master plan for reservation small business...

C o n f e d e r a t e d T r i b e s o f t h e U m a t i l l a I n d i a n R e s e r v a t i o n

Master Plan for Reservation Small Business Economy

Master Plan for Reservation Small Business EconomyBusiness Service CenterDepartment of Economic and Community Developmentsupported by the Administration for Native Americans

CTUIR73239 Confederated WayPendleton OR 97801www.ctuir.com

cover, clockwise from upper left: Ben Bearchum, Native World Productions; Dale & Judy Jenner, Arrowhead Forestry; Margaret Sams, Cut It Again Sams; Clifford Shippentower, Wolfsong Fisheries and customer.

With the exception of the photo of Margaret Sams, all photo-graphs in this publication by Dallas Dick, Red Elk Images.

© ctuir, Pendleton, Oregon · 2009layout and design by FiveCrows Design

MasterPlanforReservationSmallBusinessEconomy �

Foreward

Entrepreneurs—call them the “private sector,” small business owners, traders or independent ones, call them whatever you like, but the entrepreneurs have a very special role in Indian Country. They are the bridge from the past to the future.

Entrepreneurship was culturally, socially, and economically a part of the fabric of the community, inseparable, like the first strands woven into the structure of a basket, built to hold roots or berries or dried salmon. If we are ever going to have a world that is in balance again, the entrepreneurs have to play an important part in achieving and keeping that balance.

So how tribal government and the tribal community support the entrepreneurs (espe-cially the young ones) will be one of the key tests for how the Confederated Tribes of the Umatilla Indian Reservation will be able to transform ancient and enduring values and visions into a viable and sustainable economy. If ctuir can rebalance things, it can truly thrive. So entrepreneurs, small business owners, traders, whatever you call them, are pretty important!

Tom HampsonExecutiveDirectoronaben

Increasingly, tribal members are beginning to see small businesses as one of the path-ways out of dependence and into true sovereignty. “Why does the government have to do everything, own everything?” “We need to circulate our money in our own community.” But it’s a long road, and a hard one. The tribal small business sector is young—in its infancy. How do we make the transition from an economy dominated by gaming and federal transfer payments to an economy where ownership and assets are more evenly distributed? How do we build on what’s been accomplished so far to show tribal youth the way forward? That is what this plan is about.

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Introduction

In 2008 the Tribes’ Business Service Center (Center), Department of Economic and Community Development (decd), and onaben partnered to develop this plan with support from the Administration for Native Americans (ana). The plan’s goals are to:

Build a broad consensus in the tribal community that tribal member-owned small businesses are a critical part of a strong tribal economy. Outline a strategy of government investment for supporting the emergence and growth of a strong tribal small business community.

Need The plan identifies the following areas that need to be addressed in the develop-ment of a stronger small business sector economy: community and leadership invest-ment, business assistance services, youth entrepreneurial education, access to capital, access to business facilities, and clarity of tribal business laws.

Capacity The Center has adequate capacity to provide counseling and technical as-sistance to pre-venture and small start-ups; serve as a liaison between small business owners and the tribal government; secure resources for technical assistance and loans; and support youth business clubs at two area high schools.

Gaps Additional investment is needed to advocate for stronger community investment; expand technical assistance, marketing, and networking for more advanced stage busi-nesses; expand youth entrepreneurship; develop affordable commercial facilities; improve access to new and existing sources of capital; and clarify tribal business laws.

Plan We propose six long-term strategies that focus on either removing barriers or gradu-ally improving the climate of support for tribal entrepreneurs and small business owners:

Increase Community & Leadership Investment Continue and expand business assistance Establish entrepreneurship experience for every tribal youth Advocate for affordable business facilities Improve access to capital and asset-building tools Advocate for business-friendly tribal laws and policies

Resources Needed Over time, the plan will require additional staff and consulting capacity as well as periodic capital for facilities and credit/equity/matched savings funds.In the first five years, primary resource needs are for an AmeriCorps or similar intern to jump-start the youth entrepreneurship efforts.

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Economic Sovereignty

Today, more and more tribal leaders are recognizing that true economic sovereignty requires that tribal members control business assets in their economy.


VisionOur vision is a resilient tribal economy that provides numerous and diverse economic opportunities for tribal members to support their families. This economy includes a strong private sector consisting of Native Americans who own and operate a variety of businesses in the region, both off and on the Reservation. Some of these businesses are highly visible storefronts. Others are operating out of private homes and through the Internet.

There is an atmosphere of encouragement and support for Indian-owned small busi-nesses. These businesses bring in an increasing amount of income to the Reservation every year.

Specifically, this economy can be described in the following ways:

Community Investment. Community members consistently look for ways to put money back into the Reservation economy by buying from Indian-owned small businesses. Every tribal leader personally promotes community pride in Indian small business. ctuir government, as a matter of policy, prioritizes individual tribal mem-bers’ small business growth and expansion.Business Assistance. Tribal entrepreneurs at all stages of the business lifecycle, from pre-startup to exit strategy, can get the help they need at the Business Service Center. Youth Entrepreneurship. All tribal youth know an entrepreneur in the commu-nity and have “tried out” small business either through visitation, work experience, internship, developing and implementing their own business plan, or participating in a summer business camp.Affordable Facilities. Small businesses can find affordable commercial and indus-trial space for rent on and off the Reservation. Access to Capital and Asset Building. Every tribal small business can access the kind of capital they need for start-up and expansion. Every tribal family has access to “asset building” services like financial literacy, individual development accounts, and workforce development assistance to help them get financially stable. Business-friendly Policies. Small business operations on the Reservation are governed by transparent business laws that provide clarity without needlessly hin-dering business success.

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Vision for Small Business Sector of the Tribal Economy

What does a successful small business environment on the Reservation look like?

“Things start in ways that don’t look like small business at first. It might look like a community garden or someone having a yard sale every weekend. Those are the beginnings of com-munal thinking. It shows that spark. People selling log made furniture out of their garage. That’s how it begins.”

Bobbie Conner, Director, Tamástslikt Cultural Institute

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Community and Leadership Investment Strategy 1

Tribal business leaders and community members told us that the tribal community is not very supportive of tribal small business. This is a very challenging barrier to overcome because this lack of support is both a cause and a symptom of a struggling private sector. What can the public sector do to strengthen the private sector? Tribal government can set the tone and provide a supportive policy environment, but a good part of the solution is going to come from individual tribal members stepping up and demonstrating this leadership outside of the government realm.

Needs

Any small business needs support from customers, neighbors, family and friends to get started and to grow. But right now, tribal small business owners comment on the lack of support from the tribal community. The public sector economy on the Reservation is so predominant that some tribal members and even community leaders don’t understand why it’s important for there to be tribal member-owned small businesses. Of course, many tribal members know how important it is to circulate money as many times as possible on the Reservation. The challenge is that there are so few places on the Reserva-tion to spend money, and it will take years to grow enough tribal small businesses to effectively capture the multiplier effect of gaming and federal dollars. In the meantime, every fledgling tribal business needs as much encouragement and support from the com-munity as possible.

Small businesses also need visible, moral support and investment from tribal leadership. ctuir has the best track record of government support for small business of any tribe in Oregon. If we are going to rebuild a resilient tribal economy, we need that support to continue and to grow stronger. Small business must be recognized as an economic sover-eignty strategy that is just as important as building strong tribal-owned enterprises.

Non-profit organizations operating on Reservation also play a key role in small business development. When non-profits are successful from a mission and business perspec-tive, they make vital contributions to their community’s economic well-being. Not only do they serve as advocates for the community, but are also employers and sources of economic activity. Non-profits use inputs (labor and capital) to produce outputs (goods and services) just like their for-profit counterparts. In doing so, they create opportunities for small businesses.

Be supportive of business owners – acknowledge their accomplishments, give encour-agements, and give them your business.

Patty Hall, owner The Hair Gallery


Vision: Community members consistently look for ways to put money back into the Indian economy by buying from Indian-owned small businesses. Every tribal leader personally promotes community pride in Indian small business. ctuir government, as a matter of policy, prioritizes individual tribal members’ small business growth and expansion.

Pat and Ric WaltersStudio 421

Action Plan

What Who When How

Recognize tribal small business develop-ment as a critical practice of sovereignty within all relevant tribal policy making and planning

Board of Trustees

2009 Adoption of this Plan and Policy on Tribal Small Business

Include small business development as a high priority within the Tribes’ Compre-hensive Plan, Overall Economic Develop-ment Plan, and other relevant plans

Board of Trust-ees, Manage-ment Team

2009 Ensure that relevant tribal plans are con-sistent with this plan

Develop regular community information activities to expand understanding of the importance of tribally-owned small businesses (publications, tours, celebra-tions, etc)

Business Ser-vice Center

Starting 2009 and ongoing

As staff time is avail-able; seek additional staff support through RARE or AmeriCorps type position

Provide specific support to the emerg-ing Native American business leadership group on the Reservation, the Native American Business Alliance

Business Service Center, Board of Trustees

Ongoing Bi-monthly group meetings, recruit clients to lead the group , coordinate an annual meeting with bot

Advocate for ctuir Tribal Government to increase procurement from Indian vendors where possible

Business Service Center and decd


Develop contact list of Indian-owned businesses for purchasing agents, develop ctuir & WRC policies

Recognize the importance of the not-for-profit sector in tribal policy and planning documents, and invest in technical assis-tance to these non-governmental social enterprises whenever possible

Board of Trust-ees, Business Service Center, decd


Incorporate in Comprehensive Plan and in Departmental Work Plans

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Business classes and counseling are the primary ways that ctuir can help grow the Indian-owned economy. A long-term commitment to offering these services has put ctuir in the forefront of tribes nationally. Business startup and expansion is influenced by many factors outside the control of the Business Service Center or tribal government. It’s important to remember that success is incremental and sometimes subtle.

