The aha moment for Marisol Vazquez-Hernandez came, as in so many entrepreneurial origin stories, at the strangest time: Last December, during a five-day stay in the hospital to receive treatment for COVID-19, she looked out the window of her room and saw the light.
“I saw the sky and a reflection of God telling me we need to leave something behind in this life,” recalled Vazquez-Hernandez, speaking in Spanish. And what was the divine inspiration? To make, jar and sell Mexican salsa, using a cherished recipe of her mother’s.
As Chicagoans try to survive the economic disruption of a yearlong shutdown, these kinds of creative new ventures may be blossoming. Of course, side hustles and microentrepreneurship existed before the pandemic, especially among undocumented immigrants and others who have difficulty finding regular employment. But in the past year local experts say they’ve witnessed a noticeable increase in the number of people selling food or products from their homes.
“It started last summer,” said Kim Close, chief operating officer with the Little Village Community Foundation, an organization that supports local businesses. “People immediately pivoted to try something new or just to supplement their income.” Isaac Reichman, a spokesman for the Department of Business Affairs and Consumer Protection, agrees that the trend is more than just a blip. “Despite the challenges of the last year, many residents are still choosing to begin the entrepreneurship journey in Chicago,” he said.
Experts say that record-high job loss and the collapse of many local small businesses are likely driving newcomers to this kind of self-employment. The number of unemployed people in the Chicago-Naperville-Elgin region peaked in April 2020 at 807,160 (chart), compared to only 174,384 in the same month the previous year, according to the U.S. Bureau of Labor Statistics. And, although firm numbers are hard to come by, widespread bankruptcies and closures are mounting: The Chicago Tribune recently identified 361 neighborhood businesses that closed during the pandemic, which the newspaper acknowledged may only be a fraction of the eventual total.
From dreaming to doing it yourself
Vazquez-Hernandez discovered that the path to self sufficiency can feel like a maze of complexity. After losing her job at a downtown Starbucks due to the pandemic, she and her daughter, Marisol Reyes, 25, began putting together a business plan to start selling not just abuela’s creation, but two other kinds of salsa. One of them is a recipe for a style of salsa from the Mexican state of Veracruz that Reyes hopes to make her own.
The pandemic has also been tough on Reyes, who has been out of work for months. After her permit under the Deferred Action for Childhood Arrivals (DACA) expired, she was forced to live on savings. Reyes, who majored in business administration, said she has wanted to have her own business since childhood. Teaming up with her mother, she thought, presented an opportunity to pursue both of their dreams.
So far, Reyes has secured an Employer Identification Number (EIN) used to identify a legal entity, initiated the licensing process and created a logo and name for the business: Womade Brands. Womade means “made by women” in Spanish. Now, she’s on the hunt for shared kitchen space where she and her mom can make the salsas. “There are organizations like the Hatchery or Kitchen Chicago that offer these types of kitchens, and I already put in a request for information,” she said.
Reyes and her mother have also joined a group of small entrepreneurs who are taking business classes virtually and in Spanish with the Little Village Foundation. The instructor has been teaching participants how to develop a business plan, including cost effectiveness estimates. Some in the class want to launch businesses, others are there to strengthen existing ones. The start-up ideas range from marketing to baking to fashion.
“I got laid off due to the pandemic, and ever since I did start to question a lot of, you know, what am I doing,” said Roxana Delgado, 28, another student.
She hopes to start a boutique for dog lovers called Mama Perrona. Delgado became a dog owner for the first time last year and has been sharing her experiences on TiKToK.
“It is a boutique for dog moms who have so much pride in their culture and the fact that they are a dog mom, which is one of the coolest jobs I’ve experienced so far this year,” she said.
Barriers and hurdles
For Delgado, Reyes and Vazques-Hernandez, the biggest hurdle is raising start-up capital. “I have been struggling quite a bit to try and find access to capital because I am unemployed,” Delgado said. “A lot of the time, a business needs to be well up and running for about two years before they can get any assistance from a bank, a grant or what not.”
The Little Village Community Foundation offers some grant money to participants who complete the programs and classes, but they will need more financial support.
Language can also be a barrier for residents like Vazquez-Hernandez who don’t fully speak English. “I would have launched the salsa a long time ago if I understood the steps I needed to take,” Vazquez-Hernandez said. Additionally, she and her daughter have discovered the laws in Chicago can be difficult for anyone to understand.
For example, some types of homemade foods can only be sold in farmers markets and must be registered with the Chicago Department of Public Health. Other independent food operators, like food vendors, can only prepare their food for sale out of a commercial kitchen.
City officials say they are trying to balance encouraging entrepreneurs while maintaining health and public safety, citing an increase of shared kitchen user licenses in recent years. Today, the city says, there are 643 licensees, compared to 432 in 2019.
Officials point to the pop-up license, established in 2018, which makes it easier for food operators to cook out of a shared kitchen and sell their food out of a storefront — without having to obtain a full retail food establishment license.
Earlier this year, 36th Ward Ald. Gilbert Villegas introduced an ordinance, currently stalled, that makes it easier for people to run businesses out of their homes. But it did not include any relaxation of regulations related to food preparation. Reichman said the city’s business affairs department has “identified a couple of areas that need further evaluation in order to ensure safeguards are in place to protect consumers from fraud and adhere to zoning requirements.”
So far, city data hasn’t shown a significant uptick in business license applications. The number of new applicants for non-wholesale food retail businesses from January through March of this year is down by 15% compared to the same period in 2020.
For now, Vazquez-Hernandez and her daughter are developing their salsas, one batch at a time, in the kitchen of Reyes’ apartment in Pilsen on the Southwest Side. They’re still tinkering with the Veracruz recipe — precisely how hot does the oil need to be before adding the sesame seeds and the garlic? — the results of which they will sell to friends and family, a trusty test market.
She knows they have a long way to go.