Development Effort Will Aid Little Saigon
Orange County’s Vietnamese American business community, which is centered in the Little Saigon district of Westminster and Garden Grove, has reached a “critical stage” at which it must shed its insular ways and begin a transition into the mainstream economy.
That is the conclusion of a study sponsored by the Vietnamese Community of Orange County Inc. and UC Berkeley. The study found that about 3,000 Vietnamese American businesses sprouted in the area in the last 13 years, and they have survived by serving a tightly-knit group of fellow immigrants and refugees, many of whom are welfare recipients.
But Vietnamese immigration has slowed considerably in recent years, and many of these businesses--ranging from grocers and hair salons to high-tech services--are facing hard times as they compete against each other for the same customers.
What’s more, Vietnamese American business owners often are reluctant to seek bank loans and other financial services because of a cultural stigma against borrowing and the widespread belief that they wouldn’t qualify for credit, the report said.
The Vietnamese Community of Orange County, a nonprofit organization based in Santa Ana, said the findings support its view that Vietnamese American businesses need help developing strategies and skills for the future. With $150,000 from the Merrill Lynch Foundation, the organization is opening a Small Business Development Project in Little Saigon next month.
The project will offer local business owners training and consulting services in planning and financial management as well as access to capital sources. The goal is to help Vietnamese American businesses reach broader markets by attracting new customers to Little Saigon, adapting their products and services, and forging ties to mainstream corporations.
“We are serving the community and we are living with that,” said Mai Cong, chief executive of the Vietnamese Community of Orange County. “But we are not attracting from outside the community.
“In the next millennium, it’s globalization,” she said. “We want to look at what are the barriers, what can we do to make this happen” in the Vietnamese American business community.
Cong said other financial backers of the program will soon be announced.
With a population of 170,000, Orange County’s Vietnamese American community is the largest in the United States, the study said. However, that population is stabilizing and may even decline.
Since 1996, the number of Vietnamese immigrants to the area has slowed to about 1,000 a year, less than a quarter the level of the previous decade. The immigrant population also is aging, while many of its members are moving out of the area or are increasingly patronizing non-Vietnamese businesses. Also, because many of the remaining Vietnamese immigrants rely on public assistance, the recent cutbacks in aid under welfare reform have resulted in reduced demand for products and services from local businesses, the report said.
The study was conducted by Khanh Thu Thi Pham, a graduate student in public policy at UC Berkeley.
Based on interviews with 50 Vietnamese American businesspeople in Little Saigon, the study found that the vast majority of owners financed their businesses through informal means, such as savings and money raised from family and friends. While that is common among entrepreneurs generally, the Vietnamese American businesses rarely “graduate” to institutional financial sources, it said. Only four businesses in the study said they had received bank loans, even though a lack of capital was the most frequently cited factor hindering growth.
Despite the obstacles, Vietnamese Community of Orange County officials said that Vietnamese American businesspeople possess many positive attributes, including a penchant for hard work, honesty and thriftiness. Many have been very successful, they said, but still need help qualifying for loans because they don’t adhere to standard financial practices.
The program’s backers are hopeful that with education and training, these entrepreneurs will overcome lingering cultural barriers and misperceptions that have kept them from seeking loans and broadening their products and services.
Garrett Gin, a Merrill Lynch community development manager, said the Vietnamese American community is “definitely underserved” by financial institutions, and his firm sees “lots of opportunity.”
“The Vietnamese community has created this tremendous thing,” said Paul Garza Jr., director of Rancho Santiago Community College District’s Customized Training Institute, which will provide some of the education and counseling services for the project. “Little Saigon is an economic miracle. I don’t think there’s any doubt they’ll be successful” in adapting to changing business conditions.
Robert Tran, vice president of Little Saigon Supermarket in Westminster and two Vanco Food markets in Garden Grove and Fountain Valley, said change is beginning to occur as the younger generation of Vietnamese Americans embraces new ways of doing business.
“Back in the early ‘90s, it was very focused on being community-oriented or being in your niche market,” he said. “But now the community is opening up. The whole economy is branching out now.”
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Growing Pains
A survey of Little Saigon business owners shows that most started their businesses with personal savings and loans from family and friends. However, many lack the capital to expand:
Source of Funds
Personal savings: 41
Loans from family and friends: 27
Personal credit: 17
Bank loans: 4
*
Factors Hindering Growth
Not enough capital for equipment: 27
Slow sales, lack of customers: 26
Not enough capital for supplies: 21
Business management skills: 12
Lack of information: 10
Source: Vietnamese Community of Orange County Inc.