Business Assistance Strategy 2

Indianpreneurship Class ubsc

Buy from Indian-owned businesses that offer a good quality product or service and understand that you are sup-porting a tribal family.

Judge William Johnson

“In the 70s and 80s you could count on one hand the num-ber of small business owners on the Reservation. When the Business Service Center program started we made the prediction that as the tribal enterprise development got established and people got their asset base squared away and had cash flow coming into their households and got tired of what they were doing, the entrepreneurial spirit would come out and the participation in the classes would increase. Looking at it today with that long perspective it’s firmly established as a viable thing to do, that Indians can participate and be competitive in the private sector. It will grow at a much faster rate than it has over the last 30 years.”

Tom Hampson, Executive Director onaben


Vision: Tribal entrepreneurs at all stages of the business lifecycle, from pre-startup to exit strategy, can get the help they need at the Business Service Center.

Ellen TaylorThe Clarence Burke Gallery

Needs

There are 24 Indian-owned small businesses operating full or part-time on and off the Reservation. To rebuild a resilient tribal economy with a strong private sector, we need to encourage the start-up and expansion of many more tribal member-owned businesses. An effective small business assistance program provides focused technical assistance and counseling at every transition point in the business lifecycle:

Moving from the planning stage to the start-up stageMoving from part time to full timeMoving from an at-home business to one paying rentAdding employeesCompeting in new marketsTaking on outside debt and equitySuccession planning and exit strategies

The Business Service Center has focused attention on the transition from planning to start up. Over time, as more businesses start up and grow, we’ll need more specific tech-nical assistance and counseling for the other stages in the business lifecycle.

Objectives

What Who When How

Continue to offer current level of classes, counseling, and technical assistance to entrepreneurs


Ongoing Everything is in place to continue this service

Offer a second level class (Indianpre-neurship II) focusing on small business management for existing business owners

Business Service Center and onaben

2009 and ongoing every other year

Additional funding will be needed in 2011 and every other year thereafter

Expand technical assistance as business needs change (for example, explore different kinds of technical assistance and peer business network programs, help businesses with off-reservation marketing, and assisting “underground” businesses in becoming “street legal”)

Business Service Center and onaben

2010 and ongoing after that.

Regular client needs assessment every 2-5 years. Additional funding may be needed

Secure a larger space for the Business Service Center to offer more targeted technical assistance and support ser-vices


2 – 5 years

Seek opportunities to move into new space as available

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Many kids are naturally entrepreneurial—curious, motivated, ready to take risks and ready to learn. The biggest impact in growing tribal small businesses, long term, will come from exposing more tribal youth to entrepreneurs and by creating opportunities for them to practice entrepreneurial behavior.

Needs

Exposure to tribal businesses Small business advocates agree, the best way to jump start entrepreneurship in a community is to focus on youth. Right now the tribal economy is lopsided, with so much employment in the public sector and so little small business activity, that most tribal youth can graduate from high school and never know someone in a small business. So the first need is for exposure—simply to introduce small business owners to tribal youth and to give youth a chance to spend an hour or a day observing or working in a small business. Tribal youth need to see examples of tribal people owning a business and creating wealth.

Youth Entrepreneurship Strategy 3

Randy MeltonMission Music Productions


Opportunities to practice entrepreneurship The next step is to give young people opportunities to practice the skills of entrepreneurship themselves. This can be everything from organizing a fund-raiser to starting a student-owned business. Some graduates of these programs may go on to start businesses. Even the ones who do not will have a better understanding of their own talents and abilities as well as a stronger understanding of the role of small business in the economy.

Objectives

What Who When How

Continue to offer the American Indian Business Leaders (aibl) club at area high schools. Expand program to new schools as staffing allows.

Business Service Center and new intern

New intern sought for 2010-2011

Seek funding, physi-cal space, and school support for new intern

Integrate an entrepreneurship curricu-lum into area schools (K-12) - initially at high school level and then slowly expand from there as feasible.


5+ years Funding for cur-riculum; school-based support; and funding for intern

Expand tribal high school student access to summer intensive entrepreneurship programs.

Business Service Center with decd sup-port

2 - 3 years Assist students with fund-raisers to cover costs

Expanding opportunities for youth to practice running a business through providing direct assistance in setting up an enterprise at school or after school.


2010 and ongoing

Funding for intern, school-based sup-port, staff time

Offer business plan type competitions or similar to encourage innovation.

Business Service Center support onaben’s pilot project

5+ years Staff time, new part-time position, onaben support

Provide or support youth financial literacy classes at the elementary, middle, and high school levels

Housing Authority with Business Service Center support

2011 and ongoing

Funding for cur-riculum, staff time, school-based support

Pilot test site for onaben youth entrepre-neurship curriculum

Business Service Center with onaben support

2011 -12 school year

Staff time, new part-time position, long-term funding for curriculum

How can the community sup-port tribal businesses?

“Certainly encouragement— an attitude of encouragement and hopefulness. A patience and acceptance of mistakes, not forbearance but an under-standing that mistakes will go by as part of learning. A loyalty to spending their money. A willingness to try new things, new industries, new jobs. Sup-port for youth entrepreneurial things would be great.”

Bobbie Conner, Director, Tamástslikt Cultural Institute

Vision: All tribal youth know an entrepreneur in the community and have “tried out” small business either through visitation, work experience, internship, developing and implementing their own busi-ness plan, or participating in a summer business camp.

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There are currently no storefronts available on the Reservation for a small business to rent or lease. For some small business start-ups, it is appropriate for them to locate their business in Pendleton. However, those who want to operate on the Reservation have to operate out of their home. It is a step forward for the ctuir to have “shovel-ready” building sites at Coyote Business Park, but it’s not feasible for most start-up businesses to build and own their own building.

Needs

Right now most small businesses on the Reservation operate out of their homes. For start-up businesses, that can be an appropriate way to keep costs low. But many busi-nesses grow to the point where they do need their own space - either a storefront or some type of commercial, office, or industrial space. These early-stage businesses need rentals or leased space. It usually doesn’t make sense to buy or build a building until a business is much more established (and even then some business models prefer to lease permanently.)

Currently, there is literally no available commercial or industrial space in an existing building for rent or lease on the Reservation. Some businesses may find it more profit-able to operate off the Reservation (for example, in Pendleton). But as the number of small businesses on the Reservation grows, the need for affordable commercial space on the Reservation will increase.

One approach to providing affordable commercial space is a business incubator – physical space that offers management guidance, technical assistance and consulting customized for young growing companies. Incubators usually also provide clients access to suitable rental space and flexible leases, access to a conference room, shared basic business services (such as bookkeeping) and office equipment, technology support services, and assistance in obtaining the financing necessary for company growth. The goal of an incubator is to improve the chances for start-up and early stage businesses to grow into healthy, sustain-able companies.

A feasibility study, recently completed by Greenwood Consulting Group, Inc (gcgi), concludes that “there is likely insufficient demand (at this time) for a business incubatoramongcurrentlyactiveoremergingctuirentrepreneurs,andthereforea‘ctuironly’incu-

Affordable Business Facilities Strategy 4

“There’s nothing [storefronts] available here at this time. There has been talk about Four Corners and Coyote Business Park, but nothing has hap-pened. It needs to be a reason-able price – on reservation.” Dana Bumgarner, ownerCayuse Country Flowers & Gifts

MasterPlanforReservationSmallBusinessEconomy ��

batorwouldnotbefeasible.However,gcgibelievesthereisenoughdemandamongctuirmembersandnon-Reservationmemberstomakeabusinessincubatorfeasible.”

The primary value of an incubator is the networking and human capital development that takes place there – both between the entrepreneur and the incubator manager and amongst the entrepreneurs. We recommend that we pursue this type of business incuba-tion as a strategy when we have determined it is feasible. Any small business incubator or flex space will require tribal investment and we recommend that the Board of Trustees include this project in capital planning.

In the meantime, we will both continue to seek opportunities to build subsidized commercial space and to expand the non-facility-based incubation services we now of-fer (management classes, technical assistance, financial assistance, etc.) bsc and decd staff will also have discussions with non-Reservation service providers to determine the viability of an incubator that would house both Native American and non-Native entrepreneurs.

Objectives

What Who When How

Incorporate a small business facility into the Tribe’s mid-range capital facility planning

Board of Trustees

2009-2014

Include on Capital Fa-cilities Plan for future tribal funding

Identify anchor tenant for new commer-cial development on the Reservation

decd and Busi-ness Service Center

2009 and ongoing

Incubator survey, collaborate with area economic develop-ment agencies, mar-ket Coyote North

Develop affordable retail and service building storefronts available for lease on Reservation. Initially these may be kiosk type locations within Wildhorse or Arrowhead, but eventually they would include stand-alone retail and/or com-mercial space.

decd, Wild-horse, and Business Ser-vice Center

2 – 10 years

Identify space within Arrowhead and future Wildhorse expansion, counsel clients interested in retail space or kiosk, assist in development of leasing guidelines

Explore the feasibility of building and operating a small business incubator, providing both affordable space and a network of shared business services.

