix MBDA Business Center. The first report focused on MinorityOwned businesses since 2007. A coming report will examine Hispanic-Owned businesses in the summer followed by one more in that series featuring Family-Owned businesses. In the fall, the Chamber will release its annual DATOS: Focus on the Hispanic Market, a detailed analysis of consumer and demographic trends in Arizona’s Hispanic community.

The goal of these studies is simple but significant: to conduct research that offers decision-makers the data and analysis necessary to make informed choices about the future of Arizona’s economy.

To that end, the 2013 Women-Owned Business Enterprises Report provides insights into the challenges, strategies, characteristics and resources of this increasingly important segment of Arizona businesses. Given the state of Arizona’s rapid economic recovery, understanding how Women-Owned businesses fared during the recession and how their owners feel about the future is critical to the process of shaping our economy.

Arizona’s Women-Owned Business Enterprises (WBEs) are part of a demographic and economictransformation happening nationwide. In 2012, the U.S. was home to “more than 8.3 million womenowned businesses…generating nearly $1.3 trillion in revenue and employing nearly 7.7 million people”, according to a recent study commissioned by American Express. Over the past 15 years, the number of Women-Owned businesses has grown more than 54 percent and revenues are up more than 58 percent. Latina entrepreneurs, meanwhile, are the fastest-growing single segment of small business enterprises overall in the United States.

The study speaks to the nature and characteristics of entrepreneurship across our communities, but we also hear directly from women business owners who have spent most of the past five years struggling to survive the economic downturn.

The study’s most encouraging result may be the sentiment among a strong majority of Arizona WBEs that their “financial situation” will improve in the coming year.

Special thanks to the presenting sponsor of this study, Arizona Public Service, and Westgroup Research (which conducted the study) for being a part of this initiative.

As we consider the results of this report and the expanding role of Women-Owned Business Enterprises, even as we mark International Women’s Day, we believe this study can serve as a reminder to Arizona’s leaders that the future economic sustainability of our state depends more and more every day on the economic vitality of its Women-Owned businesses.

Gonzalo A.

de la

Melena, Jr., MBA

President & CEO Arizona Hispanic Chamber of Commerce

2013

Pamela Williamson, Ph.D.

President & CEO Women’s Business Enterprises Council-West

3

Acknowledgments

Acknowledgments Collaborating OrganizationS Arizona Hispanic Chamber of Commerce Arizona Public Service Company Phoenix Minority Business Development Agency Business Center WestGroup Research Women’s Business Enterprise Council – West

ENDORSING ORGANIZATIONS

SPECIAL THANKS

RESEARCH TEAM Gonzalo A.

de la Melena, Jr. Arizona Hispanic Chamber of Commerce

James e. Garcia

Arizona Hispanic Chamber

of

Commerce

of

Commerce

Arizona State University

Dr. Loui Olivas

Andrea Whitsett ASU Morrison Institute for Public Policy

Glenn Iwata WestGroup Research

Laura Fullington

Katy Gallert WestGroup Research

Alika Kumar Minority Business Development Agency Business Center

PRODUCTION TEAM

Michele Valdovinos

Arizona State University

Macerich

Carmen G. Martínez, 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

Michael Woodard Arizona Public Service Company David Garcia, Ph.D.

Monica S. Villalobos

Arizona Hispanic Chamber

for providing insights during the research

2013

Republic Media

Jaime Boyd Univision

Pamela Williamson, Ph.D. Women’s Business Enterprises Council – West AZHCC L atina Business Enterprises Committee

table of contents

TABLE OF CONTENTS Acknowledgments

4

Study Highlights

7

Conclusions

9

Study Findings section i. cHALLENGES: What types of challenges have women-owned business enterprises (WBEs) faced?

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section ii. STRATEGIES AND SUCCESSES: What steps have these businesses taken to succeed?

17

section iii. Resources and Role Models: Which resources have WBEs relied upon to run their businesses?

22

section iv. Business Characteristics: What are the characteristics of WBEs?

30

section v. Owner Characteristics: Who owns these business enterprises?

39

section vi. The Future: What do these owners think about the future of their business?

41

Business Profiles: Great Impact

10

Axis Employment

28

Naturopathic Vitality Wellness Center

45

Study Background and Methodology

50

End Notes

53

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©2012 Cox Communications Arizona, LLC, dba Cox Communications. All rights reserved.

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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

Positioning the business – Most WBEs took advantage of being Women-Owned businesses by network-

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.

ing with other WBEs (56%), and using their status to pursue contracts (42%). In 2012, significantly more companies promoted their WBE status (41%) than in 2007 (25%).

