Immigrant Entrepreneurs are the Backbone of LA’s Economy

Sara Sanfir helps a customer at her lingerie store in Studio City.

Between a nail salon and a lively dress shop on Ventura Boulevard sits Sara’s Lingerie, an upscale lingerie boutique where Sara Sanfir- or Momma Sara, as she prefers to be called- extends her knowledge of European custom bra fitting to residents of Studio City.

Momma Sara opened her first lingerie store in California in 1987 after immigrating to the United States from Russia, for the well being of her daughter Rebecca, who now runs the store alongside her.

“[Opening a business] was extremely difficult, but I had no other choice,” said Sanfir.

Although she knew Russian, Hebrew and basic French, her knowledge of English when she first opened the store was non-existent. Now, 28 years later, Momma Sara speaks to customers in fluent English, which she says she learned just by working with Americans every day.

Sara Sanfir is a member of an exponentially expanding group of immigrant entrepreneurs in Los Angeles who make a large impact on local economies. According to a report published by the Fiscal Policy Institute, 44 percent of business owners in Los Angeles are immigrants, second only to Miami. And in 2010, foreign-born business owners generated a total net business income of $34.3 billion, or 28.1 percent of all net business income in California, the Immigration Policy Center reported.

But the immigrant entrepreneurs’ impact on the economy extends beyond their own shops. Foreign-born entrepreneurs are often the reason for the revitalization of a neighborhood that would otherwise slump, says Paul McDaniel, the Immigrant Entrepreneur and Innovation Fellow at the Immigration Policy Center.

“Over time, you see that more and more people begin to move back [to where immigrants open businesses] and that builds upon itself and contributes to that neighborhood becoming revitalized,” McDaniel said. “As more and more immigrants and other people move back to those neighborhoods and more businesses start up, you’ll see that neighborhood becoming vibrant again. These areas of the city may have just become blighted or had much more vacancies otherwise.”

In Los Angeles, Immigrants own 64 percent of “Main Street” businesses, or “shops and services that are the backbone of neighborhoods around the country” like gas stations and dry cleaners. When immigrants open up these Main Street businesses, neighborhoods begin to become revitalized and more and more people begin to move back there, McDaniel says.

A main reason so many immigrants open businesses like gas stations, dry cleaners and grocery stores is because of the cultural and language barriers they face in the United States. Many immigrants who held high positions in their home country often come to the United States and are forced to start from scratch, says David Dyssegaard Kallick, senior fellow of the Fiscal Policy Institute (FPI) and director of FPI’s Immigration Research Initiative.

“People may have an advanced degree but may not have great English skills, and many wind up running a grocery shop instead of being an engineer or something of that kind,” Kallick said. “That’s a story that we hear commonly.”

Suddenly forced to interact with customers and adapt to a new environment, many immigrants find themselves quickly picking up skills that once hindered them.

Sedigheh Khoddami, owner of Asal Design in Studio City, opened her store in August 2010 and had “language problems,” but now she speaks with ease and customers know her well.

“I never had time to go to college and learn English,” said Khoddami. “Talking to people, that helps me a lot. Also listening to the radio and watching TV [helps].”

Without immigrants taking risks and opening so many businesses, many would even be out of jobs. Immigrant businesses in the United States employ 4.7 million workers, 14 percent of all small business workers.

Perhaps the reason for so many more immigrants diving into the world of entrepreneurship is their risk-taking attitude, says Dyssegaard Kallick.

“Immigrants are self-selecting entrepreneurs. They’ve taken the risk of coming to the United States and starting afresh and that in itself is in some ways a sign of entrepreneurial spirit.”