Reports show women and minority-owned businesses are face an ongoing disparity of funding awarded to them and to their male, non-minority counterparts. As a minority-business owner and Grand Rapids transplant, Supermercado Mexico's Javier Olvera discusses the challenges of growth, and finding finance options.
Previous “Making it in Grand Rapids” articles have discussed small business financing options, including traditional and micro-lending
, participation in pitch competitions
and alternative financing
. It is clear that the need for funding does not appear to be going away anytime soon. One aspect that does still need to be addressed is the ongoing disparity between funding provided to women-owned and minority-owned business owners and their male, non-minority counterparts.
According to a recent report by the National Women’s Business Council
, “[c]ompared to men, women business owners raise smaller amounts of capital to finance their firms and are more reliant on personal, rather than external, sources of financing. [Additionally, initial] disparities in the levels of startup capital in women-owned businesses as compared with men-owned businesses do not disappear in the years following startup.”
The data is not more positive for minority-owned business owners. According to the Minority Business Development Agency
(MBDA), despite the fact that minority-owned businesses are growing at a faster pace and creating higher paying jobs than their non-minority counterparts, these businesses are seeing significant disparities in access to capital. The MBDA report found minority-owned businesses are: denied for loans at a rate three times higher than non-minority-owned businesses, likely to receive lower amounts of funding and, when received, end up paying an average rate of 7.8 percent versus the 6.4 percent being paid by non-minority business owners.
Born in California, Javier Olvera spent most of his early years in Guadalajara, Mexico before moving to Grand Rapids. Olvera is now President and Owner of Supermercado Mexico
, which currently has three locations throughout Grand Rapids. He is in the midst of launching a new business venture. Olvera shares his story, acknowledges organizations that have contributed to his success to date and how his resilience has allowed him to get to where he is today.
: What made you decide to go into business for yourself?
: For me, it [meant] no limits on how much I could grow. I did this when the economy was shifting. I noticed there was a big opportunity for me to do something that relates to me, the Hispanic culture, [and] Mexican food. It was safer for me to invest my money in something we all acquire three times a day. It was safe, so I felt comfortable going into the supermarket business.
RG: Tell us about your personal background.
JO: I am a mechanical engineer. I went to GRCC and Ferris State University. Then I went to work for Steelcase for nine years. I learned so much. I really enjoyed working [there].
RG: How do you identify yourself?
JO: That’s a good question! I was born in California. When I was four years old, my parents moved back to their hometown, Guadalajara, Mexico. We stayed there for 12 years and then came to Grand Rapids. My parents are Mexican so I consider myself Mexican-American. It’s a good mix. I’ve been living in the United States for most of my life.
I consider myself a minority. When I was in Guadalajara, I was Mexican and I considered myself a Mexican. When I came to the United States, I didn’t feel like I belonged. Everyone was different. The culture was different. There was a lot for me to learn. Now I finally feel like Grand Rapids is my home. I belong here and I have a lot of opportunities here in Grand Rapids.
RG: What did the transition from the corporate world into business ownership look like for you?
JO: For me, it was more about the opportunity I had when the economic started shifting. I said, ‘I have to do something different here.’ I could grow as much as [I wanted so there] was no limit. And, my business has been growing at a rate of 24 percent every year on average, so it is very good. Right now, we are focusing on process and procedure and making it more efficient so we can multiply a lot faster.
RG: How long did it take you from having the idea to opening the doors?
JO: It took me about two years. For one year we analyzed the market. It took me about a year to get a loan and open. We tried different banks but at that time it was not easy to get a loan. United Bank
believed in us and I really thank them for what they did for us. We have been with them for 11 years.
RG: And your business focus is expanding. What are your plans?
JO: We plan to [create] a Hispanic plaza, similar to the Downtown Market, Hispanic-style. It will have Hispanic restaurants, a brewing company, a stage, [and] office space. And in the parking lot, we’re going to have a farmers market. [For the farmers market], June 16th is our opening day from 9 a.m. to 1 p.m. It will be at 900 Grandville Ave., between Franklin and Hall.
There is a need for this. The population needs more fresh, local products. We’ve been talking to the community and this is something they need, closer to their homes. We’re basically doing this for free for two years because it’s needed in that area.
RG: Is your business more focused on connecting people within the community or educating people?
Specialty items like vinegar peanuts sell well at Olvera's stores.
JO: Most of our customers are Hispanics [but] I notice that there are more Caucasians coming into our grocery stores. I would say 90 percent are Hispanic or Mexican in heritage. I see more Americans coming to try our food, especially in the restaurant, which is what they are more comfortable with. They also come for the experience and for the culture—to learn what is in our community and to practice their Spanish as well.
RG: What have been the biggest challenges so far?
JO: The biggest challenge for us is that we weren’t really experts on grocery stores but we’ve been learning as we go. We’ve been attending the Hispanic Chamber
, Grand Rapids Chamber, and the SBDC
. They’ve been teaching us how to grow our business.