Business Service Center and decd

Complete feasibil-ity study in 2009. Revisit every 2-5 years.

Complete incuba-tor feasibility study. When incubator becomes feasible, complete incubator development plan.

Vision: Small businesses can find affordable commercial and industrial space for rent on the Reservation.

“Native communities have post-traumatic stress, post colonial stress in overcoming those self-confidence issues. That’s why positive business climate is more than a good regulatory environment. It’s an attitude on the part of the community that small business is worthwhile.”

Tom Hampson, Executive Director onaben

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Access to capital may not be the most significant barrier to small business start-up and ex-pansion, but it is a barrier and takes some uniquely challenging forms in Indian Country.

Needs

Access to Capital The typical sources of small business start-up capital (family savings and home equity) are much harder for tribal families to come by. Most business loans re-quire business experience, clean credit, equity investment, and collateral including home

equity. Very few of our client businesses meet this profile right now. Tribal members have access to several sources of debt (Tribal Credit Fund, atni Revolving Loan Fund, and Greater Eastern Oregon Development Corporation’s Native American Entrepre-neur Revolving Loan Fund) that remain undersubscribed for business loans and oversubscribed for personal loans.

Right now most of our entrepreneurs could use start-up equity, but start-ups are very high risk and equity funding for very small businesses is not typically available from the private sector.

As more businesses start up and grow, we anticipate increased need for business loans, but for now, the primary need is for asset building services (or help with personal fi-nancial literacy and credit repair.)

Asset Building (Personal financial literacyand good credit) Before you can effectively start a business, you have to be able to man-age your own spending and savings. You must have good credit in order to qualify for the kind of debt you often need to buy

Access to Capital and Asset Building Strategy 5

Brad and Kelley SpencerFirst Impressions Handcasts


equipment or inventory. Even though the Business Service Center doesn’t provide basic financial literacy and credit repair services, we recognize that these services have to be available in the community or our clients will not succeed in business.

Objectives

What Who When How

Advocate for a comprehensive ctuir asset building or “family resiliency” program that pulls together financial literacy and access to credit.

Board of Trustees and Management Team

2009 and ongoing

Complete com-prehensive “family resiliency” plan to strengthen financial literacy program

Explore options for reorganizing or expanding tribal credit services to bet-ter match the needs of small business owners

Business Service Center and Tribal Credit

2010 Identify loan needs, assess available loan programs, identify gaps and determine best options for filling gaps

Develop a matched savings program (Individual Development Accounts) for small business equipment purchases

Business Service Center, urha Finan-cial Literacy Program, and decd

2011 bot budgetary com-mitment, staff time, partnership with a financial institution

Explore options for structuring equity investments in tribal small businesses

decd and Busi-ness Service Center sup-port

5 - 10 years

Funding, staff time for research and imple-mentation

What would a successful pri-vate sector economy look like on the Reservation?

“Indian-owned businesses providing services to the Tribe and taking over some of the functions tribal government doesn’t do well: office supplies, travel agency, maintenance, residential housing, etc. Why does the Tribe have to do it all?”Judge William Johnson

Vision: Every tribal small business can access the kind of capital they need for start-up and expansion. Every tribal family has access to “asset building” services like financial literacy, individual development accounts, and workforce development assistance to help them become financially stable.

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A patchwork of tribal, federal, and state law applies variously to aspects of life on the Reservation. Commercial law in particular is relatively less developed than other tribal laws. These issues are not necessarily obstructing the growth of existing tribal small busi-nesses. But they do contribute to an overall atmosphere of uncertainty that discourages business startup and expansion on the Reservation.

Needs

The legal environment on a Reservation is often a complex patchwork of jurisdictions. Who governs food safety? What kinds of certifications does a tribal business need to have? It’s often unclear. Tribal law for business is often not as developed as other areas of tribal law. Tribal small businesses often ask for clarity on what laws apply to them, and sometimes tribal staff doesn’t know the answer. Tribal small businesses need tribal laws on business to be stable and transparent.

Objectives

What Who When How

Adopt policy statement affirming im-portance of small business to a stronger tribal economy.

Board of Trustees

2009 Adoption of this Plan

Review ctuir Tribal Codes with respect to home-based business operations. Consider updates as necessary to clarify prevailing law.

Business Service Center, Tribal Planning Office, and Department of Justice

2010 Interview home-based business own-ers, review other rural codes, amend codes as needed

Complete adoption of relevant sections of Uniform Commercial Code.

decd and Department of Justice

3 – 5 years

doj and decd staff time

Review options for adopting business registry requirements on the Reservation with the eventual adoption of a business license

Business Service Center and Department of Justice

1 – 2 years for registry; 5 – 10 years for license

Review business registry policies and procedures in surrounding area, Develop policy and procedures for ctuir

Review commercial certifications and consider potential adoption of relevant ones.

Business Service Center and Department of Justice

10 – 20 years

Adopt State or Fed-eral certifications or develop Tribal

Policy Support for Small Businesses Strategy 6

As the CTUIR develops its own economy there’s a place for tribal entrepreneurs. We’re getting to the point where the amount of services and money being pushed through Tribal government and Tribal enter-prises, including the Casino, can support a private sector economy in our communities.

Gary E. George, Chief Operating Officer Wildhorse Resort and Casino

What harms entrepreneurship is too many subsidies, which set up false expectations.

James Lavadour, professional artist


What’s the most useful thing tribal government could do to strengthen the private sector on the reservation?

1. Provide ongoing business education to adults and high school students2. Provide opportunities for locating businesses on reserva-tion & provide incentives (e.g. matching grants)3. Minimize government bu-reaucracy 4. Get the bot and tribal admin-istration on board to promote small business development, show a pro-small business attitude, and encourage tribal members to take classes and utilize the Business Service Center.

Rex Baker, Senior Loan Officer and manager of Native American Revolving Loan Fund Greater Eastern Oregon Development Corporation

Vision: Small business operations on the Reservation are governed by transparent business laws that provide clarity without needlessly hindering business success.

Kathy Burke uBurke Buckskin Gloves

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Capacity and Needs

Community and Leadership Investment

Business Assistance Youth Entrepreneurship Business Facilities Access to Capital and \Asset Building

Policy Support

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Limited staff advocacy and encour-agement

i. ~200 hours per year of pre-venture and general business counseling~100 hours of technical assistance75 hours of business plan class (Indi-anpreneurship™) per year and 2 or 3 specialized business workshopsResources for market researchStaff support for bi-monthly Business Alliance meetings for existing businesses to network and discuss relevant business topics/issuesA limited amount of small business community education (stories in the cuj, newsletters, web page, brochures, pre-sentations to the Economic & Commu-nity Development Committee and the Umatilla Reservation Housing Authority financial literacy class)Small business management program – Indianpreneurship IIDeveloping and expanding the existing relationship with onaben and with other non-profits such as oweesta, such that the Center often partners with onaben on program development and grant applications

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Sponsorship of American Indian Business Leaders (aibl) clubs at 2 high schools

i. Support for a feasibility analysis for a small business incubatorAssistance to small businesses in deter-mining whether rentable “kiosk space” at Wildhorse or Arrowhead is suitable for themReferrals to developers for any business-es who are ready to finance a building (so far, none are able to do so)

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Referrals to existing sources of debt (Na-tive American Revolving Loan Fund, etc). and asset building services at Umatilla Reservation Housing Authority

i. A liaison to tribal government to repre-sent small business interests, sufficient to be engaged in about one major advocacy project per year (example: participating in review and reform of ctuir Land Development Code provisions on industrial and commercial develop-ment in 2007)

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Staff time to develop open houses, business tours, and other celebra-tory, educational, and promotional events on a regular basis (similar to a Chamber of Commerce) to encour-age investment by the community and leadership.

i. Funding for ongoing Indianpreneurship II classes (with a focus on helping exist-ing businesses grow)Funding for other technical assistance services for businesses past the start up stage, including helping businesses connect to urban and off-Reservation markets and networksMore space for Business Service Center to create a place for clients to come in and use the computer and other resourc-es (365 feet2 is not enough for two staff and business services; 1000 square feet is desirable in order to add a dedicated business resource room)

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Time and money to offer additional business clubs at area schools Time and money to make sure that youth entrepreneurship programs are offered at area schoolsSponsoring youth-run businessBusiness plan competitionTime and scholarship support for more youth to attend summer business camps

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A sponsor or anchor tenant to subsidize the cost of new commercial space on the Reservation (new construction cost is likely not to be affordable for new busi-nesses)Funding for shared technical services and space (business incubator) as that becomes feasible

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Staff time and start-up funding to set up a matched savings program (IDA) for businesses (Equity for IDA and partner agency to administer)Help with exploring equity investment programFinancial literacy classes for youth

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Tribal attorney time to review tribal business codes, draft revisions if neces-sary, and shepherd proposed changes through the public review processTime to develop business registry and eventual business license, explore com-mercial certificationsPolicy about how tribal government sup-ports small business growth

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25% time staff person i. Funding for expansion of the small business center and services, ongoing Indianpreneurship II small business man-agement program (funding is secured for the first year but not beyond), and inten-sive “coaching” type business counseling

i. 50% fte staff time to sponsor addition-al American Indian Business Leaders clubs at other area high schools and advise students in business start up and operations. Funding for entrepreneurship curricu-lum (estimated $1500 per class) plus dedicated partnership with specific teachers. Scholarships for student attendance at intensive summer programs. Cash awards and advising time for business plan type competitions.

