California Latinas were behind a surge in small businesses during the pandemic. Here's why

Mathew Miranda, The Sacramento Bee on Dec 15, 2024

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Life seemed grim for Liliana Bernal in March 2020 as the pandemic spread across the country. One month earlier, Bernal had founded her small business Balanced Diversity — a Sacramento-based recruiting and workforce consulting company.

“The first couple of months were a struggle,” Bernal said.

But while waves of small businesses nationwide were devastated by the pandemic and its restrictions, Bernal’s company soon thrived.

By the end of the year, she had profited just under $1 million in revenue. That number jumped to more than $3 million in 2021. Last year, Bernal’s business was recognized as the third fastest-growing company in Sacramento.

“We very quickly adapted to what was needed at that time,” Bernal said.

Her company is part of a surge in microbusinesses founded by Californian Latinas during the first year of the pandemic, according to a new study from the UCLA Latino Policy and Politics Institute. These startups — defined as companies with fewer than 10 employees — came as Latinas were forced out of the workforce, yet remained responsible for supporting their households.

“The data is finally catching up to capturing the lived experiences of the women in our community,” said study co-author and research analyst Rosario Majano.

The UCLA study found that Latino-owned microbusinesses as a whole outpaced the growth rates of microbusinesses owned by other racial and ethnic groups. Nearly all the other groups experienced a decline or minimal growth.

Most of the increase in microbusiness among the Latino community was driven by Latinas. Majano said this is likely a result of many Latinas losing their jobs in the first few months of the pandemic.

One in five Latina workers were unemployed in April 2020, according to the Economic Policy Institute.

“They turned to entrepreneurship as a solution,” Majano said.

Industries that particularly saw growth included food services, transportation and construction. The study also looked at the increase per region, with areas in the Central Valley and Southern California benefiting.

Majano said the findings highlight the importance of supporting Latinos in entrepreneurship as these businesses are not only benefiting themselves, but the economy. She said that one microbusiness opening leads to an average of seven new jobs in their county.

“How do we support them?” Majano said. “How do we make sure that we sustain them, as opposed to this just being a blip or a reaction to economic crisis.”

Data on the sustainability of these microbusinesses is still needed, Majano added. The study is based on U.S Census Bureau small business data, which only released its 2020 findings earlier this year.

“It’s going to take a couple years to be able to see if the growth of Latinas or just the general presence of Latinas in this micro entrepreneurial space is sustaining,” she said.

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