Asian Americans: New Faces of Entrepreneurship
Asian Americans are avid entrepreneurs. According to the U.S. Census Bureau’s most recent report Survey of Business Owners, there are currently 1.9 million businesses owned by Asian Americans. Between 2007 and 2012, the number of Asian-owned businesses grew by 23.8%. In contrast, the total number of all U.S. firms increased only by 2%, from 27.1 million to 27.6 million.
What’s more, Asian-owned small businesses are inherently successful, earning the highest sales receipt of any ethnic group, with combined sales of $708 billion and average sales of $359,000 per business. Such outstanding growth rate and business success has led to the creation of different small-business related services and tools.
Digging Deeper into the Growth
The Asian-American entrepreneurial regional landscape is highly concentrated, with 52% of the businesses located in California (32%), New York (12%) and Texas (8%).
In all U.S. regions, the same five industries – professional, scientific & technical; retail trade; healthcare & social assistance; accommodations & food services; and other services – make up the largest percentage of Asian-owned businesses.
Currently in the U.S., about 3.6 million people are employees at Asian-owned businesses. The majority are small business: 90% of them are employed at companies with fewer than 500 employees, and 75% at companies with fewer than 100 employees.
Asian American Women: High Levels of Entrepreneurship & Job Creation
As much as 39% of all Asian American women identify themselves as entrepreneurs, owning the majority of Asian-owned businesses. In fact, more than half (53%) of all minority women-owned companies are Asian-owned!
Over 50% of all minority women-owned firms are Asian-owned
The Obstacles
Despite the impressive growth rate and success, Asian Americans face similar challenges and obstacles to other small business owners, e.g. trade policies and economic uncertainty. However, some of the experiences are unique to Asian Americans:
Language barriers: While about 68% of the Asian Americans speak English, 75% of them prefer to speak their native language. With such a language preference, they have to overcome challenges while trying to navigate complex systems to grow their business, such as marketing know-how, government regulations, taxation, insurance, healthcare and any legal issues.
High-quality worker shortages: About 77% of Asian-American small-business owners say they are struggling to attract quality employees. Such talent shortage has caused the owners to spend more on job training, increase wages, curb company growth expectations and lower job qualifications. Most of them believe this eventually will hurt the long-term future of their companies.
Access to funding and capital: Asian immigrants who are foreign-born and new to country simply do not have the required credit history to obtain credit lines or startup loans. Most of them end up using personal saving to start their businesses. Small-business banking professionals can be the knowledgeable resource and trusted advisor by helping them to improve cash flow and build up the company.
Takeaway
An entrepreneurial newcomer mindset – exemplified by an ethic of self-reliance, innovation and resilience – is evident among Asian-Americans. They represent opportunities for business service providers. Knowing these challenges, business service providers and marketers should take time to understand their unique needs and cultural sensibilities in order to building relationships with them.