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Additional resources would be needed to build and staff new space. A very rough estimate might be $750,000 - $1 million for a 5,000 square foot incubator building, plus funding for staff to provide services at the facility.

i. Dedicated ctuir staff time and funding to develop an equity investment program, a matched savings program, an invest-ment program for tribal enterprises, or expanded financial services to help “unbankable” clients clear their credit, establish savings, and become eligible for bank financing.

i. Dedicated Department of Justice staff time to advance proposed changes in tribal law. Some bsc staff time would be needed to shepherd the proposals through the public input process.

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Capacity and Needs

Community and Leadership Investment

Business Assistance Youth Entrepreneurship Business Facilities Access to Capital and \Asset Building

Policy Support

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Limited staff advocacy and encour-agement

i. ~200 hours per year of pre-venture and general business counseling~100 hours of technical assistance75 hours of business plan class (Indi-anpreneurship™) per year and 2 or 3 specialized business workshopsResources for market researchStaff support for bi-monthly Business Alliance meetings for existing businesses to network and discuss relevant business topics/issuesA limited amount of small business community education (stories in the cuj, newsletters, web page, brochures, pre-sentations to the Economic & Commu-nity Development Committee and the Umatilla Reservation Housing Authority financial literacy class)Small business management program – Indianpreneurship IIDeveloping and expanding the existing relationship with onaben and with other non-profits such as oweesta, such that the Center often partners with onaben on program development and grant applications

i.

ii.iii.

iv.v.

vi.

vii.

viii.

Sponsorship of American Indian Business Leaders (aibl) clubs at 2 high schools

i. Support for a feasibility analysis for a small business incubatorAssistance to small businesses in deter-mining whether rentable “kiosk space” at Wildhorse or Arrowhead is suitable for themReferrals to developers for any business-es who are ready to finance a building (so far, none are able to do so)

i.

ii.

iii.

Referrals to existing sources of debt (Na-tive American Revolving Loan Fund, etc). and asset building services at Umatilla Reservation Housing Authority

i. A liaison to tribal government to repre-sent small business interests, sufficient to be engaged in about one major advocacy project per year (example: participating in review and reform of ctuir Land Development Code provisions on industrial and commercial develop-ment in 2007)

i.

Op

po

rtu

nit

ies

Staff time to develop open houses, business tours, and other celebra-tory, educational, and promotional events on a regular basis (similar to a Chamber of Commerce) to encour-age investment by the community and leadership.

i. Funding for ongoing Indianpreneurship II classes (with a focus on helping exist-ing businesses grow)Funding for other technical assistance services for businesses past the start up stage, including helping businesses connect to urban and off-Reservation markets and networksMore space for Business Service Center to create a place for clients to come in and use the computer and other resourc-es (365 feet2 is not enough for two staff and business services; 1000 square feet is desirable in order to add a dedicated business resource room)

i.

ii.

iii.

Time and money to offer additional business clubs at area schools Time and money to make sure that youth entrepreneurship programs are offered at area schoolsSponsoring youth-run businessBusiness plan competitionTime and scholarship support for more youth to attend summer business camps

i.

ii.

iii.iv.v.

A sponsor or anchor tenant to subsidize the cost of new commercial space on the Reservation (new construction cost is likely not to be affordable for new busi-nesses)Funding for shared technical services and space (business incubator) as that becomes feasible

i.

ii.

Staff time and start-up funding to set up a matched savings program (IDA) for businesses (Equity for IDA and partner agency to administer)Help with exploring equity investment programFinancial literacy classes for youth

i.

ii.

iii.

Tribal attorney time to review tribal business codes, draft revisions if neces-sary, and shepherd proposed changes through the public review processTime to develop business registry and eventual business license, explore com-mercial certificationsPolicy about how tribal government sup-ports small business growth

i.

ii.

iii.

New

res

ou

rces

req

uir

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25% time staff person i. Funding for expansion of the small business center and services, ongoing Indianpreneurship II small business man-agement program (funding is secured for the first year but not beyond), and inten-sive “coaching” type business counseling

i. 50% fte staff time to sponsor addition-al American Indian Business Leaders clubs at other area high schools and advise students in business start up and operations. Funding for entrepreneurship curricu-lum (estimated $1500 per class) plus dedicated partnership with specific teachers. Scholarships for student attendance at intensive summer programs. Cash awards and advising time for business plan type competitions.

i.

ii.

iii.

iv.

Additional resources would be needed to build and staff new space. A very rough estimate might be $750,000 - $1 million for a 5,000 square foot incubator building, plus funding for staff to provide services at the facility.

i. Dedicated ctuir staff time and funding to develop an equity investment program, a matched savings program, an invest-ment program for tribal enterprises, or expanded financial services to help “unbankable” clients clear their credit, establish savings, and become eligible for bank financing.

i. Dedicated Department of Justice staff time to advance proposed changes in tribal law. Some bsc staff time would be needed to shepherd the proposals through the public input process.

i.

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Critical Resources from Other Tribal Programs

A strong Reservation small business economy can only be built on a foundation of personal financial literacy and strong work ethic and skills. Other tribal government programs are charged with providing opportunities to develop and practice these skills.

Even though these programs are not designed specifically for small businesses, it is cru-cial for small business success that they are continued and expanded over the next twenty years.

Financial Literacy

Currently, the Umatilla Reservation Housing Authority (urha) offers two five-week classes per year on basic personal financial literacy. Because financial literacy is the basis of all financial success, we strongly recommend that this program continue and expand to add classes focusing on youth financial literacy.

Workforce Development

CTUIR Human Resources is developing a workforce program that will take a com-prehensive, case-management approach to assisting tribal members make a successful transition to the workforce. Ideally, this program will continue and will provide tribal members with solid, production-oriented work experiences in a private-sector type en-vironment.

Expanded Consumer Credit Services

The CTUIR Tribal Credit Committee manages a revolving loan fund that currently provides loans from $500 to $10,000. This service provides a crucial last resort loan for tribal members who can’t get credit elsewhere.

There is a general need for integrated consumer education and consumer lending services on the Reservation as part of a broader “family resiliency” agenda to help tribal families expand savings and survive setbacks. There is a lot of excitement in Indian Country right now about the potential of Community Development Financial Institutions (cdfi) to meet this need. cdfi feasibility is a separate topic requiring careful consideration as a potential new tribal social enterprise requiring significant investments of human and financial capital.

How can the community sup-port small business?

“The obvious answer is spend-ing money at the entrepre-neurs. To speak highly of the entrepreneurs. The community won’t embrace the entrepre-neur until the entrepreneur has shown that they really understand their business and provide a quality product at a good price. After they are providing quality service and backing their products, people will embrace it. Once they embrace it they’ll start spending money, they’ll start talking about it. It won’t come overnight.”

Gary E. George, Chief Operating Officer Wildhorse Resort and Casino

Valerie Guzman qBohemian Boutique


Small Business Policy Objectives

Distinguish between public sector and private sector economic activities. Identify and remove obstacles to private sector economic growth. Identify opportunities for tribal government to encourage private sector growth. Implement changes so that tribal government does encourage private sector growth.

(Proposed) Policy Statements (for adopting resolution)

ctuir acknowledges and affirms the importance of tribal member-owned small businesses as a critical part of sovereignty and of a healthy tribal economy. While a strong set of government owned and operated enterprises is needed to generate revenues for essential governmental services, it is the policy of ctuir to seek op-portunities to strengthen and expand the ability of tribal members to succeed in their own businesses. It is the policy that the Tribe will focus ctuir economic development efforts on business opportunities that ctuir has a unique advantage in, rather than on busi-ness opportunities that are likely to be operated successfully by individual tribal members. ctuir shall systematically review tribal codes, tribal government operations and

Identify barriers to tribal member-owned businesses operating on the Reserva-tionIdentify opportunities to encourage tribal member-owned businesses operating on the Reservation. Report back to the bot within one year on a plan to remove barriers and expand opportunities for tribal member-owned businesses on the Reservation.

ctuir acknowledges and affirms that personal financial literacy is one of the founda-tions upon which successful businesses are built. ctuir further acknowledges and affirms that financial literacy is one of the most important skills tribal members need to be able to provide for themselves and their families. As a matter of policy, ctuir supports personal financial literacy as a priority tribal program.

1.2.3.4.

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3.a.

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Policy Recommendations

“Adopt policy and procedures to support the private sector on reservation that includes counseling and financial aid (a loan and/or grant program). Leaders need to be pro-busi-ness and talk the talk.”