Surviving and growing – The top accomplishments WBEs mentioned were the longevity of the business

Unique WBE challenges – Approximately one in four WBEs experienced challenges specific to being a Woman-Owned business – being taken seriously, overcoming negative perceptions, and/or being treated differently.

The types of challenges mentioned included customers/prospective customers preferring to speak to a man or customers/prospective customers did not feel the company was

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.”

capable of doing the job because it was woman-owned.

Strategies/Accomplishments

Resources/Role Models Asking for help – Half of the WBEs (50%) sought

Work harder/Persevere – The most common

assistance from outside organizations to help with their

response to the challenges faced by WBEs was to prove the

business. Resources used included industry organizations

challengers wrong through hard work, perseverance and

(31%), federal government (SBA 20%), and local govern-

showing they can do the job.

ment/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

advertising in 2011. The average amount spent on marketing/advertising was $12,720 in 2011.

the question, “If you could have any two (or three) people

Changing communication media – WBEs

in this world visit your business, and their intentions were

used a broader array of media to advertise in 2011. Use

specifically to help your business, who would you want

of the Internet to reach customers increased to 77% in

these people to be?”

2011 from 44% in 2006. On the other hand, use of newspaper advertising dropped to 30% in 2011 from 46%

•

“Politicians” was the “category” of individuals that

in 2006.

was mentioned most often, followed closely by

Owner Characteristics

business

Marketing and financing – WBEs’ greatest

Characteristics of the owners of WBEs included:

needs were help with marketing their business (mentioned by 30%) and finding capital (14%). While these needs

•

Half had college degrees (53%).

were common to most businesses, these also represent the

•

Median age was 57 years old.

best opportunities to help WBEs.

•

Median income was $72,520.

•

Most businesses are self-funded and rely on personal loans or profits from the business to finance expansion or any capital improvements/ investments.

BUSINESS Characteristics Almost half (42%) were sole proprietorships; one quarter (27%) were S Corporations.

•

WBE owners were twice as likely to have a college degree and had 50% higher annual income compared to the state’s median household income.

THE FUTURE

Characteristics of the typical WBE included: •

Compared to the general population –

Median revenue in 2011 was $155,910, which was higher than $119,900 in 2007.

• 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 finan-

•

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

on expanding their business during the next five years.

businesses (56%)

Only 9% planned to shrink their business.

•

Half conducted business nationally (46%)

•

One-fifth conducted business internationally (21%

cial situation would improve in 2007).

• Expansion plans – Almost half (47%) planned

• Adding jobs – In the next two years, half (49%) of the WBEs planned on adding at least one person

8

Marketing still important – More than two out

to their staff; only 4% planned on decreasing their

three (69%) WBEs spent money on marketing and

number of employees.

2013

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

¡Great Impact!, Inc. Owner: Teresa Ornelas What is ¡Great Impact!, Inc.? ¡Great Impact!, Inc. provides products and services to help organizations meet their marketing results through promotional products.

Some of these promotional product solutions include adding logos and messaging to marketing materials, such as

clothing items, awards, mugs, food products, and golf items. Services we provide include order fulfillment, inventory management, and online company store programs. We are a family-run business with five employees and have certifications as both a Woman Business Enterprise and a Minority Business Enterprise.

What is the history of the company?

My professional background includes thirteen years in the corporate world, as a business territory manager in the tech industry. I took a break to be a stay-at-home mother, but as my kids began to grow, I decided to start a home-based business.

I hoped to combine the best of my professional and personal worlds.

The business began in early 1999 as a reflection of my passion for gift-giving and my background in marketing. As I traveled to gourmet food shows across the United States, I noticed a gap between the products available and a need to provide personalized messaging to customers.

The business initially

focused on the use of pre-packaged gourmet foods as marketing tools (e.g., gourmet cookies with logos and messages). Early on, we branched into the ad specialty business when our customers began asking if we could also provide customization on items such as mugs and pens. Much of our diversification is based on our desire to satisfy clients’ needs to the highest possible level. As customers asked about new products and services, we responded and kept growing to make them available.

¡Great Impact!, Inc. TERESA ORNELAS [480] 777.2226 124 W. Orion St. #F8 Tempe, Az 85283 Photo by James e. Garcia, AZHCC

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business profile

¡Great Impact!, Inc., • TERESA ORNELAS The company soon outgrew our home and required that we move

a certification from Women’s Business Enterprise National

into commercial space. In late 2000, we moved the business from

Council (WBENC) which has connected me to a broader range

my home and into our current location.

of business executives and even more mentoring opportunities.

