Reports agree that Miami is a potential for Latino entrepreneurs in the U.S. and that will open up great business opportunities in the years to come. Miami intends to take advantage of the opportunity and become a hotbed of Latin American startups.
In recent years, as support for entrepreneurship has taken shape in Latin American countries, the confidence of entrepreneurs has also grown. In cities such as Santiago de Chile, Sao Paulo in Brazil, Montevideo in Uruguay and Buenos Aires in Argentina, among others, a greater number of projects advance to become startups.
But Latino entrepreneurs are trying their luck beyond the Latin American region as well. In Miami, South Florida in the US, the number of Latino businesses has grown and become visibly sophisticated in recent decades. According to Susana Álvarez, director of Entrepreneurship Programs at the University of Miami (UM) Business School, entrepreneurs have come to invest in Miami “depending on the economic and political situation in different countries, one can appreciate waves of Venezuelans, Colombians, Mexicans, according to their local contexts.”
So what can Latino entrepreneurs who decide to take a further north look forward to finding? What opportunities can be there to take advantage of and what barriers will they have to overcome?
Towards a cosmopolitan Miami
Long gone are the times when Miami was for Jewish and Cuban-American pensioners nostalgic and economically synonymous only with tourism. Today Miami is a vibrant city. In its approximately 143 km2 individuals of varied nationalities, cultures converge, who arrive attracted by the stability of the climate, the development of infrastructures, the service sector, and the strategic geographical position.
Susana Álvarez notes an interesting evolution in the population flow that arrives and leaves the city. “A lot of these people live in two places. Many Latinos are arriving who travel continuously, dividing their time between Miami and their countries. In the past the most common was the Latino who moved here to stay. That’s already changing.”
According to FDI Intelligence reports, Miami ranks tenth in the ranking of the 10 cities of the future in the Americas, remaining among the top five in terms of attractiveness for foreign direct investment. Precisely foreign buyers, some of them from Latin America, are the main cause of the reactivation of the real estate sector. According to data published in Businessweek, foreign investment exceeds US $ 50 billion in more than 250 thousand properties since 2009.
In addition to the vitality that the business scene in Miami has gained, the local government has implemented a number of actions and measures aimed at attracting Latino entrepreneurs and startups, particularly those with technology. In the academic sector, initiatives have also been generated aimed at supporting the launch and development of entrepreneurship. Among the main ones are the Pino Global Entrepreneurship Center of Florida International University (FIU) and the UM Entrepreneurship Programs directed by Álvarez.
But more importantly, Miami is rich in human resources. Highly educated bilingual staff is relatively easy to find. Álvarez explains how the continuous arrival of immigrants over the years has given rise to a pole where “different generations of Latin Americans who understand how to do business in Latin America and know the American process, increasingly businesses are started by people who have also been educated here. There is availability of specialized services as it does not appear in other states, for example expert lawyers even at the country level, who can even foresee what difficulties a Brazilian or a Colombian who wants to enter to invest in the US could have. UU”.
At the same time, Álvarez observes that among young people there is an interest in “looking for ways, through technology, to assist the startup community in general. Young people are very involved in looking for new opportunities, technologies, applications and solutions.”
This is key for startups to overcome the first state and manage to move on to the next phase. Access is needed to services that help reduce the risk of the company and help it acquire value, including law firms, accountants, universities and headhunters.
Nicolás Cortés is one of the entrepreneurs who demonstrates this mixed mastery of the scenarios on both sides of the Rio Grande. Born and educated in Colombia, he came to the U.S. to pursue college and went on to graduate with an MBA from Harvard Business School. Today he is a serial entrepreneur, after founding and scaling a restaurant chain in Miami, he is now founder and president of NCK Energy LLC. From his point of view, “Miami has many opportunities for business, both local and international, and it makes it very interesting the fact that it is very well located to be a kind of trade capital for Latin America.”
Cortés points to the opportunities that can be found by those “with the intention of coming to open new businesses in Miami, the culture is diverse, the Latino component is large and that makes there is an open market for Latin concepts and brands that can be brought, only that it is necessary to pay attention and pay attention to some cultural variations. For example, certain words that are common in some countries are considered offensive in others. The fundamental thing is to know and understand well the niche to which one is directed”.
Logistics, procedures, benefits and barriers
In fact, the Port of Miami is the main point of origin for cruise lines with a flow of more than 4 million passengers in 2013, while it is one of the busiest on the East Coast in terms of commercial cargo volumes. The works on the road network are incessant, with the aim of making the increasing traffic viable, in addition to connecting the peripheries and the neighboring counties that have also grown. As for air transport, the city is connected to all Latin American capitals and many of its most important cities. Thus, “it is much easier to fly from Miami to all the cities in Latin America than between several of them. It’s more practical in terms of transportation,” says Cortés.
For his part, Carlos Triviño, president and CEO of Mobility Global, a provider of technology solutions for small and medium-sized businesses, represents a different generation of Latinos who have started in Miami. Educated entirely in Colombia, after 18 years of working in a multinational company he decided to come to Miami to start his own company. Triviño draws attention to another crucial point that impacts entrepreneurship such as bureaucratic processes. “Everything you need to open a business, register it, have insurance, process taxes, verify that the chosen name does not already have another business, deal with customs processes, in the U.S. is comparatively easy, but as long as you have previous experience and know how things work and who is in charge of what.”
Another vital element for a startup to scale is access to investment capital. At this point both entrepreneurs agree that there are options, but the most complicated may be the first insertion in the right groups. Cortés says that investors already show interest in the city which they see as a place with potential, “here with merit the doors open, but you do need to know where to look.”
In a similar way, Triviño expresses: “there is access to capital, although when one represents a new company banks tend to charge more than normal, but there is also the possibility that they help financially leverage new business units, there are even opportunities to obtain financing from US entities for businesses that operate directly in Latin American countries. ”
Triviño emphasizes the opportunities for financial support offered by the U.S. government, “by law a percentage of investment by the government must be allocated to new companies, and it is an option that can be taken advantage of by Latino entrepreneurs. There are also instances and mechanisms that suggest ideas, appropriate directions for the business.”
To all this, Álvarez adds the climate factor, which is stable and stays warm all year round, and allows you to work without changing the performance much.
Of course, there are risks and barriers. Álvarez points out first “the issue of visas, in addition there are a number of procedures and legal issues that can complicate things a lot if the person does not follow them.” Cortés adds that “everything legal must be very well structured. Although Miami is not particularly bureaucratic in general, you have to be careful to invest in doing things right. Expenses are required that many times entrepreneurs have not anticipated, with the idea that legal expenses will be minimal, but they will stumble upon a series of contracts, insurance, permits that they must have and are usually more expensive than one had planned. That is why it is important to investigate, advise and seek the most up-to-date information.”
On the other hand, Triviño says that, although at the beginning of the company you can encounter resentments from customers and suppliers who distrust the company’s ability to overcome the stages and stay in service, the way to counteract this is “complying with the agreements, which reassures the client. Another strategy is to establish relationships with globally known companies that somehow reflect something positive about our services, or products. That becomes a strength, you have to take care of your reputation.”
Álvarez’s impression is that in recent years the city is maturing as a pole of attraction for startups and entrepreneurs. Although the city still does not reach the levels of specialization and pro-entrepreneurial culture that are breathed in San Francisco or London, Miami is on a solid path towards becoming an attractive pole for Latino entrepreneurs.