Jill Pambrun, Commercial Loan Officer and Indianpreneurship Instructor

�0

Native American-owned Small Businesses

Arrowhead Forestry • Judy & Dale Jenner, owners (Pendleton)Bohemian Boutique • Valerie Guzman, owner (Pendleton)Bumgarner Trucking • Dana & Chuck BumgarnerBurke Buckskin Gloves • Kathryn Burke, owner part-timeCayuse Country Flowers & Gifts • Dana Bumgarner, ownerCayuse Saddlery • Woody Star, owner part-timeClarence Burke Gallery • Ellen Taylor, owner (Pendleton)Cut it Again Sams • Margaret Sams, owner (Pendleton)Edge of the Wild Taxidermy • Bob Fossek, owner part-timeThe Hair Gallery • Patty Hall, owner (Pendleton)First Impressions Hand Casts • Brad & Kelley Spencer, ownersFred Hill • comedian & emcee part-timeJames Lavadour • artistJulia Jameson Hopkins • bookkeeper (Portland)Ken Hall Landscaping • Ken Hall, ownerMission Music Productions • Randy Melton, owner part-timeNDN Supply • Janyce Quaempts & Kelly Snively, ownersNative World Productions • Ben Bearchum, owner part-timeNeed to Ship & The Nickel Auction • Penny Walker, owner (online)Phoenix Enterprises NW, LLC • Jonetta Everano, ownerRaphael’s Restaurant & Catering • Raphael & Rob Hoffman (Pendleton)Studio 421 • Ric & Pat Walters, owners (Pendleton)Verkist³ • Lyndsey Verkist, owner (Weston)Western Star Painting, LLC • Mike & Mona Yeager, owners (Pendleton)Wildbill Productions • Cedric & Tania Wildbill, ownersWolf Song Fisheries • Alice & Clifford Shippentower, owners3 Bears Construction • Bill Bowling

Of the following businesses that opened and closed during the past ten years, one business owner moved out of state, one business was sold, and one closed due to the owner’s health concerns.

Michael Angelo’s Branches • owner moved to WashingtonBlackhawk Protection Birds N’ More Cayuse Gallery • closed storefront but continues to sell beadwork Sacred Grounds Medicine Hands Therapeutic Massage


Appendices

History of Tribal Business Economy Native American Business Ownership – Opportunities and ChallengesSpecific Challenges to Small Business Startup and Expansion in the Gaming EraLessons from other Native Business Enterprise InitiativesMethodologyStakeholder Interview Summary

1.2.3.4.5.6.

�� DepartmentofEconomic&CommunityDevelopment

1. History of Tribal Small Business Economy

The Cayuse, Umatilla, and Walla Walla people are inhabitants of the Columbia Plateau (Plateau). Trade was a strong unify-ing factor within the Plateau. People within each area of the Plateau, Northwest Coast and Plains participated in trade through the production and procurement of natural items available in their areas and scarce elsewhere.

The opportunity to accumulate wealth was available to all adults in the Plateau, limited only by an individual’s energy and ambition. There was a division of labor: men fished and hunted and women collected vegetal foods. Each gender provided about half the food. Women in particular owned the food they gathered and could trade it if they desired.

“The geographic setting placed the Uma-tilla, Walla Walla, and Cayuse in the prime situation of being the middlemen of trade between the buffalo country of the Great Plains and rain forest and ocean resources of the Pacific Coast cultures. Tribal members relied on trade goods from the plains such as buffalo meat and hides, obsidian from the south as well as abundant seafood, plants, and medicines from the Pacific Northwest coast.

The abundance of salmon in the Columbia and Snake Rivers and their tributaries gave wealth to the tribes who fished there. They dried and processed the salmon for their own subsistence and for trade to other tribes of the Plateau and surrounding regions.

The tribes owned a tremendous number of horses. Prestige and wealth were partially reflected by the number of horses that a per-son owned. The horse improved mobility and brought the Cayuse, Walla Walla, and Uma-tilla into contact with other Indian cultures. Horses allowed members to travel further and faster. Horses allowed the introduction of new ideas from new places and allowed other Indians to travel and trade along the Columbia River. If there was a surplus of food supplies and/or horses procured during the seasonal round, the surplus would be used for trading to obtain desirable resources.

Early contacts between the Pacific North-west tribes and the white culture were initially economic in nature. Initially, the tribes viewed the goods and supplies that foreign traders and trappers offered as a welcome addition to their already thriving economy.”

–ctuirComprehensivePlan1996

As the tribes lost control of their tradition-al resource base after the treaty of 1855, and lacked resources or tools to compete in the new economy, tribal members’ economic roles were constrained. On-Reservation economic activities focused on extractive industries controlled by outsiders. Many tribal families were forced to leave the Reservation to find work. During this time, entrepreneurial ac-tivities brought in much needed cash income to support families. Tribal members recall their grandparents surviving the Depression through a combination of home-grown pro-duce, reliance on traditional foods, seasonal labor, and other informal economic activities.

Change slowly began to come as the Tribes reclaimed the sovereign attribute of self-determination through self governance. The Constitution of 1949 was the beginning of the modern era of tribal self-governance, but for a long time there were no resources to ac-complish much.

The 1970s brought a new infusion of fed-eral funds for Reservation infrastructure and programs, and saw the beginnings of growth in the public sector Reservation economy. During the 1970s and 1980s, there were a few tribal small businesses started, but many fac-tors- lack of markets, lack of land ownership, lack of capital- made it especially challenging for on-Reservation business startups. During these years, many entrepreneurial tribal mem-bers maintained off-Reservation businesses or pursued careers in the off-Reservation private sector.

The passage of the Indian Gaming Regula-tory Act of 1986 and the subsequent opening of Wildhorse Casino Resort resulted in sig-nificant growth in the public sector economy. It has also provided spinoff business opportu-nities for tribal entrepreneurs.

2. Native American Business Ownership – Opportunities and Challenges

Native American culture is in some ways very well positioned for the creation of a socially responsible business sector. We have found that Native American values regard-ing community service and distribution of wealth remain strong when people consider entrepreneurship as an economic and lifestyle option. Among clients there is a strong belief that profit should not be earned for profit’s sake but for the purpose of benefiting others. These cultural factors make entrepreneurship

a particularly attractive strategy for “holistic” economic and community development.

On the other hand, Native American history and culture also poses substantial obstacles to fostering entrepreneurship. Most of our clients come from the reservation. On reservations, like most rural areas, the markets for businesses are scattered, disposable income is scarce and commercial space is inadequate. Familiarity with the market economy outside the reservation is sometimes limited. Often clients have credit problems and have experi-enced direct and institutional discrimination at the hands of Non-Indians. Therefore, the barriers to entry for a typical bsc client are often greater than a typical start-up business prospect.

Given these circumstances, self-employ-ment, is one of few viable options available to, and yet doubly challenging for, Native Ameri-can entrepreneurs. Despite this, in a compari-son of startup rates between 1997 and 2002 from the US Economic Census found Native Americans in Oregon and Washington going into business at higher rates, 7% and 22% respectively, than the national average of 4% for their counterparts.

—TomHampson,Exec.Dir.,onaben

Operating a small business is a challenge. Nationally the failure rate is quite high. Ac-cording to the Small Business Administra-tion website, estimates for businesses with employees indicate there were 649,700 new firms and 564,900 closures in 2006.†

Cultural norms create very specific needs in terms of structuring business development services and training materials. Basic business skills are the same throughout the economy, but how these skills are taught and connected to the life experience of individual entrepre-neurs differs markedly. It is precisely for this reason, as well as a lack of trust, that Native Americans are reluctant to go off reservation to obtain small business development assistance. Consequently, traditional programs provided by the Small Business Administration (sba) and others have been unable to make mean-ingful impact on historically low levels of Na-tive American participation in small business creation and ownership. This vital but little recognized factor is key in understanding the importance of providing on-reservation small business assistance with culturally appropri-ate curriculum. The Tribes’ partnership with onaben enables the Business Service Center staff to do just that.


For a typical Business Service Center cli-ent, the barriers to entry in the small business sector are often greater than that of non-Na-tive entrepreneurs. These include:

Many tribal members interested in starting a small business are 1st genera-tion entrepreneurs and have little or no experience in opening and operating a businessLack of access to appropriate debt & equity financing; lack of control of assets prohibit leveraging for business financ-ing and development; need for financial literacy education, credit repair, etc.Lack of existing buildings on reservation in which to locate a businessInadequate federal, state, and tribal policy support for entrepreneursPersonal issues – alcoholism, drug addic-tion, work ethic, etc.Size of business community on and near the reservation. Rural areas are difficult places to start businesses due to dispersed populations, lack of disposable income, and distance from suppliers.

Tribal leaders recognized the importance of tribal small businesses on the Reservation and also recognized that the existing small business support services off-Reservation were not adequate to meet the needs of tribal members. In June 1998, the Tribes and ona-ben – a Native American Business Network - signed a Memorandum of Understanding (mou). The mou outlined how the Tribes and onaben agreed to assist and collaborate with each other and with the Small Business Administration to provide small business de-velopment services to Native Americans who are within the service area of the Tribe.

The signing of the mou led to the establish-ment of the Business Service Center in Octo-ber 1998. onaben provides the following to the bsc program: curriculum and instructor, satellite workshops, center upgrades, technical assistance, money for specialized counseling, and nw Native American Business Directory.

The Business Service Center (Center) offers critical services such as individual busi-ness counseling, resource library, access to ba-sic office equipment, technical assistance, and business classes. Over the years additional services have been added: access to computers with business software, Indianpreneurship business classes, and workshops (marketing, website development, self promotion, artist in business, QuickBooks, etc.) In addition, Cen-

•

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ter staff worked with Greater Eastern Oregon Development Corporation (geodc) to es-tablish the Native American Entrepreneurial Revolving Loan Fund and started American Indian Business Leaders (aibl) clubs at Weston McEwen High School 5 years ago and more recently at Nixyaawii in 2007.