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

The challenges we face are common to all businesses.

lost our top six customers overnight. Fortunately, we had metrics

I really have not had many negative experiences being a

in place to help us determine how much time we had to find

minority and Woman-Owned business. I can only think of the

solutions and develop a plan. We survived the downturn primarily

benefits associated with being a part of the local Hispanic

through the relationships and trust we had built with our suppliers

community and network of woman business organizations.

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.

What has been your biggest success with your business?

Being happy to go to work and build the business we can all be proud of have been my greatest successes. I also feel that I have been able to build a positive culture for the business.

How has being a minority/woman affected how you run your business?

I am a third generation Hispanic and have found the Latino

What advice would you give to a Latina wanting to start a business?

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

1. Know what you want to build – Spend time developing your business plan so that you know what type of business you want to build and why you want to build it. It is easy to lose sight of this over time.

based on core values. Arizona Hispanic Chamber of Commerce (AZHCC) and Grand Canyon Minority Supplier Development

2. Values are extremely important – Knowing your values

Council (GCMSDC) have both helped me develop a strong

will help guide you when looking for new customers,

network of contacts in the business community.

employees and suppliers.

In the same way, my involvement in National Association of Women Business Owners (NAWBO) especially helped me

3. Develop a reporting system to measure your success –

as I was beginning my business. I was able to build a strong

Be disciplined to review leading and lagging indicator

network of women business owners who have been a good

measures every week. And be ready to make needed

resource to me. ¡Great Impact, Inc. has also recently received

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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CHALLENGES

section I • challenges

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CHALLENGES

section I • challenges

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STRATEGIES AND SUCCESSES

SECTION II • Strategies and Successes What steps have these businesses taken to succeed?

Working harder – The primary steps taken to overcome the barriers associated with being a WBE involved more of an “internal/behind-thescenes”, self-improvement, longer-term approach - work harder, learn more/ gain more education, and build a good reputation. These responses were similar to those mentioned in 2007.

Perseverance – The main advice they would offer new WBEs who are getting started was: be determined and not give up (21%), work harder (11%), do not let your gender affect your business (11%), and learn as much as you can about your industry/field (10%)..

Positioning the WBE status – Companies used their WBE status to promote, network and target their business.

• Network with other WBEs – 56% • Use WBE status to pursue contacts – 42% • Promote their WBE status – 41% Significantly more WBEs were promoting their WBE status in 2012 (41%) than in 2007 (25%).

Surviving – The most significant accomplishments WBEs felt they achieved were the longevity of their company and to stay in business throughout the economic downturn (48%). The second most often mentioned accomplishment was to have a growing, financially successful business (35%).

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STRATEGIES AND SUCCESSES

section II • STRATEGIES AND SUCCESSES

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. I’m 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 we’ve 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.

Advice to WOMEN-Owned Start Ups WBE comments Work hard, give good service, and satisfy the customer and myself. See that everything is taken care of and in good order. Take care of any complaints that come up.

Don’t be discouraged. You just keep doing it and keep getting your name out there. Let people know that you are available. Don’t give up. You BUILD your business; you’re not given it. Building a business is working for it and following through on promises.

Do a detailed business plan; the devil is in the details. If you don’t know what the small little tiny details are, those are going to be the things that will stop you from being successful. People like to focus on what they like to do. Sometimes they don’t focus on what the customer wants. The other thing they don’t do is figure out cash flow and that is so huge. You can get messed up in cash flow and get your business turned upside down by not paying attention to it. If you can’t perform, people won’t use you.

Have six months cash in the bank before you start out. Don’t take no for an answer. Don’t wait for the phone to ring. Network.

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STRATEGIES AND SUCCESSES

section II • STRATEGIES AND SUCCESSES

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STRATEGIES AND SUCCESSES

section II • STRATEGIES AND SUCCESSES

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STRATEGIES AND SUCCESSES

section II • STRATEGIES AND SUCCESSES

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resources and role models

section III • Resources and Role Models Which resources have MBEs relied upon to run their businesses?

Reliance on outside help - Half of the WBEs (50%)

Trusting politicians – “If you could have any two (or

have sought assistance from outside organizations to help with

three) people in this world visit your business, and their intentions

their businesses. The top resource they have relied upon was

were specifically to help your business, who would you want these

trade organizations and industry publications unique to their line

people to be?” The top “category” of people chosen by WBEs

of business (31%), followed by federal government (Small Business

was politicians (18%) (NOTE: Survey was conducted in the midst

Administration 20%) and local government and chambers of com-

of the 2012 election season). This was followed by business

merce (17%).

advisors (16%), business leaders (16%) and TV/movie personalities

Need help marketing and financing – When

(14%).

asked the type of information they would find beneficial, one-third

•

President Barack Obama was the top individual choice

mentioned needing help marketing/increasing sales (30%). The

(10%). In 2007, only one WBE mentioned the “presiden-

second most often mentioned area was how to gain access to

tial candidate” Obama.

capital (14%).

