Community Development

Encouraging Success from Latino Businesses

October 9, 2018  • Jean Horstman

This is the final post in a series following the 2018 America’s Future Summit: Unlocking Potential, Advancing Prosperity. Jean Horstman, Founder and Former CEO, INTERISE., spoke at the event on a Facebook Live discussion about female entrepreneurs. You can view the program book from the event, which includes the day’s agenda and speaker bios, and watch the event recording. A white paper exploring various challenges and solutions discussed during the summit will be released later this year.

The United States is known for being a country that lauds innovation, entrepreneurship, and new business ideas. The IRS and many states offer economic incentives to encourage business development and new enterprise. But many individuals struggle to acquire the capital, maintain a workforce, and manage their finances to sustain their business. What’s more, scaling up a business so that its profits continue to increase and yield more earnings from year to year can be incredibly difficult, especially for first-time business owners and those with insufficient training or guidance. Indeed, 50 percent of small businesses fail by their fifth year. Of those businesses that do survive, 73 percent of them are owned by one individual.  Only 11 percent of all new small businesses become employer firms—creating 60 percent of the private sector’s net new jobs over the last two decades, according to the Small Business Association.

How can government and communities encourage more success of small businesses? What are effective ways to equip communities of color and first-time business owners with the skills needed to build business that don’t merely survive, but actually thrive?

A resilient and equitable economy requires that as many of these small employer firms—especially those with minority owners and/or located in lower-wealth communities — achieve the scale required to thrive in both boom and bust times.

There are market-based business development services like Vistage or the Young Presidents Organization, but they are often cost-prohibitive options.  A growing network of intermediary organizations are bridging the gap with the mission of integrating small business owners (SBOs) into the local and regional ecosystems that accelerate the growth of established small businesses, defined by the Edward Lowe Foundation as second-stage businesses. Interise is helping to build this network, by licensing our award-winning program, the StreetWise ‘MBA,’ to partners in 76 cities across the country.

Using a three-prong strategy of capacity building, collaboration and convening, intermediary organizations are positioned to catalyze greater economic equity and inclusion, as well as proven sustainable business growth.

Capacity Building

Capacity building is not a one-time effort to improve short-term effectiveness, but a continuous improvement strategy toward the creation of a sustainable and effective organization. For businesses at the second stage of growth in the business life cycle, effective capacity building requires a dual focus on the evolution of the business and the business owner because of the interconnectedness of system and process changes and the owner’s management and leadership behaviors.

Most of us with a college education probably think that business schools can do this.  While business courses can teach a student what to do, they can’t teach them the know-how of managing people objectively, sensing and thinking strategically, building and winning the loyalty of a diverse workforce, and engendering trust with customers and investors. These are competencies learned on the job, and best learned on the job in a cohort with other business owners.

To successfully navigate increasing organizational complexity a business owner needs new business knowledge, acquisition of the management know-how appropriate to this stage of business development, access to broader but more targeted markets, and integration into a network of relationships with trusted peers, advisors and members in three key domains of the ecosystem – capital, procurement, and workforce.


The owner must move from isolation to integration. This is especially true where there is a legacy of inequity and exclusion from the second-stage small business ecosystem.  For capacity building to be an on-ramp for continued growth, it needs to be delivered with the intent of building bridging social capital and engendering trust between the SBOs in the capacity building cohort and between and within the actors of the different domains of the ecosystem.

Intermediary institutions acting as connectors and trusted brokers have the possibility of identifying and surfacing the underlying dynamics and systems misalignments that underlie and feed distrust.  At Interise we have an action research initiative, Leadership in Local and Equitable Anchor Procurement (LLEAP). LLEAP has convened university procurement professionals, minority and local SBOs, bankers and other lenders to learn together how to realign a local procurement system to achieve its historic goals of best product at best price, while achieving the additional goal of equitable economic development. Together we are indentifying leverage points in the system through which we can increase both the number and size of contracts being awarded to local, minority-owned businesses.


From data Interise has collected on our business owners over an extended period of time, we have learned the importance of an eco-system approach to increasing opportunity, equity and inclusion.  Our ten-year impact report, Building Inclusive and Equitable Local Economies, found that job growth rates were large and persistent over time, and higher for Latino- and black-owned businesses relative to alumni segments. Latino-owned businesses experienced higher revenue growth rates, on average, than the network of alumni as a whole.

We are currently working with other members of the Aspen Institute Latino Business Growth Forum to develop and launch another action learning initiative. US cities are the policy learning labs of the 21st century; mayors learn from and rapidly deploy each other’s innovations. Our plan is to assemble a cohort of mayors with the aim that they might harness their ability to champion Latino business growth by convening the ecosystem actors in their cities that are needed to catalyze and broaden opportunity.  We plan to document and distribute the findings to other cities through national networks like the US Conference of Mayors and the National League of Cities.

Community Development
Expanding Latino Potential Through Community Colleges
August 28, 2018 • Juan Salgado