Minority Businesses Band Together in O.C.

SANTA ANA —  When it came time to renew his company’s liability and worker’s compensation insurance earlier this month, Aaron Lovejoy decided to try something new.

Instead of simply choosing a broker who offered low rates for his computer services company, Ultratech Resources Inc., he went looking for a minority-owned insurance broker. And he found one: Pena Insurance Agency in Santa Ana.

“We’re a firm believer in utilizing other minority firms for all our products and services,” said Lovejoy, company president, who is black.

A few years back, Lovejoy said, it would have been more difficult for him to link up with a minority-owned supplier. For one thing, there was no formal communication among Orange County’s various ethnic merchant groups, he said.

But things started to change several years ago when four minority entrepreneurs--representing African-American, Latino, Korean- and Vietnamese-American business groups--got together to map out plans to recycle the so-called “minority dollar” within their communities.

That plan gave birth to the Orange County Minority Business Council, a nonprofit group that one founding member calls the “rainbow coalition” for county businesses. The council is composed of the local chapters of the Black Business Alliance, the Korean American Assn., the Hispanic Chamber of Commerce, the Vietnamese Chamber of Commerce and the Chinese-American Chamber of Commerce. The groups combined represent about 13,000 business people.

“This organization has a great potential to unify minority business, which is an increasingly strong part of Orange County’s business community,” said Dr. Co Long Pham, president of the Vietnamese Chamber in Westminster and also of the council.

The power of the minority dollar can be seen in a couple of statistics: Minorities make up 35% of Orange County’s population of 2.4 million, and 31% of the county’s small businesses are owned and operated by minorities.

As the county’s minority population grows, so will its purchasing power. What better time than now, asks Korean-American Chamber President Ho Young Chung, to encourage minority entrepreneurs to do business with each other. The eventual goal, he said, would be to develop markets outside minority communities.

“We’re not going to sit around and let other companies take business away from minorities,” Chung said. “So we recommend a lot of real estate business in Little Saigon to Korean buyers and refer Korean buyers to Vietnamese or Hispanic real estate brokers.”

But efforts by the organization to recycle minority dollars are being slowed by existing ties among some minority business groups. Korean dry cleaners, for example, have formed a trade union to provide financial assistance for members. Latino and Korean grocers have formed their own respective organizations to promote business within each group.

Dissolving such ties could take years, since the cohesiveness of each minority group is often strengthened by a shared language. “For a Vietnamese businessman, it is always easier for him to conduct business in his language than in Spanish,” said Chuoc Vo-Ta, executive director of the Vietnamese Chamber.

This can make it more difficult for African-American merchants to do business with other minority firms, said Muhammad Nassardeen, president of Recycling Black Dollars Inc. in Los Angeles. “The Koreans have done a tremendous job of buying from each other and pooling their funds to buy in bulk to get better pricing. The black community, like the black business community, is fragmented,” he said.

More importantly, blacks make up only 2% of Orange County’s population, and this could limit the market for black entrepreneurs. In contrast, Latinos and Asians make up 33% of the county’s population.

While the council was originally founded to help minority merchants do business with each other, recently it has taken on a new issue: helping to weed out discrimination against minorities in Orange County, said Caleb K. Zia, president of the Chinese-American Chamber in Huntington Beach. The county’s growing minority population has spawned fears among minority merchants of an increase in hate crimes.

So when a 17-year-old Chinese-American and two white friends were attacked by a gang of skinheads last July, the council wrote letters to county supervisors expressing their concerns.

“We do take these things seriously because they are bad for society and business,” Zia said, citing recent incidents in Los Angeles and New York involving conflicts between Korean merchants and residents of black neighborhoods. In one recent incident, blacks in South-Central Los Angeles boycotted a Korean-owned market after a black female teen-ager was killed by the store’s owner in March.

Hispanic Chamber President Alfredo M. Amezcua said the Minority Business Council wants to do its part to prevent similar incidents in Orange County. “Hate crimes, left unchecked, are like a disease that can become a plague,” said Amezcua, a Santa Ana attorney.

Council members say that many minority business owners--sometimes unaware of their rights under U.S. law--tend to keep to themselves and let race-related incidents go unreported. To increase cooperation among young people, the council wants to organize “role-model forums” in which teen-agers can observe how the various ethnic business groups work together. Chung, of the Korean American Assn., believes that the business community has a major role to play in keeping Orange County’s diverse community together.

“I think business people are more reasonable and cool-headed (than young people), and they tend to talk things over and this can defuse a lot of tension,” he said.

In recent years, an increasing number of companies have tried to cross ethnic lines and do business with other minority firms, despite difficulties in communication, council members say. Lucio L. Cabrera, 55, an Anaheim wholesaler, has been selling juices, paper towels and other consumer items to Korean grocers since the late 1980s.

Cabrera, owner of Two Flags Wholesale, said it wasn’t easy expanding his business into Little Saigon and Little Tokyo in Los Angeles. But his efforts are paying off. Asian grocers now make up 40% of his business, which had sales of $3.4 million last year.

“We use plenty of sign language. We write our prices on paper and point to the items that match the pricing,” Cabrera said. “Unless you’re used to it, it can be exhausting.”

Nearby, Jae Hoon Ahn, 53, was one of the first Korean merchants to open a shop in downtown Santa Ana, the business hub of Orange County’s Latino community. His clothing shop, Fiesta Fashion, has signs in Spanish, is staffed by three Spanish-speaking women and designed to appeal to Latino shoppers.

The three-block area on 4th Street between French and Bush streets used to be run exclusively by Latino merchants. But after the creation of the Fiesta Marketplace three years ago, seven Korean retailers moved in.

According to a recent survey by the Korea Times, a Korean-language newspaper, the number of Korean businesses in Santa Ana has nearly doubled in the last two years, from 280 in January, 1989, to 492 in January, 1991. Andrew Ahn, an assistant editor, said most of them relocated from Los Angeles County, fearful of rising crime rates.

Latino shopkeepers in downtown Santa Ana said they have enjoyed good relations with their Korean neighbors and don’t see them as a threat to their own businesses. Raymond Rangel, owner of R&R; Sportswear, which is near several Korean-owned stores, said he seldom chats with the Korean merchants because of the language problem.

“Everyone’s too busy minding their own business, but they’re friendly people,” Rangel said.

In contrast, there are few Latino-owned stores in Garden Grove’s Koreatown or in Little Saigon. Amezcua said the lack of Latino businesses in those areas is mostly due to the perception among most Latino merchants that there are more business opportunities in Santa Ana than in the Garden Grove area.

“It doesn’t mean that the Latinos are not doing business with the Asian community,” he said. “We encourage our members to do business with the Vietnamese, Koreans and other Asian-American communities, and many are doing that.”

Ethnic Businesses in Orange County:

The pool of minority businesses in the county is growing as fast as minority populations. Last year, ethnic minorities made up 35% of the county’s population of 2.4 million, according to 1990 census data. A third of the county’s small businesses are owned and operated by minorities.

Ethnic Breakdown Percentage of population, 1990. Anglo: 65% Latino: 23% Asian: 10% Black: 2%

Small Business Number of small businesses and total value of sales in millions, 1987*:

TOTAL TOTAL BUSINESSES SALES Anglo 57,078 NA Asian & Pacific Islander 15,110 $1,400 Latino 9,683 $650 Black 1,318 $81 Eskimo, Aleut & American Indian 297 $17

* Latest figures, 1987

Sources: U.S. Bureau of Census; research and statistics from the State Board of Equalization