•

Other individuals mentioned in 2012 were Oprah Win-

Self -finance – Most WBEs fund the business either through

frey (8%), Donald Trump (5%), Bill Gates (5%), and Mitt

personal/family loans to the company or from the profits gener-

Romney (4%).

ated by the business (49%). Among those using more traditional sources, 16% borrowed from commercial or community banks.

•

•

When applying for a loan, 16% did not feel they were

In 2007, the top choice was Oprah Winfrey (9%), Bill Gates (7%), Donald Trump (5%) and Janet Napolitano (5%).

treated with respect during the application process.

If you could have anyone in the world visit your business…

WBE comments Barack Obama, because he is the President and I would like to be able to talk to him regarding my concerns with insurance.

Oprah Winfrey, because I would like to get some money to expand.

I would have Steve Jobs, because of his business acumen – He was so successful with Apple.

Bill Gates, because of his business knowledge and success building working teams.

Warren Buffet, because of his ability to market his business.

I would like to talk with all three of them, because they are able to market their brand.

Oprah, because she is always looking to help small business, and people that are trying help themselves.

A bank, to see what is really going on in the small businesses.

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resources and role models

SECTION III • RESOURCES AND ROLE MODELS

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resources and role models

SECTION III • RESOURCES AND ROLE MODELS

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resources and role models

SECTION III • RESOURCES AND ROLE MODELS

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resources and role models

SECTION III • RESOURCES AND ROLE MODELS

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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 company’s 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.

What is the history of the company?

After graduating from college with a Communication Degree, and finding myself not liking the field of broadcasting after a few internships- I was really unsure of the next step and what to do.

My friend at the time, who is now my husband, introduced me to one of his patients who was a VP for a major staffing firm. I went to work for her as a sales/recruiting consultant and fell in love with the industry.

About a year later, I was recruited away

from that organization and became the Chief Operating Officer of a boutique staffing agency in Scottsdale that specialized in executive hires. After the September 11th tragedy, the staffing industry came to a halt as companies were hesitant to hire during times of national uncertainty. The company I was working for closed its door shortly afterwards. With so many ideas and goals that were never allowed in the corporate world, I knew it was time to do my own thing!

In 2002, I decided to start Axis Employment Services with $30K borrowed from my credit cards. Most of my clients followed me to Axis Employment and I am proud to say that they are all still with me today!

How did the economic downturn affect Axis Employment?

Photo by Andrea Contreras Design

Axis Employment Services, LLC Tran Tran

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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I consider myself very fortunate that Axis Employment not only survived the economic downturn, but was able to prosper during this difficult time. We have experienced continuous growth and increased revenue year after year at a time when the industry struggled overall.

business profile

AXIS EMPLOYMENT • TRAN TRAN

To what do you contribute the success of the company?

What have been your biggest challenges as a minority-owned business?

I have held the same vision and philosophy for the past 11 years,

I do not feel that being a Minority-Owned business has created

Good Business Revolves Around Good People. I believe that

specific challenges. In fact, the MBE status has worked in our

the employees are the heart and core of a successful organiza-

favor. Traditionally, we have not promoted our business as a MBE,

tion. Traditionally, staffing companies are solely focused on the

but we do see the potential. As we look for opportunities, I think

client (i.e. the company looking to hire employees), but I wanted

our company’s MBE status will help open doors. We will have the

to position my company differently. Our focus is to find quality

opportunity to bid on certain projects that other companies without

candidates and make the fit for them based on their goals and strengths. We also value a balance of professional and

the MBE status would not have.

personal success for our candidates because a happy employee is a

We also find that our MBE status helps many of our clients to fulfill

productive and loyal employee! When we make a placement, it

their diversity goals and that brings an added value to partnering

is the right match for both candidate and client and the marriage

with us.

lasts! I think that is the foundation of any successful business and that has not changed for us at all; we continue to set our sights on that focus and on that goal.

The vision of “focusing on the candidate” not only keeps our clients coming back, but has also generated new business. Many of our candidates have moved to higher level positions or to other departments and have become clients. 90% of our business is referrals from happy clients!

What advice would you give to someone starting up a business?

Stay true to your vision— Set out a really clear focus and stay true to that. Avoid solely focusing on the bottom line. As businesses grow, they tend to lose sight of where they were and what they had initially set out to do. I think if you stay true to your vision, you will not help but be a success.