I have the mentality of an engineer but now I’m applying it to a grocery store. [There’s] a lot of mathematics and solving problems, which is common with engineering. A challenge for me is not knowing how to run [a supermarket] the right way and more [efficiently]. We are working on process and procedures so we can multiply. We don’t want to multiply the mistakes.
RG: How are you addressing or overcoming these challenges?
JO: There are programs out there that have been helping me. The Hispanic Chamber, the Grand Rapids Chamber, the SBDC, GROW, SCORE, The Right Place
—all of them have been helping me. Also, we have another advisor from Mexico, Hugo Zamora, who is helping our team directly.
RG: From a business growth and development standpoint, do you feel being a minority has impacted you at all?
JO: In a way, I feel like it hurt me to be a minority. The way of doing business with other cultures is definitely different. You can see how [many] loans banks give to minorities as compared to the number of minorities there are. There are [fewer] loans given to minorities.
RG: What was your initial funding need for the Plaza?
JO: We needed to get funding so we could start the first phase [of the project]. Things like getting architectural drawings, the environment [screening] done, the construction costs. There’s a lot of startup costs.
I talked to several local and national banks. It was hard to get a loan from local or national banks.
Pastries from the in-house bakery at Supermercado Mexico.
RG: Did any of those financial institutions provide feedback or a counteroffer?
JO: It was basically denials. The way the banks work is generally all or nothing. I understand banks need to protect themselves but it was hard.
What they wanted was more reassurance that what I had [would] work. They wanted me to have a longer period for the tenants. It makes sense, but in a way I feel like ‘I have equity in the building.’ I was happy to back up the loan but it was not enough. So I had to wait longer to prove what I have was working.
RG: And how long had you been in business with Supermercado Mexico at this point?
JO: 11 years doing business with Supermercado Mexico and I also have Mexicana Bakery. We’re knowledgeable. We’re not a new business. So that’s why I don’t understand why it’s so hard to lend.
RG: How did the application process turn out?
JO: It took me about a year and a half. But I got a ‘yes’ from a different lender.
is not really a bank. They work similar to a bank. They give you the loan, have similar requirements to a bank, and their rates are comparable. Their application was simple and fast. I was so excited talking to them. I was really impressed and really happy they were open to lending to business owners so they can reach their goals.
RG: How did you hear about Northern Initiatives?
JO: From Jorge Gonzalez at Start Garden
. I approached them and said, ‘I need help with a loan. I have this idea that I believe is going to be a success but I need help’. He said, ‘don’t worry.’ [He knew] they could help me and do a nice job.
RG: Was there anything that stood out to you about their application process?
JO: It was very simple. Typically, the banks will require a lot of information. [Northern Initiatives] didn’t require as much. It was fast. It was clear what was going to happen. It was an ideal way of doing business.
RG: Looking back, what is one thing you know now you wish you’d known before?
JO: Connect more with professionals. They know what they’re doing. Instead of trying to figure out how [everything] works, connect with more people from other organizations to learn faster. When I acquired my business, we worked so hard. We were there for hours trying to do [everything] ourselves. We were not efficient. Even though we worked hard, at the end [we thought], ‘maybe we should have found another way’. Reach out and learn from others.
RG: What role do you feel minorities play within the entrepreneurial community?
JO: It’s a big role definitely. The minority community, their mind, is into creating businesses. I come from Mexico where there are not enough jobs. You have to create the jobs. The jobs that are available don’t pay us much. You have the tendency to create your own business and figure out how to solve the problem for the community. That’s in our DNA. It was natural [for me]. It’s in our culture because of where we come from.
There are so many opportunities for everyone, not just for us. [People] just have to open their minds and think they can do it. Anyone can do it.
RG: Are there any opportunities you see for change?
JO: The Hispanic community and the minority community is going to grow and it’s going to grow fast. I think other, bigger companies should look at what’s going on and take advantage of the minority businesses. They have to start recognizing we also want to help our community.
As far as the banks, I think they should make their way of doing lending a lot simpler. And they should open their doors for minorities to make it easier for them.
RG: What advice do you have for aspiring entrepreneurs?
JO: They have to think of where they’re going to end up. Think of the reason ‘why’ [you’re] doing it and also how it can help the community. They should be thinking big. Shoot for the stars, if you hit the moon, it’s awesome! You have to be passionate about something.
“Making It In Grand Rapids” is a series about local entrepreneurs and the issues that matter in building a sustainable startup-friendly community. Read more in the series here. Support for this series is provided by Start Garden.
Leandra Nisbet, Owner of Stingray Advisory Group LLC and Co-Owner of Gold Leaf Designs LLC, has over 12 years of experience in leadership, sales & marketing and graphic design. Through these organizations, she assists businesses with creating strategies for growth and sustainability through: strategic planning, marketing concept development/implementation, risk management solutions and financial organization. She is actively involved in the community, sitting on several Boards and committees. Contact Leandra Nisbet by email at firstname.lastname@example.org!
Photos by Adam Bird of Bird + Bird Studio.