Financial Strategies for the Survival of Immigrant Latinx-Owned Small Businesses

Abstract

Latinx small business owners have the lowest rates of financial access when starting and growing their businesses in the United States, hindering national economic resilience and growth. Grounded in the pecking order theory, the purpose of this qualitative multiple case study was to explore financial strategies that six Latinx small business owners in Houston, Texas, used to grow and sustain their small businesses. Data were collected using semistructured interviews and reviewing public and participant-supplied documents such as their business plan, financial statements, and budget forecast reports. Five themes emerged from thematic data analysis: (a) filling a market gap and leveraging internal financing, (b) team development for increased profitability and business growth, (c) low debt-to-income ratio for business sustainability, (d) building financial and social networks, and (e) raising equity for business sustainability. A key recommendation for Latinx business leaders is to prioritize financing through internal sources, such as reinvested profits or personal savings, before seeking external funding options, like bank loans or equity financing, to minimize financial risk and maintain ownership control. The implications for positive social change include the potential for Latinx-owned small business leaders to create significant economic empowerment, job creation, wealth accumulation, and ecosystem development that encompasses and fosters a sustainable and equitable society in the United States

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