How has being a minority affected your outlook when running your business?

Have passion for what you do— Find what you love to do and

I was a refugee from Vietnam and came to the United States when

passion we have for making our clients and candidates happy is

I was eight years old with my parents and five siblings. Except for

what helps drive the company’s continued growth.

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)

just plug away at it and don’t let anybody tell you no. I think the

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

on scholarships and then achieved professional success. I have

rolling down at the end of the day. I think that is an important

learned through hard work and perseverance that, in this country,

reminder of the determination and focus that is needed each day

you have the opportunity to climb high.

when running a business.

2013

29

BUSINESS CHARACTERISTICS

section Iv • Business Characteristics What are the characteristics of MBEs? A key screening criterion for survey participants was that the businesses had to have at least one full-time employee. In addition, small businesses represented the largest share of number of firms who were surveyed. The profile characteristics tended to reflect smaller size businesses.

are within Arizona, 32% outside of Arizona and within the U.S. • Among those who conduct business internationally… o Not just Mexico - Half conducted business in Europe (53%), followed by Canada (45%). Asia (29%) and Mexico (26%).

Companies surviving the economic downturn - A profile of the typical Women-Owned

o Growth in European customers - WBEs conducting business in Europe increased significantly since 2007 (53% in 2012, 34% in 2007).

business included: •

Almost half (42%) were sole proprietorships; one quarter (27%) were S Corporations.

o Everywhere - Over one quarter (28%) categorized their international customers as “all around the world.”

•

Median revenue in 2011 was $155,910, which was significantly higher than $119,900 in 2007.

•

Median number of employees was 3 people.

o Still within Arizona - More than half of the sales of these international businesses were still within Arizona - 62% of sales are within AZ, 32% of sales are outside of AZ, and within US, 6% are international.

•

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%).

Arizona WBEs conducted business both nationally and internationally – Almost half

Marketing still important – More than two out of three (69%) WBEs spent money on marketing and advertising in 2011. The average amount spent on marketing/advertising was $12,720 in 2011, which was slightly higher than the $10,610 in 2006. (NOTE: WBEs were asked about their budgets in the last full calendar year. For the 2012 survey, WBEs were asked to comment about their 2011 marketing/advertising expenditures).

(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.

• Increasing Spanish-language marketing/ advertising – The percentage of WBEs conducting Spanish-language marketing and advertising increased to 13% in 2011 from 8% in 2006.

•

Among those who conduct business nationally…

Changing communication media – WBEs used

o Close to home - Most conducted business in the Southwest (66%), including California, Colorado, Nevada, New Mexico and Texas.

a broader array of media to advertise in 2011. Use of the Internet to reach customers increased to 77% in 2011 from 44% in 2006.

On the other hand, use of newspaper advertising dropped to 30% in 2011 from 46% in 2006.

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

30

2013

WBEs used Internet communication tools/media to reach customers – 62% promoted through their website, 49% through social media (e.g., Facebook), and 17% used online promotions (e.g., Groupon, Yelp).

•

Usage of other media also increased significantly in 2012, including personal selling (41%), event sponsorship (40%), and direct mail (36%).

Business Characteristics

SECTION IV • BUSINESS CHARACTERISTICS

WOMEN-OWNED BUSINESSES 2007

2012

495

421

Sole Proprietorship

51%

42%

Corporation

16%

13%

S Corporation

17%

27%

Partnership

7%

8%

LLC

8%

9%

$119,900

$155,910

3

3

11 years

16 years

Family Owned

59%

53%

Inherited from Family

N/A

18%

Home-Based

50%

46%

Non for Profit

3%

4%

Retail Consumers

N/A

54%

Business

N/A

56%

Goverment

N/A

31%

Conducts Business Internationally

20%

21%

Conducts Business Nationally

48%

46%

Sample Size OWNERSHIP

MEDIAN REVENUE MEDIAN NUMBER OF EMPLOYEES Median age of company BUSINESS DESCRIPTIONS

CUSTOMER DESCRIPTIONS

GEOGRAPHIC SCOPE

Bold figures are significantly different compared to 2012 N/A – Not asked in 2007

32

2013

Business Characteristics

SECTION IV • BUSINESS CHARACTERISTICS

2013

33

Business Characteristics

SECTION IV • BUSINESS CHARACTERISTICS

34

2013

Business Characteristics

SECTION IV • BUSINESS CHARACTERISTICS

2013

35

Business Characteristics

SECTION IV • BUSINESS CHARACTERISTICS

36

2013

Business Characteristics

SECTION IV • BUSINESS CHARACTERISTICS

2013

37

The Arizona Hispanic Chamber of Commerce

We speak the language The language...of Business

ROSA MACías

CEO, Mueblería del Sol AZHCC Member

‘I speak the language’

Join Today at www.AZHCC.com or [602] 279.1800

OWNER CHARACTERISTICS

section v • Owner Characteristics Who owns these women-owned business enterprises?

