Nurturing Small Business at a Historic Crossroads for Hispanic Culture and Commerce: Q+A with Hector M. Treto
Latino/a/x entrepreneurs, many of them owners of small, neighborhood-serving businesses, contribute some $800 billion a year to the U.S. economy. In recognition of Hispanic Heritage Month, we checked in with Hector M. Treto, a businessperson himself and consultant with RAIL CDC in the Phoenix area. RAIL connects local entrepreneurs to Spanish-speaking small business experts who can help hone business plans and offer culturally relevant technical assistance.
The roots of Spanish-speaking people in Phoenix are deep, their history integral to the American story. For centuries, present day Arizona was part of Spanish and Mexico territories; in the early 20th century, people of Mexican heritage joined the migrations that fueled the growth of Arizona’s capital from a small town to a small city. They faced discrimination from Anglo neighbors and powerholders and were segregated into barrios and subject to labor exploitation and redlining, a legacy still felt today.
But to celebrate the heritage of one of America’s fastest-growing ethnic groups is to look to the future, and a key element of that future is the powerful force of Latino/a entrepreneurship. For more than a decade, Hispanics have significantly outpaced other groups in starting new businesses. According to the U.S. Small Business Administration, one in four new businesses is Hispanic-owned; Latino/a entrepreneurs contribute $800 billion annually to the national economy, with more than $100 billion in annual payroll.
As part of LISC’s Project 10X devoting unprecedented resources to racial equity, LISC Phoenix is supporting local Latino/a-owned small businesses through community-based groups like RAIL CDC. In this Q&A, we hear from Hector M. Treto, one of a team of Spanish-speaking RAIL business consultants who provide culturally competent, “high-touch” technical assistance to small businesses in the McDowell Road corridor of central Phoenix.
Tell us a little bit about your background and how you became a business consultant.
I guess you could say I’m a serial entrepreneur at heart. I was born and raised on the border in Nogales, Arizona. I was born in Nogales, Sonora, Mexico, but lived all my life in the States. When I graduated high school, I went up to the University of Arizona and graduated with a degree in architecture, but this was during the housing recession of 2009, so there weren’t a lot of career opportunities in architecture.
I knew I needed to pivot and seek financial stability. I joined the management training program and then worked my way up at Enterprise Rent-a-Car. After seven years I realized that corporate life wasn’t for me. I wanted to control my own time and have freedom to pursue different aspirations. I had a best friend through college, and we would get together on Sundays to have dinner and talk about business ideas and what we were working on. Ultimately we were like, “Well, hey, maybe we should start something together.” And that started my entrepreneurial journey seven years ago. Now we have four different brands and companies.
Between my creative background through the university, my corporate journey through Enterprise, and my entrepreneurial background, that gave me all the experience that led me to becoming a consultant for RAIL.
Why are Hispanic- or Latino-owned businesses important in the McDowell Corridor neighborhoods?
I live in this area, so I know that there are a lot of Latino businesses around the corridor. I see everything from restaurants to tire shops, clothing stores, flower shops, hair salons, and barbershops.
They contribute to the economy significantly. They create jobs, pay taxes, and stimulate economic growth, which is crucial for the revitalization and sustainability of this corridor. The diversity they bring to the business ecosystem makes it more resilient.
And these businesses often act as community hubs, fostering a sense of belonging and identity among local populations. Residents are seeing business owners that they can relate to culturally and that serve as role models for young people in the community. You can walk into a store and speak Spanish or English. There is a sense of trust that comes from that and I think that’s vital for the community.
Do those issues—language, culture, and trust—come into play when you’re advising business owners?
I think it definitely helps when they have women and men who are technical-assistance consultants that look like them, speak like them, that come from a similar background. It helps us find common ground. It also helps that a lot of the consultants have their own businesses, so they understand the journey. We have real life experience and wisdom that we can share with these business owners, and the fact that I am fluent in Spanish solidifies that trust.
What are some of the challenges you’ve seen for businesses trying to grow?
The business owners themselves, they are resilient. They start with an idea and they run with it. They have that tenacity, and that’s what’s amazing about our culture, the entrepreneurial spirit and heart.
They know how to deliver their service or sell their product, but they might not have the education or know-how or legal expertise or technical savvy to take all the steps required to do business here in the United States—things like registering your LLC or opening a business bank account. Organizations like RAIL CDC and the technical assistance we provide are crucial to giving business owners the guidance they need so they don’t have to worry about being fined or shut down, or taken advantage of because of lack of knowledge.
Access to capital is also a huge barrier. If these owners don’t have money to invest in their businesses it impacts their economic stability and makes them vulnerable. It reduces their competitive edge.
The most important thing is coaching Latino/a business owners to think of themselves as owners. They get so caught up in the day-to-day operations, like a restaurant owner who may be busy cooking, that they lose sight of growing their business and establishing procedures and systems to help them be more efficient with their time. I give them an example: If you get sick, if you end up in the hospital, what’s going to happen to your business? Does the income stop coming in? And that is when the switch inside them flips. They understand that they need to come up with a plan.
You’ve talked about the entrepreneurial drive. What motivates that, for the business owners you’ve worked with?
It’s the desire for economic mobility and financial independence, the ability to provide sustained support to their families that can be passed down through generations. For some, starting a business is a way to overcome the barriers and exploitation they’ve faced in the labor market. These business owners also have a desire to make a positive impact on their communities, by creating job opportunities and contributing to economic development. And many want to preserve their cultural heritage by starting a business that reflects their cultural values, traditions, and products.
They get up in the morning for a better life than the previous one they had. It’s about self-actualization, realizing one’s potential. And this is what motivates and inspires me every day—getting to work with them and hear their stories.