Latino entrepreneurs find success in Sonoma County

From his cramped, one-room office in Sebastopol, Hector Velazquez runs his advertising business using Internet streaming technology from the Netherlands, cloud-based servers in South Africa and radio-style voice-overs produced in sound studios in Mexico.

Velazquez, an advertising entrepreneur, produces and sells streaming music to numerous Latino supermarkets, hair salons, insurance agencies and dentists up and down California.

While elevator music pioneer Muzak Holdings also offers in-store audio advertising, Velazquez’s Nexo Advertising employs the often bombastic voices found on Spanish radio to produce a uniquely Latino sound for its lengthening list of clients, who in turn cater to one of the fastest-growing ethnic populations in the United States.

“When people walk into their stores, they want that feeling like people are in Mexico,” said Velazquez, who was born in Mexico but moved to Napa with his family in 1979 when he was only 5 years old.

Though his advertising operation defies the stereotypical Latino businesses - he is neither a landscaper nor a “bodega” market owner, Nexo’s success goes hand in hand with the growth of Latino businesses in Sonoma County and beyond.

There are more than 4,000 Latino- owned firms in Sonoma County, or nearly 8 percent of the county’s 52,458 businesses, according to new data from the county Economic Development Board.

They generated $560.4 million in retail sales in 2007, the most recent data available, or nearly 9 percent of the county’s $6.4 billion in overall sales, said Al Lerma, EDB program manager. And that’s not counting “informal” Latino businesses, like street vendors and others that operate without business permits, Lerma said.

Nationally, the number of Latino businesses is increasing at about 8 percent annually - twice the growth rate for all business. Lerma said he expects countywide business statistics, which will be available later this summer, are likely to show similar trends.

The growth in both the Latino population and Latino businesses is having a broader impact on the general economy and local community. The Latino consumer market is no longer the exclusive domain of Latino business owners, Lerma said.

“I think you’ll see the general business market respond,” he said. “But you’ll see the Latino business community grow to meet those demands as well.”

New county assistance program

Recognizing the impressive growth of local Latino-owned businesses, the county has recently launched a bilingual business assistance program aimed at addressing common obstacles Latino entrepreneurs face. Managed by the county Economic Development Board, the new bilingual business assistance program will include:

- Establishing a bilingual business assistance hot line to help new and existing ventures with startup and expansion questions.

- Conducting business workshops on such topics as exporting, marketing and obtaining investment capital.

- Providing assistance to entrepreneurs who are struggling with city and county regulatory processes, such as business permits and licenses and government inspections.

- Partnering with local lenders to help facilitate access to small business investments such as micro-loans.

The county’s investment in small business development is an investment in jobs, said Supervisor Efren Carrillo, whose 5th District includes southwest Santa Rosa.

Two-thirds of all jobs in the United States are with small businesses, Carrillo noted. With that in mind, he said, it makes good financial sense for the county government and local business groups to support the dramatic growth of Latino-owned ventures.

There are ample opportunities today for Latino entrepreneurs, he said, just as there were for previous waves of immigrants.

“The opportunities that were there for Italian or Irish immigrants are certainly there for a new segment to try,” Carrillo said. “Those opportunities are just as real today.”

The growth of Latino-owned businesses in Sonoma County is fueled by a demographic shift that is changing California. Latinos now comprise 26 percent of the county’s population, up from 11 percent a quarter-century ago. Later this year, the U.S. Census Bureau is expected to declare Latinos the state’s largest ethnic demographic, surpassing non-Latino whites and dwarfing all other minority groups.

For some local business owners, that growth has begun to blur the lines between what is perceived as the traditional Latino market and the broader Anglo market. Just as there was a time when pizza became as American as Italian, Latino food and culture have increasingly become part of the mainstream.

“The goods and services that are being offered by new Hispanic entrepreneurs, they’re not just targeted to the Latino community,” Carrillo said.

At Dulceria Las Tapatias on Sebastopol Road in Roseland, the family-run business is discovering a new customer base that is increasingly Anglo.

The retail store, which offers traditional Mexican candy and snacks and party supplies, opened in October. Owned and operated by Adrian Zepeda and his family, the retail outlet was an offshoot of the family’s 4½-year-old wholesale business, which was run out of a nearby warehouse.

The wholesale business supplied candy and snacks to Latino street vendors and other retail clients. The store is now a destination for local residents looking for an affordable and authentically Latino alternative to area party stores.

Four-foot piñatas of popular movie or comic book characters, made in Los Angeles or Mexico, sell for $25. Zepeda’s daughter, Altair, said white customers sometimes come in wanting a “Mexican theme” party.

“They like the fact that it’s very Mexican. They want to do the same thing that Mexicans are doing at parties,” Zepeda said.

Immigrant success stories

The natural trajectory from employee to business owner often produces well-known immigrant success stories, whether it’s the vineyard worker who launches his or her own winery or restaurant workers who start their own establishments. The legion of Latino restaurant workers at every kind of restaurant imaginable is bound to produce some interesting results.