Characteristics of the owners of WBEs included: •

Half had college degrees (53%).

•

Median age was 57 years old.

•

Median income was $72,520.

Compared to the general population - WBE owners were twice as likely to have a college degree and had 50% higher annual income compared to the state’s median household income *.

•

2009 Arizona education attained - 26% college degree 3 compared to 53% among owners.

•

2011 Arizona median household income - $46, 709 4 compared to the $72,520 among owners.

* NOTE: The income for WBE owners is not a direct comparison with the overall household figures because the state’s 2011 median income accounts for multiple wage earners in the home compared to the WBE owner’s individual income. The difference of WBEs household income would be even greater than Arizona household income.

Impact from the economic slowdown - Demographics of the WBE owners did not change significantly from 2007 to 2012. One “no change” figure that stood out was that median household of WBEs did not increase in 2012 ($72,520) compared to 2007 ($71,200).

2013

39

OWNER CHARACTERISTICS

SECTION V • OWNER CHARACTERISTICS

WOMEN-OWNED BUSINESSES

Sample Size

2007

2012

495

421

54 years

57 years

Demographics Median Age Percentage with college degree or more Education Median Household Income

46%

53%

$71,200

$72,520

93%

91%

Culture/Language Born in U.S. Bolded figures are statistically different.

40

2013

THE FUTURE

section vI • The Future What do these owners think about the future of their business?

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).

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.

2013

41

THE FUTURE

SECTION VI • THE FUTURE

42

2013

THE FUTURE

SECTION VI • THE FUTURE

2013

43

& I N

P A R T N E R S H I P

W I T H

P R E S E N T

AZ Million DollAr CirCle of exCellenCe Leading

the

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

Naturopathic Vitality Wellness Center Owner: Dr. Judy Hinojosa-Sinks What is Naturopathic Vitality Wellness Center?

Naturopathic Vitality Wellness Center is a clinic that integrates holistic medicine with traditional medicine practices to treat patients through the use of natural therapies and modalities. We provide a wide range of services, including wellness check-ups for the entire family, lab work services, well-women exams and physicals for men, women and children. We offer numerous therapies including: acupuncture, hydrotherapy, intravenous therapy (such as vitamin C therapy), as well as B-12, B-6 and weight loss injections.

We use homeopathic remedies to bring the body back to balance. We also work with patients on nutrition and diet and offer services for detox/cleansing and natural hormonal balancing.

We take great pride in treating the whole person naturally and heal the person with a blend of powerful tools and therapies with the use of homeopathy, IV, injections, nutritional supplementation and other traditional and holistic modalities.

Focusing on women’s medicine we find the root problems and start the healing process. Some common areas we have phenomenal success include; hormone balancing, thyroid, fertility, adrenal, energy, weight loss and stress management.

What is the history of the company?

My exposure to Naturopathic Medicine began in my native country, Ecuador, where holistic medicine is more prominent.

I came to the United States when I was 18 to go to college at ASU and received my undergraduate in Psychology and Women Studies graduating with Honors. My goal was to be in a field where I could serve others and the community and studying psychology seemed to be the best choice. After graduating from ASU, I started pursuing my interest in Naturopathic Medicine and decided it was a perfect match to integrate treating the mind as well as the whole person and bringing people back to balance through natural modalities.

In 2008, I graduated from the Southwest College of Naturopathic Medicine in Tempe with Honors and began working for a physician in the Valley where I started treating my own patients. After about a year and a half, I opened my own practice. It was always a dream of mine to have my own holistic wellness center where I could serve the community by bringing together all the amazing knowledge and natural healing I had learned through my education and life experiences. We opened the clinic three years ago and had 200 patients during the first year. We have grown to over 1,000 patients by our third year.

2013

Photo by James e. Garcia, AZHCC

Naturopathic Vitality Wellness Center Dr. Judy Hinojosa-Sinks 2165 E. Warner Rd. Suite 104 Tempe, AZ 85284

45

business profile

Naturopathic Vitality Wellness Center • Dr. Judy Hinojosa-Sinks

To what do you attribute your success so far?

