Risky Business for Immigrants

As a 16-year-old boy, Arman Tasci left Turkey for the San Fernando Valley three years before the rest of his family to scout the land, learn the language and help ease the transition to America.

With money saved from a small apparel-manufacturing business back home, the family quickly grabbed a space at a modest collection of shops in a cluttered Valley neighborhood and began its journey toward the American dream.

But earlier this month, flames ripping through the Reseda Indoor Swap Meet destroyed the family’s efforts as well as the hard-won accomplishments of a dozen other families who operated small businesses there. Hundreds of thousands of dollars in goods and savings were lost among the tenants, none of whom had fire insurance.

“We came here for a better life,” Tasci, today a man of 31, said recently at his family’s rented home. “My father is 64. He has worked all his life. Now he has nothing.”

It’s a scenario repeated possibly thousands of times around the Valley and the rest of Southern California: The small family shop, often owned by immigrants. The thin profit margin. And the attempt to make things better by cutting corners on such things as insurance.

Largely disenfranchised from the mainstream, these merchants often endure unnecessary financial hardship and crime because they mistrust police and organized community groups that could help them.

Yet such ventures have grown steadily since the 1980s, surviving in simple business environments and serving mostly ethnic enclaves.

“You are seeing more of them every year,” said Roberto Barragan, vice president of lending for the Los Angeles Business Development Corp.

Barragan estimates that of the 10,000 small-business loans his organization has helped distribute in the last five years, about 15% were given to business people who have been in the country less than a decade.

But he and others suspect that figure is just the tip of the iceberg, because immigrant entrepreneurs tend to surface when they want to expand already established businesses and find they need help negotiating the loan application process.

“The problem is finding out how many there are,” said Nitin Bhatt, of USC’s Business Expansion Network, a community economic development project.

According to a 1996 U.S. Department of Commerce study, the Los Angeles and Long Beach areas have the highest density of small immigrant-owned businesses in the country, with formation rates increasing, Bhatt said. Wealth comes slowly, if at all: The latest U.S. Census figures show that 52% of the 109,000 firms in those areas have annual sales less than $10,000.

Setbacks are common.

Manuel and Concepcion Vasquez, for instance, lost their $60,000 investment when Connie’s Krafts shop was destroyed in the Reseda fire, whose cause could not be determined.

Twenty years ago Manuel worked as a waiter in the tourist-filled restaurants of Acapulco, Mexico. His wife had studied art. They decided to head for the United States.

They settled in Sun Valley. Manuel worked as a gardener and Concepcion as a housekeeper. Over 15 years they managed to save $30,000. They raised three children: two daughters, now 20 and 12, and a 10-year-old son.

Two years ago they opened the small shop at the indoor swap meet, a location convenient to their mostly Latino clientele. There, Concepcion sold decorations for weddings and quinceaneras that she created herself.

“It was my illusion,” Concepcion said wistfully about her ruined store.

The husband and wife, both 40, recently bought a modest house, counting on the success of their business to cover their mortgage.

“I’ll work harder,” vowed Manuel, who still works as a gardener.

Every emigre arrives with varying degrees of business experience and skills. Many land with savings and education but, like the Vasquezes, the majority of small merchants have struggled to open their modest shops.

And sometimes even those who had advanced degrees and stable jobs in their native countries--such as Vietnamese refugees who once served as government workers--find it hard to adjust to self-employment, Bhatt said.

Still, a family-owned business often becomes the best source of income for someone who doesn’t speak English and lacks other job skills. Businesses are frequently started with savings from odd jobs and contributions from family and friends.

But such businesses are destined to remain on the fringes of the American economy. Government loans are frequently all the aid available to small shops, because banks consider them risky and unprofitable.

“There is no upward movement,” Bhatt said. “When you cater to your own people, you don’t have access to larger markets.”

The merchants also face difficulties in their daily business routine.

According to police, they often fall victim to crimes such as extortion perpetuated by gang members because the merchants are afraid to call the police. Some are undocumented.

“They are afraid to come to us because of the relationship with the police departments in their countries,” said Los Angeles Police Officer Angel Munoz, who specializes in community policing in the Van Nuys Division.

In recent years, police stations throughout the city have developed programs to try to ease merchants’ fears of the law.

Munoz said his station recently established five “business watches” in Panorama City, Van Nuys and Sherman Oaks, designed to organize shop owners and help them detect and, more important, report crime.

Several business groups also have begun trying to organize immigrant shopkeepers.

“Sometimes it’s difficult because of cultural reasons,” said Richard Hardman of the Northridge Chamber of Commerce. But he said many small merchants have become active with the chamber through its recent efforts to establish a business improvement district on Reseda Boulevard.

“They are very hard workers,” Hardman said.

It will require hard work, indeed, for the Reseda fire victims to get back on their feet.

Krikor Haddajian, 28, lost his family’s watch repair business, which traces back to Lebanon and five generations of repairmen. He plans to marry in eight months and had hoped to buy a house.

“I was hoping not to touch my savings, but if I have to, I will,” he said.

Evelyn Mardones, whose Three Bears Gift Shop also burned, has left her Northridge apartment because she could not pay the $800 monthly rent.

Mardones, 36, came from El Salvador nine years ago with her mother. Two years ago she withdrew the $9,000 she had saved in a retirement account and started the toy store.

Now, because of the fire, she, her husband, her mother and her three children have moved into her mother-in-law’s house in Oxnard to save money for the next shop.

“I would like to start another business,” she said. But “right now I have to get another job.”