When Gustavo Martinez first shared his desire to start a sushi restaurant, the idea was met with a good deal of head scratching.

That was four years ago, and Martinez recently had moved to Santa Rosa from Lake Tahoe, where he worked making sushi for 14 years and was trained by a Japanese chef.

Martinez, who came to the United States from Mexico in 1997, said he worked locally for a while and soon realized that he had what it took to compete with local sushi restaurants.

“I came to the conclusion that with what I know about sushi, I could do as good as other sushi restaurants in the area or better,” he said.

Martinez opened Paradise Sushi & Grill in Petaluma three years ago, using savings that he earned from working all those years at Lake Tahoe. Just 10 months ago, Martinez opened his second Paradise Sushi in Rohnert Park, next to the Big 5 Sporting Goods off the Expressway. He credits his quality product and affordable all-you-can-eat lunch and dinner offerings.

The most difficult thing, he said, was getting customers to trust that a Latino staff could make sushi as good as a Japanese restaurant.

“It was hard when we first opened,” he said. “Customers show up and see Latinos behind the sushi bar, it’s hard for them to trust. … I told my staff, every single customer who comes through this door has to be satisfied.”

Moving outside traditional enclaves

Rene Meza, president of the Sonoma County Hispanic Chamber of Commerce, said it’s difficult to keep track of all the new Latino-owned businesses popping up. Many of them, he said, are setting up shop outside traditional Latino business enclaves such as Sebastopol Road.

Meza said the chamber, which has about 150 members, recently had its largest “mixer” at the Graton Resort & Casino outside Rohnert Park, with well over 200 people attending, more than double its usual attendance for such functions.

One of the primary objectives of the chamber is funding academic scholarships for youth, with the goal of encouraging future business owners and entrepreneurs.

“To us the community is not only business owners but younger people who should have opportunities in the business community,” Meza said.

With more than 4,000 Latino businesses currently in Sonoma County, Meza said the Latino chamber has a lot of room to grow. That requires greater outreach, getting out into the community and getting more businesses to become part of the chamber.

“If we don’t make this effort, we’re shooting ourselves in the foot,” he said. “We want to grow our membership well into the thousands.”

Starting out with little support

In most cases, Latino entrepreneurs launch their endeavors with minimal support from local chambers of commerce or formal business financing.

One example is Jorge Alcazar’s Frozen Art gourmet ice cream business, which he launched with money he borrowed from family, friends and friends’ parents.

His family has been making ice cream for several generations in Tocumbo, Michoacan, a mecca for ice cream in Mexico. Alcazar started his own ice cream shop in 2011, but business was slow under the original name of La Real Michoacana, so he changed it to Frozen Art, tapping into the true nature of his product. He now sells the ice cream at his shop and distributes to local vendors. He offers a wide range of ice creams, from traditional flavors to exotic ones like red zinfandel chocolate chip, cucumber and chili, avocado and even tequila.

“If you want to expand your horizons, you have to expand your market as well,” Alcazar said, adding that Anglos make up about 75 percent of his customer base.

Now in his fifth year in business, Frozen Art is finally in the black. Last year, the business made enough money to finally pay off all its debts, and this year he hopes to make enough money to continue to invest in the business.

The most difficult thing about starting a business, he said, was the regulatory hoops and obstacles that nearly drove him crazy. For example, he had to do and redo the tile floor of his production room three times because of conflicting or incomplete information from inspectors. Each time he had to tear out tile it cost him about $1,000 in construction fees.

Marcos Suarez, manager of EDB’s new bilingual assistance program, said he hopes the county’s new Latino business initiative can help alleviate some of those issues and foster the immigrant community’s entrepreneurial spirit.

“A lot of them come to this country wanting to become independent and successful and they look at owning their own business as their ultimate goal or dream,” Suarez said.

Received $50,000 micro-loan

Velazquez, the owner of Nexo Advertising, is among those who recently have benefited from the county’s bilingual business initiative.

With the help of a $50,000 micro-loan from Working Solution, a nonprofit lender that works closely with the county program, Nexo purchased customized Internet audio streaming devices from a Dutch company called Streamit.

Nexo’s bottom line also is bolstered through corporate partnerships with Mexican food and beverage companies including Jarritos, D’Gari, Cidral Mundet and Mineragua.

But like other Latino businesses, Nexo is branching into the broader business market. Velazquez said he recently expanded his roster of English-speaking voices on his audio products, adding “Debra” to a lineup that already includes “Ken” and bilingual “Crystal.”

Velazquez said he regards his expansion beyond the Latino market, as well as his international business dealings, as an example of how Latino business has matured in Sonoma County.

“Stepping into the mainstream is anyone’s dream. First you start off in your comfort zone, which is the language you speak. But when you have a good product, you know you can serve anyone, regardless of the language,” Velazquez said.

You can reach Staff Writer Martin Espinoza at 521-5213 or martin.espinoza@pressdemocrat.com. On Twitter @renofish.