The Business Service Center is the most stable and longest operating small business center in the onaben network. Two 12-week Indianpreneurship I classes are offered twice a year and typically graduate 6 – 8 individuals. The bsc is also beta testing Indianpreneur-ship II – small business management classes. Ten existing business owners and managers are participating in the two-year program that is designed to help businesses grow.

Over the past 10 years, information and a variety of services have been offered to just over 200 individuals. Many of those individu-als came into the Center to find out what it takes to start a small business or to learn about the services provided. Some graduates of the Indianpreneurship I classes start a business, others plan for the future and some decide that business ownership isn’t for them.

Center staff continually assesses the needs of small business clients and changes or adds services to meet those needs. Through this master plan, staff is also striving to find solu-tions for the challenges listed above.

†Source:U.S.Dept.ofCommerce,Bureauofthe Census; Administrative Office of the U.S.Courts;U.S.Dept. ofLabor,EmploymentandTrainingAdministration.

3. Specific Challenges to Small Business Startup and Expansion in the Gaming Era

The growth of the public sector economy, fueled by gaming revenues and federal con-tracts, has created both opportunities and additional challenges for Reservation small business growth. Part of the challenge is that Wildhorse Resort and Tribal Government both grew so fast in the 1990s and early 2000s. After more than a century of suppression, the Reservation private sector was not poised for growth in the early 1990s and could not keep up with the growth in the public sector. Almost immediately, Wildhorse and Tribal government began to purchase goods and services in the off-Reservation, regional, and even national market.

Even the success of the modern tribal gov-ernment can, inadvertently, hinder private sec-

tor growth. A “public sector mindset” has taken hold at both the government and community level. For 14 years, Wildhorse revenues have enabled tribal government to start-up and op-erate enterprises on a subsidized basis. These enterprises are sheltered from competition and customer demands for excellence that shape private sector enterprises. Enterprise employ-ees and tribal community members have in some cases developed unrealistic expectations about how businesses operate because of these subsidized examples. Further, some commu-nity members have an entitlement mentality toward supplying goods and services to tribal government and enterprises. For some tribal members, there is the expectation that they should not have to compete equally for these contracts and, in some cases, a lack of under-standing that Wildhorse, for example, does compete for customers and must use vendors who can deliver a quality product or service, at a competitive price, in a timely manner.

Some tribal members may feel discouraged by the sheer size and speed of the public sec-tor economy and the amount of force it can bring to bear in the economy. For example, tribal government has proactively sought to control the most valuable commercial and industrial locations on the Reservation. Tribal government has borrowing capacity, backed by Wildhorse Casino revenues, for land and business acquisition and start-up. Although this capacity is modest by the standards of some casino tribes, it dwarfs the borrowing capacity of any individual tribal member. Tribal government has experienced attorneys, accountants, and technical staff who can assist ctuir enterprises in business planning and startup.

Some tribal members have been very concerned that tribal government would steal their business idea, or put them out of busi-ness, because there is no clear policy directive on what businesses tribal government might enter. The prospect of having an idea bor-rowed, stolen or overtaken by a bigger organi-zation that is better financed and more ready to move to market can be overwhelming and stifling. Together, these attitudes and percep-tions fostered by the large government sector make it even harder for community members to consider the possibility of understanding the extreme risk of starting a business.

Many entrepreneurial tribal members were attracted to employment within tribal government or tribal enterprises because of job security, pay scales, and benefit structures that no start-up business and few private sec-


tor businesses could hope to match. However, employment at Wildhorse and other tribal enterprises has provided opportunities for those tribal members to acquire operational and management skills, which they can later utilize in their own business. Enterprises also offer opportunities for spinoff small busi-nesses.

Despite the highly publicized unemploy-ment rate, the tribal economy is widely con-sidered by ctuir human resource managers to be at “full voluntary employment,” with a job available for any tribal member who is willing and able to work. Any government by its nature tends to be risk-averse and tribal government is no exception. Tribal govern-ment directly employs 266 tribal members, an estimated 46% of the tribal workforce and could be said to be inadvertently train-ing employees in anti-entrepreneurial work practices.

Starting a small business in a low-income rural area is challenging to begin with. Add in the relative ease, benefits, and job security available in the public sector, the lack of good information and experience about the private sector because of the predominance of the public sector, and it becomes clear that the 20+ tribal members who run their own busi-ness are very specially talented, dedicated, and hard-working individuals indeed.

4. Lessons from Other Native Business Enterprise Initiatives

This plan is sited within the context of renewed national interest in Native American and rural entrepreneurship. We have reviewed the work of a number of grantmakers and non-profits in Native American entrepreneurship and strive to incorporate best practices here.

ONABEN has been working with tribal busi-ness development centers as well as directly with tribal entrepreneurs for over 15 years. Primary lessons learned include:

Steady tribal leadership support for basic business assistance is crucial. Many tribes have opened business ser-vice centers only to close them after a few years of operation. Small business development is a long-term process and requires long-term commitment.Tribes, like other units of government, run hot and cold on small business de-velopment as a priority investment. This

a.

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makes the necessary long term commit-ment problematic.Tribes often have difficulty finding a “home” for entrepreneurship programs, vacillating between seeing the effort as education, economic development, career development, job creation. This creates problems for practitioners in gaining support. Selling the program as “job creation” is problematic because most small businesses create very few jobs. Selling the program as family stabiliza-tion, income augmentation, or poverty reduction makes the programs less desir-able to economic development advocates. Entrepreneurship or small business development (whatever you call it) can be all of these things and Indian country it is all of these things.Placing the programs within a tribal enterprise or economic development structure is more likely to create an entrepreneurial atmosphere within the program. Yet, no matter where the pro-gram is located, it is more important to have a business program manager who is a skilled counselor, coach, and advocate with meaningful business knowledge and experience.One reason for ctuir’s success has been its ability to attract and retain qualified staff. It can sometimes be a real struggle to find business assistance staff that has the right mix of business experience, cultural awareness, customer service focus, ability to survive within a highly politicized governmental environment, and dedication to a rural life. The cultural challenges to entrepreneur-ship are not to be overlooked, nor the opportunities brought by tribal culture. Just as a successful Native business has to find a way to integrate culture into business and business into culture, a suc-cessful tribal business service center has to articulate again and again why small business is so important to economic diversification and building family self-sufficiency indeed, tribal sovereignty.Use of culturally appropriate curriculum makes the education and counseling components of the program substantially more effective that using non-Native American materials and models.

OWEESTA Corporation, along with part-ners cfed and onaben introduced a new model for community economic development

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called Native Enterprise and Entrepreneurship Development (need). need is part of a com-prehensive training and technical assistance program designed to assist Native communi-ties with identifying the “ingredients” needed to develop entrepreneurs and enterprises and then provide them with a “recipe” for creat-ing an effective enterprise/entrepreneurship development system. Primary lessons learned from the need initiative include:

A thriving economy needs tribal enter-prises and tribal entrepreneursA well-developed native economy raises all members’ financial, educational, and esteem levelsNo one Native organization can develop an economyNative entrepreneurs face resource barri-ers that inhibit business success. Attend to your community (culture, development, infrastructure, and natural environment), local entrepreneurship climate and policy, tribal and social busi-ness sectors, entrepreneurship and enter-prise education and training, and access to capital financial (consider cdfis).

Social Enterprise Associates (sea) is a consulting firm that recently wrote a working paper entitled Small Business Incubation and Its Prospects in Indian Country. The paper examines the prospect of a small business incubation system being used in Native lands in order to further small business growth and sustainability. The paper identifies challenges to economic development in rural areas and highlights entrepreneurial development and incubation efforts in Indian Country:

RuralAreaChallengesThe majority of Native American tribes

are in rural areas in the U.S. As such, they are vulnerable to characteristics of rural economic development:

Low population density makes it difficult to build markets and workforcesRemoteness from transportation centers, raw materials, market activity, and finan-cial institutions are barriers to entry and cost disadvantagesPoor physical infrastructures, including transportation and utilities increase bar-riers for business Low education levels, skilled worker shortages, and lack of experienced man-agers increase entrepreneurial challenges. Existing jobs in the community – such as farming.

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NativeAmericanIncubationTodayThe rise of tribal-owned casinos has pre-

cipitated an increasing economic separation among tribes. Case studies below highlight tribal examples of small business incubation and economic development. Key factors in-clude:

Goodgovernanceandprofessionalbusinessmanagement

Tribes with higher numbers of member-owned businesses tend to exhibit separation of powers within the tribe, coupled with independent economic development organi-zations. There is also professional, industry experienced management leading business development efforts.

IncreaseincapitalaccessTribal communities are developing new

methods to unlock capital for Native entre-preneurs. These include peer-to-peer invest-ment schemes, tribal-managed funds, and education / outreach to outside investors.

CollaborationandnetworkingGiven many tribal communities face simi-

lar challenges, they benefit from networking entrepreneurial efforts and individuals. The greater business community is built upon social and professional networks. Tribal members need to develop these within the tribe, between tribes, and to the border com-munities. Tribal member owned businesses can purchase from each other, successful entrepreneurs can mentor younger entrants, and tribal governments can share best practice with one another.

