Immigrant Entrepreneurs: Choose Your Markets Wisely

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Immigrant Entrepreneur Success
Immigrant Entrepreneurs

Immigrants are more likely to become small business owners than others. There are several explanations as to why. One theory is that immigrants have a hard time integrating into the networks that lead to good jobs, and resort to small businesses as an alternative to low wage employment. A more positive view is that immigrant bring with them business ideas that are new to an area, making them more unique and valuable.

However, too often, immigrant entrepreneurs relocate to cities where they have family and friends, rather than those that really need their expertise. In these cities, which are often hubs for one ethnic group or several, the uniqueness aspect discussed above is compromised. Think of the China Town with 20 each of the same 10 business types: food, massage, tea, trinkets, etc… This situation may lead to some tourism, and if the local immigrant population likes to consume mainly products their are used to from their home country, then maybe it is sustainable.

More often than not, however, concentrations of similar business types lead to steep price competition. Price discounting and coupon schemes become commonplace, and average profits are impaired for all the small businesses involved. Instead of falling into this trap, immigrant entrepreneurs might consider lesser known cities, with fewer of their ethnic immigrant brothers and sisters.

However, figuring this out takes time and research. That’s where LaunchScore comes in. We suggest the best cities for a particular business type. Thus, for instance, we can tell you that Rockford, Joliet, and Aurora are good cities in Illinois for a new Vietnamese restaurant, while Chicago, Peoria, and Springfield are poor choices.

See Illinois results for Vietnamese Restaurants here

 

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André is a Professor of Entrepreneurship at Michigan Tech. At LaunchScore, he is responsible for driving the mission, vision, and goals of the company. He is interested in how firms and entrepreneurs create value through innovation. He has published articles on innovation and entrepreneurship in leading management journals including: Journal of Management, Long Range Planning, Journal of Business Research, and Journal of Engineering Management.