I believe that it is my life’s work and purpose to give hope and healing to others. I truly live my life’s purpose and it fuels the success that we have been blessed with. Closely allied with my purpose is my passion to serve others. I have found my success has come from serving the community and not from being driven by financial motives. My purpose has been to share with everyone the amazing power Naturopathic Medicine has to offer and provide my patients with effective and transforming ways to heal the body.

The other driving strength for success has been the healing results of my patients, watching one go from hurting to vibrant health and then being able to share the experience with them boosts my passion to new heights. That has been very inspiring.

What advice would you give to someone starting up a business?

I would advise those starting a new business to save money, you need enough money to last for at least a year, and to be vigilant about cash flow. I would suggest trying to get your customers to pay in a timely manner, which will allow you to have enough cash flow to pay your employees and other business expenses.

I would also recommend having an in-depth knowledge of your customer base. Have a good clear understanding about who your customers are and who you are serving….know how to provide that service in a timely manner and always be 100% professional.

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.

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.

What have been your biggest successes as a company?

Every day is a successful one when my doors are open.

I enjoy being able to run my own business and I am proud that the company has endured over 15 years. I really like what I do and I enjoy it, so I get up and come to work every day having fun, doing what I need to do…I don’t look at it as a challenge.

46

2013

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.

What advice would you give to a Latina wanting to start a business?

1. Establish boundaries — There are many challenges when starting a business. Try to establish some level of boundaries between your business and personal life so that you do not compromise your own wellness and health.

2. Surround yourself with the right people — Networking is very important when starting your own business and there are many organizations who are interested in helping provide opportunities to meet the right people. Having a good family support system is also important in achieving success.

3. Don’t give up — Focus on your passion and the hard times will eventually become easier. Your desire and commitment will help you make it happen.

MORE COVERAGE THAN ALL OTHER NETWORKS COMBINED.

IN OVER 450 MARKETS.

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. Š 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.

2013 Latina Business Enterprise Members: Olga Aros, ORA Worldwide Consultants, LBE Chair Sandra Gonzalez, State Farm, LBE Vice Chair Yvonne Faustinos, American Associates Real Estate and Investments Ruth Enriquez, Bank of America Marisa Benincasa, Cancer Treatment Centers of America Ana C. Marshall, Merrill Lynch Connie Parra, Humana Christina Arellano, Arizona Hispanic Chamber of Commerce

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

Latina-Owned Business Enterprises Latinas make up the single largest minority group among WBEs and represent approximately 14% of those responding to this survey. The following summary highlights some of the differences between Latina-Owned businesses and all other WBEs.

Challenges/Needs

Firmagraphics/Demographics

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).

Larger, Local, and Family Centered – Differences in company firmagraphics included: •

Latina-owned businesses compared to median of 3

Overcoming negative perceptions – Latinas were more likely to feel that overcoming negative perceptions of being a woman-owned business was a significant

employees among all other WBEs. •

$143K among all other WBEs. •

tion, they were more likely to want information about how to get loans/lines of credit from outside organizations (25% compared to 12% among all other WBEs). These companies

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

were also more likely to have used banks rather than other

compared to 15% among all other WBEs.

sources to secure financing for their companies (26% compared to 14% among all other WBEs).

More likely to only conduct business in Arizona – 61% among Latinas compared to 48% among all

feel they were treated with respect when applying for a loan (62% compared to 41% among all other WBEs). In addi-

Higher annual revenues – Median revenues of $224K in 2011 among Latinas compared to

challenge (40% compared to 25% among all other WBEs).

Working with banks – Latinas were more likely to

More employees – Median of 5 employees among

Bilingual, younger, more first/second generation – Differences in the company owners in-

THE FUTURE

cluded:

Optimistic – Latinas were significantly more optimistic about their companies’ futures - 72% anticipate their com-

•

Bilingual – 76% among Latinas compared 21% among all other WBEs.

•

Younger age – 52 years old (average) among

pany’s financial situation will improve compared to 55%

Latinas compared 57 years old among all other

among all other WBEs. They were also more likely to plan

WBEs.

on expanding over the next five years (68% compared to

•

More first and second generation among owners –

44% among all other WBEs) and add employees in the next

49% among Latinas compared to 11% among all

two years (73% compared to 46% among all other WBEs).

other WBEs.

2013

49

Study BACKGROUND and Methodology

Study BACKGROUND and Methodology What is the history behind the study?

Dr. Loui Olivas began conducting research with Hispanic businesses in 1990 as an annual project with the Hispanic Research Center at ASU. In 2005, the study expanded significantly when Salt River Project (SRP) became the corporate sponsor. The methodology was switched from a mail to telephone surveys and the sample size of businesses increased at this time.