Supportingtribalmember-ownedbusinesses

Historically, commercial focus on reserva-tions has been on tribal-owned businesses. Some tribes are fostering small businesses owned by individual members. Tribes, even poorer ones, have leverage to advance such ef-forts. Tribal government can dedicate resourc-es for small business development. Businesses can be supported through education for tribal members, as well as the population at large, to “buy Indian”. And, tribes can apply their own Tribal Employment Rights Office (tero), and create Indian preference and tribal member preference in employment, contracting and subcontracting.

Improvedlegalandregulatoryenvironments

Small businesses operate best in sound legal and regulatory environments. Good governance is universally desirable. Tribes accelerating small business development have clear bureaucracy processes, transparent operations, good customer service, and quick response time. Economic development efforts are increasingly addressed through separate legal entities independent from tribal council and operated by professional managers. Loan funds and access to capital are regular pro-grammatic components. And, many tribes are addressing other legal constraints to business with workarounds to make collateral available for lending and even changes to their charter to be more business friendly.

EducatingandenergizingentrepreneursGiven the lack of entrepreneurial suc-

cess rates in Indian Country, more support is needed to nurture the next generation of entrepreneurs. Tribal colleges are responding by honing their business education efforts. Off campus, tailored training curricula, such as the 12-week “Indianpreneurship” course of-fered by onaben, convey culturally appropri-ate entrepreneurship instruction of both hard and soft skills.

We have also reviewed models of small and rural business development from outside Indian Country, including entrepreneurial networks (Lyons and Liechtenstein), inten-sive business counseling/coaching (Sirolli), and youth entrepreneurship. Several projects based on these models are operating in rural Oregon and there are lessons to be learned from their experiences. Over time we will continue to stay active in Oregon’s rural and micro business provider networks to incorpo-rate best practices into our own work.

Finally, we learn as best we can directly from other tribes. For example, Hoopa has experienced a degree of success in business de-velopment following their adoption of a tribal corporate code that allows tribal members to form their own corporations. This approach underlines the value of government setting up solid infrastructure and then getting out of the way. Other tribes have experimented with more active participation in the private sector. Some tribes have actually bought tribal member businesses and retained the owner as an employee. This approach seems to bring the advantages of larger tribal enterprises into

service in growing small businesses. But in a highly charged political environment, this ap-proach also runs the risk of being perceived as favoritism or patronage.

5. Small Business Sector: Sum-mary of Challenges

ctuir has a strong Business Service Center that is recognized nationally as a role model, and tremendous tribal assets that could be di-rected to support the development of a strong private sector.

Yet relatively few businesses move from the planning to start-up stage or past the start-up stage. Tribal members still face additional bar-riers unique to the tribal historical experience that make entrepreneurship doubly challeng-ing. Tribal small businesses report attitudes that range from indifference to actual negativ-ity by community members who view small business ownership as part of the “non-Indian way.”

The tremendous imbalance in the size of the public and private sectors on the Res-ervation means that an attitude has grown up that the Tribe will develop and provide everything. The rapid growth in tribal govern-ment over the past 15 years has meant that tribal policy makers haven’t had the time to devote to determining what the best policies are for small business growth. There are much better opportunities on the Reservation for entrepreneurs than ever before, yet there is no coordinated tribal policy that prioritizes support for tribal small business. Given the lack of entrepreneurial role models in families, many tribal members lack even the exposure to the kind of round the clock effort it takes to keep a business running and have developed unrealistic expectations about success.

The gaming economy is a very vulnerable one, and it is widely recognized that ctuir has to diversify its economy to survive and prosper in the long run. Tribal small business ownership plays a central, if very long term, role in that diversification and survival effort. It is very important that the ctuir develop a long term vision and plan for the growth of the small business economy now precisely because these efforts will take so long to bear fruit. It is time for the Business Service Center to grow and deepen relationships with other tribal departments, attract outside resources, and expand entrepreneurship experiences for youth.

“Promoting business development and in particular, Indian entrepreneurs, in any Native


community can be challenging. However, one means of fostering the growth of Indian en-trepreneurs is getting your community ready or preparing your community to serve as a foundation for businesses to start, transac-tions to be fostered, and business enterprises to grow. Developing this foundation to restore the culture of entrepreneurialism requires commitment from tribal leaders, community and economic development specialists, busi-ness owners and organizations, and the com-munity at large.”

—Native Horizons: Restoring a Culture ofEntrepreneurship,Kauffman&Associates,Inc.

7. Strengthening the Small Business Economy Surveys

SummaryofStakeholderSurveys

1. How would you characterize the private sector on the reservation?

Most employment has been in the service sector and government. Retail is fledgling and in some cases is marginally perform-ing. Young, in its infancy stages. As the tribe develops its own economy there’s a place for tribal entrepreneurs. We’re getting to the point that it is because of the amount of services and money being pushed through. People give their business to Wal-Mart. Private sector is not visible to outsiders looking in

3. What is the biggest challenge tribal small businesses face?

Most responses focused on attitudes andabilities deeply rooted in social and historicalexperiences.

Discipline, ability to save, delayed gratifi-cation, and ability to sacrifice. All of those things occur in our communities but they tend not to be aimed at business.Small business takes a singular dedica-tion and requires a family commitment and willingness to risk everything. That’s an interesting behavior in Indian Coun-try because Indians have already lost everything. Beyond getting above poverty level, which you have to do before you can start a small business, there has to be a

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willingness to accept failure as part of the process.Mindset. Entrepreneurs have to have a tremendous sense of confidence in who they are. 200 years ago these tribes had a global economy. But the outside com-munity has done things that have really devastated traditional cultures and this has had a devastating impact on tribal identity. Lack of professionalism and lack of un-derstanding what business truly is. It’s not payday. We’re so into instant gratifi-cation. {People don’t understand that it’s} reinvesting in workforce, reinvesting in your company, saving for when it’s going to be a bad day.First as individuals, often they don’t un-derstand what it takes to operate, manage or develop a successful business. They don’t understand time, market, or their customers. They need to meet their com-mitments, honor their commitments; they have to provide a quality product. When they develop a small business what they really need to understand that the tribe is not their only client. They all think the tribe should just give the con-tracts but they have to really earn it. The perception that they won’t follow throughCourage to take the step to start a busi-ness, knowing you might fail. Lack of mentors

Financial,physical,andpolitical/legal infra-structurebarrierswerealsoidentified.

The tribe needs to create an environment that allows a private entrepreneur to succeed, an environment that also allows companies like Accenture or DaVita or others to succeed. Government needs to create a uniform commercial code and the necessary policies. We’re off to a good start with the industrial park, with Cay-use Technologies, and what we’re doing at Wildhorse. Financial and credit issues Wanting free commercial space Collateral issuesBusiness ideas are narrowly focused in scope, which makes financial viability difficult unless you are looking at a global market Money, education, location, opportunity

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4. In your experience, are there any public sector programs that are helpful for entrepreneurs? If so, please describe.

Yes, there are, but people don’t know what’s available or what they need until the last minute and then they need help right now. It’s like a doctor in an emer-gency room. bsc, sbdc, geodc, Small Business Man-agement program, bmcc, sba. I don’t think we’re doing anything that’s really helpful. If we would take the time that we put into courting a business {like Cayuse Technologies} into courting people who could be business leaders it would be a win- win.We held a lender fair with mortgage and commercial loan reps from banks. The purpose was to start a working relation-ship with a bank, so Native Americans would have a familiar face when they went into a bank. We would work on personal finance first and then business finance.

5. Are tribal entrepreneurs differ-ent from non-tribal entrepreneurs? If so, how?

Again,responsesfocusedonpersonal/social/historicalfactorsmoresothanthephysical/finan-cial/legalconstraintstribalentrepreneursface.

We have many of the same attributes as non-tribal entrepreneurs: the imagina-tion, creativity, ingenuity. The challenge lies in having perhaps some of our great-est genius stuck in addictive behaviors. Having wounded spirits is part of the problem. Our community infrastructure for sup-porting business (pride and loyalty to our community businesses) start-ups is lacking. Yes, because of culture. The work ethic is not bad but it’s way different. You can’t have a tribal member go out there and fail. That failure is a lot larger in this community. They’re not going to take that step very easily unless they know there’s going to be successful. Fail-ure is huge because you’ve got everybody that’s invested in you. Tribal entrepreneurs have expectations from family members that non-tribal entrepreneurs might not have. Expecta-tions for jobs and financial assistance,

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and family members that don’t under-stand business. Yes, they are different. I think that tribal entrepreneurs throughout Indian Coun-try aren’t as aggressive and need to be nurtured a little bit. They have to develop an understanding of the world outside the reservation.They perceive questions as barriers rather than things they need to take a look at. You throw a question up and they view it as a wall. Trust land challenges are different.

6. What’s the single most useful thing tribal government could do to strengthen the private sector on the reservation?

Social/Cultural InfrastructureCelebrate successes. Provide ongoing business education to adults and high school students Have strong non-profits & community infrastructure - that’s the core for small business to build on. Understand that small business start up is a very long process with a steep learn-ing slope. There has to be some tolerance about learning and making mistakes that we don’t have right now. Start piece-work type businesses that tribal members can learn work ethic and professionalism in. So much work ethic has been lost: “Now we’re two generations out and the workforce has nothing except “You owe me” and instant gratification. That makes it harder now. It can be done but it’s a whole lot of work. You’ll have to partner with {ctuir} Workforce and let them make the mistakes and let them learn.”

