June is Immigrant Heritage Month, and it is a good time to think about the role those coming from another country have in operating businesses throughout the United States.
When we think of immigrants, business ownership may not initially come to mind. However, the reality is that immigrants are a driving force behind many forms of entrepreneurship in the country. According to the National Bureau of Economic Research, immigrant workers create about a quarter of all new businesses in the United States.
There are many reasons why this makes a great deal of sense. In order to achieve the American Dream of independence and owning a home, many immigrants earn their money by owning a business. They tend to embrace this opportunity and view business ownership as a way to support their families and achieve their goals in their new country. The reality is that business ownership is often the best path to a successful career for many immigrants.
For those born, raised and educated in the United States, there is a pretty straightforward road involving a college degree and employment at a corporation. That option is simply not there for many immigrants. Even for those immigrants who have a considerable amount of education or have earned degrees in their home country, it may not translate to a successful career here in the U.S.
Given those obstacles, what are the best options for smart, hard-working and driven people who come to America to pursue a better life? For many, it is business ownership. This gives them control over their career without having to depend on an employer.
While many immigrants open independent businesses, franchise ownership can be a great fit for entrepreneurs who are new to the country. People moving to the United States already experience enough major life and cultural changes. Many immigrants know they need assistance and support in operating a business, and they look to the franchisor to be able to help them with that. Obviously, a business owner will need to speak English to effectively communicate with the franchisor and their customers. Also, their training courses, operations manuals and marketing materials will all be in English. As long as they have a good grasp of the language, being able to follow a franchise system will help them in the cultural transition in operating a business in a new country.
While business ownership can be a good fit for immigrants, it doesn’t come without its challenges. Certainly, learning the language and being able to communicate with others is extremely important. Some people may have limited or no business ownership experience in their native country. As a franchise coach, I have seen that this is part of the reason why they turn to franchising for guidance and support.
In some cases, securing enough money to purchase a business can be difficult for those who have moved to a new country. Even if they come to the United States with money, they lack an established financial track record in our system. People can have great financial credit in their home country but none of that counts when it comes to the United States. They have no credit record in this country, and it can take time to build that credit up to the point where banks are willing to take a risk on them.
In order to help finance their new business in the United States, many immigrants will turn to people in their native land – friends, family, network connections, etc. People are often looking for ways to invest their money and diversify their assets outside of their home country. That is a very common way for people coming to the U.S. finance their business while building up credit over time.
Much like moving to a new country and establishing a new life there, starting a business comes with many risks and challenges. But for many immigrants coming to the United States, owning their own business is the most predictable and reliable way to acheive the American Dream.