The study evolved from 2005 to 2007 to include both Hispanic and non-Hispanic minorities as well as Women-Owned businesses.

From 2008 to 2011, ASU and SRP chose not to conduct the research after earlier trending analysts identified minimal changes in demographics and attitudes from year-to year.

The Phoenix MBDA Business Center and Arizona Hispanic Chamber of Commerce became the primary project coordinators for the 2012 study. This year’s research is a statewide study of Arizona women and minority businesses enterprises. Results were compared with previous years when applicable.

The results of the Minority-Owned business have been presented in a separate report.

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 Arizona’s leaders in private industry and government that the economic sustainability of our state depends on the entrepreneurial vitality of its minority communities.

What businesses participated in the survey?

This study focuses on businesses in Arizona that have at least one full-time employee. It is important to note that the definition of what is considered a “business” varies widely among sources and might present a challenge when comparing data and findings.

A total of 421 randomly chosen WBEs were interviewed. The overall survey results have a margin of error of +/- 4.8% at the 95% confidence level. Subgroups with smaller sample sizes have a larger margin of error. Results were weighted to match the actual WBE distribution by County and Minority/non-Minority-Owned Businesses5 from the U.S. Census.

The following is a breakdown of various groups that participated in the research.

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2013

Study BACKGROUND and Methodology

STUDY BACKGROUND AND Methodology

* The classifications provided above are based on the description of the business using two-digit NAICS codes.

NUMBER OF PAID EMPLOYEES

Unweighted Percent response

1 to 4

58%

5 to 9

19%

10 to 19

11%

20 or more

10%

Don’t know/refused

<1%

Note: Rounding results in totals greater or equal to 100%

2013

51

Study BACKGROUND and Methodology

STUDY BACKGROUND AND Methodology

Who was interviewed for the survey?

Telephone interviewers screened respondents in order to reach the “highest level” person in the organization.

In most cases, interviews were conducted with the owner/Chief Executive Officer or President.

POSITION

Percent response*

Owner/CEO/president

86%

Administrator/manager

7%

Board member/executive management

6%

Other

1%

* Note: Some respondents listed more than one position within the company.

Where/how was the sample drawn for the study?

The sample used for this study was purchased from Scientific Telephone Samples. The following organizations supplemented the sample by providing contact lists: •

Arizona Hispanic Chamber of Commerce

•

Phoenix MBDA Business Center

•

Associated Minority Contractors of America

What method WAS used to conduct the research?

Interviews were conducted by telephone. This method was chosen because: •

Screening was required to reach the highest level executive in the organization.

•

Interviewer probing was needed in order to capture the full stories of these businesses

When was the survey conducted?

The surveying began on August 24, 2012, and was completed on October 22, 2012.

Was an incentive used to encourage participation?

Respondents were given the option to include their name for a drawing for one of 10 $100 gift certificates.

Contact Us For more information about the research, please email your questions or requests to: Research@azhcc.com.

52

2013

END NOTES

End Notes 1

Salt River Project, 2007 SRP Arizona Business Study - Focus on Women-Owned Businesses, 2007.

2

Ibid 1.

3

United States Census Bureau, Education Attained by State, The 2012 Statistical Abstract, The National

Data Book, 2012, http://www.census.gov/compendia/statab/cats/education/educational_attainment.html.

4

Amanda Noss, “U.S, Census Bureau, Household Income for States 2010 and 2011,” American

Community Survey Briefs, United States Census Bureau, September 2012.

5

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.

2013

53

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Choice: One size does not fit all Each employer’s situation is unique so there is no single “one-size-fits-all” approach. The key to choosing the right plan is finding a solution that’s affordable, reliable and flexible enough to meet the needs of your employees.

Competition: new, targeted network options Small businesses are turning to new, more localized and cost-effective network options that offer up provider networks that can provide evidence-based care more efficiently. This option works well for employers when their employees live or work in or near the provider-network service area.

A good solution for many small businesses looking to cut costs is to choose a localized network option.

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Clout for small Businesses A good solution for many small businesses looking to cut costs is to choose a localized network option. In 2011, 20 percent of employers that offered health benefits included a localized network option.1 Localized networks provide health plans that can benefit both small businesses and their employees.

With a 97 percent employer satisfaction rating, learn how BCBSAZ can provide you with the service of a premium brand and the affordable products to keep your business healthy.2 More information is available at azblue.com.

1 2

Kaiser/HRET Employer Health Benefits 2011 Annual Survey.

BCBSAZ employer/GBA survey, 2012.

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NOTES

Notes

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NOTES

Notes

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