Political/ Legal (Good Governance) Keep paying attention to this issue like we have been - don’t let it slip.Minimize government bureaucracy.Get the tribal leaders on board to pro-mote small business development, show a pro- small business attitude, and en-courage tribal members to take classes & utilize Business Service Center. Use opportunities created by tribal gov-ernment creatively. For example, when recruiting businesses into Coyote Busi-ness Park, recognize that that’s an oppor-tunity for tribal entrepreneurs to provide services (landscaping, maintenance, etc.)

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Set opportunities up so entrepreneurs can grow into them a little at a time, real-istically, rather than requiring big jumps in capacity and investment. It’s hard for ctuir to remember this because we’re running monopolies. Expand options for home-based busi-nesses, don’t put up so many barriers (zoning). Give the same kind of assistance to small businesses that staff has given to ctuir-owned business. Set up a plan center that is also a business support/ service center (graphic design, copying, scanning/ faxing, bookkeeping, etc.) Stay out of it. If you fund it, it has to be fair across the board. Let people start smoke shops like on every other Reservation. Yes it’s a dirty business but it lets people learn to run a business. It might take a couple genera-tions but that’s how long it takes. ctuir should buy or start businesses and let tribal members learn to run them and then buy them. The main thing is to understand the dif-ferences between public sector economy and private economy. We need to create an environment that will allow both to flourish. Leadership needs to understand what an economy is and what it takes for that economy to succeed.Educate tribal council. Most councils and leadership are laypeople who don’t un-derstand the flow of money in the com-munity or how direct and indirect jobs are created by money flowing through the reservation.Start making private sector a priority. Take money from economic development and put into community development. Support them by purchasing product/service offered by tribal business owners and enterprises.

Physical Infrastructure Provide an incubator facility.

Financial Infrastructure Financial literacy. First you have to create wealth, and then manage it. Setting aside land for tribal entrepreneurs to use as collateral for business loansProvide an incentive to get service-ori-ented businesses started. You need more service-sector businesses because they’re the foundation for retail and everything

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else, but right now there’s no physical place to locate them. Provide opportunities for locating busi-nesses on reservation & provide incen-tives (e.g. matching grants).

7. How can you tell if we have suc-cessful enterprise/entrepreneurship development environment? What should it look like?

It might look fairly informal: Flea markets, bazaars, yard sales. More vendors in Yellowhawk, Longhouse an-nex. Things start in ways that don’t look like small business at first. It might look like a community garden or selling log furniture out of their garage or someone holding a yard sale every weekend that is really a second hand store. These are the sparks that show the beginnings of communal thinking. It shows that spark. While you may get some storefront busi-nesses you’ve got a lot more subterranean things going on too. Challenge that people think business is retail. A lot of things aren’t retail but help us grow.

People would be investing in the community in lots of ways:

Tribal members with college degrees could return home and find jobs – not just in government but also in the private sector. The enrollment at Nixyaawii would in-crease. People would be moving into the com-munity & building homes.

It might look like more retail businesses and more business programs:

To see four to six or more entrepreneurs that have storefront entrances and are doing well as a businessWe would see expanded business coun-seling, additional revolving loan funds, grant programs and internships. Tribal government would be investing in infrastructure to promote development. It should be a team effort with private sector.Utilize the property at Wildhorse Resort Casino, availability of commercial space

Indian employment is a measure of success: Mission Market is our largest indicator. And not having as many brown faces as I’d like down there tells a big story on its own. The casino the same thing.

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8. Can the reservation support a private sector?

Interestingly, people said both yes and no. Probably the answer depends on what the intended market is: on-Reservation (neighbor-hood retail), Regional (highway commercial and beyond), Global…

Yes: Of course… we have a global market through the Internet. Yes, definitely! Opportunities exist for small businesses. There are examples of towns like Leavenworth that market themselves effectively. Yes, I do. And I think they could be the owners of it too. Yes. Our neighborhood or community is close to 800-1600 people, and with some good management, good philosophy, good business acumen, they can thrive, and as the Reservation economy develops and as people look beyond, people can be successful with larger than neighborhood retail facilities. They need to look beyond Reservation, not just to Pendleton but looking at sba 8a certifications which broadens their appeal to state, local, federal agencies. There are a lot of busi-nesses operating under that model in Indian Country.It would look like a miniature town/ru-ral community. I have no doubt that the Mission community could become a town.

No: Don’t think we have a large enough pop-ulation base. There’s a certain amount of perhaps naive thinking [that has come with the new casino wealth, thinking that we can do or build anything here] without an understanding of finance. The Mission community is not large enough to become a thriving town with all the amenities that entails.

9. Is there a skilled workforce to support the private sector on the reservation?

Workforce is recognized as a challenge both on and off-Reservation, but particularly chal-lenging on-Reservation:

No. There’s a lowly skilled to semi-skilled workforce, and what skills we have we haven’t inventoried.

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There could be a larger skilled workforce, but there are workers with retail, techni-cal and service experience. Workforce is the biggest challenge for all small businesses on or off Reservation- skilled, unskilled, everything. People steal employees from competitors. Small businesses have to compensate to attract employees by offering flexibility, learning opportunities, employee recognition. Our workforce today doesn’t have the work ethic, they don’t have the gumption, they don’t have the fine hand-work detail skills {that previous generations of tribal members had}. It’s just not here anymore. Can it be there? I would hope in my heart that it would. But it’s not there now be-cause it doesn’t have to be.Even at Tribal Government we are having trouble filling jobs, many tribal members between the ages of 30 & 50 don’t want to work. Those who moved away and came back to the reservation got jobs; those who have never left are the ones who struggle to work.

10. Do you have any experience with business incubators? If so, please describe.

This question in some cases turned into, “Should we start an incubator?”

Yes, it should be a priority and it will succeed: Developing one on reservation should be a priority. The challenge will be establish-ing a framework (policies) in which they operate and monitoring when a client is ready to graduate and move out on their own. If we allow an incubator to be built on Wildhorse or Coyote North that makes a lot of sense because of the amount of people we pull into that area. Wildhorse alone pulls over 650,000. The odds are really good for entrepreneurs located in an incubator to succeed and bring in additional people. We’re getting close to that point as people develop Arrowhead, the business park, and as more and more people will be getting off at this intersec-tion. But it has to be visible and has to be marketed right.

Yes, at some point, but we’re not ready yet: There are not a lot of people who have worked long enough yet at high enough levels of income that throw off enough cash to start a small business. In 5-10

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years we’ll have much more fertile ground [for small business startup]. Then in-cubation will be one stop shopping for accounting and those services. So the time when we will be riper for this is approaching but we don’t know how far off it is.

Business incubation is very challenging: It’s a balancing act. How much you can staff up the services depends on how suc-cessful the businesses are. Ultimately it’s challenging as businesses grow, services have to grow with them. You can’t grow too soon or you’ll cripple them with your costs.The problem with the business incubator is that the business owner doesn’t have to risk everything, and you need that risk ready mindset if you’re going to make it.Incubators are “sterile boxes” where tribal extended families might not be welcome due to neighboring incubator businesses. This is inconsistent with tribal culture which is all about extended families and integration of work and family.

11. What is the role of the techni-cal assistance provider/ (or small business counselor) in identifying markets for clients? In your experi-ence does that help a client? What’s the most effective way for technical assistance providers to help clients identify market opportunities?

The consensus answer was to stay away from this role.

Help the entrepreneurs learn how to ask the right questions. No. If you do it for them and the market shifts they don’t know how to respond. You’ve got to walk it, talk it, and breathe it. Counselors should not direct a client to a particular type of business or do market research for them. The Business Service Center (bsc) doesn’t have adequate staffing to do the market research for clients and it would not do them good anyway. Clients should do the research. The learning process should be experienced by the clients since it will be their business and they need to understand the industry and market. Everything is the client’s responsibil-ity. You don’t do anything for them. If

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you can’t do the legwork now then you shouldn’t be getting into this. It would be a mistake for any one of us to identify markets for that group. If we did, then it would become our problem.

12. Do you have any experience with peer counseling and/or other networking programs?

I helped start a mentoring program through the sbdc in Montana. Clients would meet quarterly with mentors. Clients were required to serve as a men-tor after being in business for two years. I learned that you don’t have to have identical matches for a mentor and client (they can operate different businesses)

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13. How can the tribal community build support around tribal entre-preneurs?

Certainly encouragement, an attitude of encouragement and hopefulness. A pa-tience and acceptance of mistakes, which does not mean not forbearance but an understanding that mistakes will go by as part of learning A loyalty to spending their money. It’s tough with service or light industrial to talk about how to do that. A willingness to try new things, new industries, new jobs. Support for youth entrepreneurial things would be great.

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Well it would be just like we did with Mission Market: buy at home first. And give discounts. They have to be in busi-nesses that we need- consumables.The obvious answer is to spending money with the entrepreneurs and to speak highly of them. The community won’t embrace the entrepreneur until the entrepreneur has shown that they really understand their business and provide a quality product at a good price. It won’t come overnight. They’ll try them out once. If they feel they’ll not getting a good price or quality of service they’ll go elsewhere. Stories in cuj.

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Business Service Center CTUIR Department of Economic and Community Development

“…entrepreneurs have a very special role in Indian Country. They are the bridge from the past to the future.”

—Tom Hampson, Executive Director, ONABEN

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