Five Keys to Tribal Business Development Success

Tribal economic development is more crucial than ever for Indian Country’s self-determination, self-reliance and sustainability.  Pressures on Gaming revenues due to competition, changing compacts and State and Federal regulations, are increasing.  A changing Federal Administration in 2017 suggests, at minimum, an uncertain future in federal dollars and programs.  As a result of these factors, and many others, Indian Country must increasingly become economically creative, innovative, self-sufficient…and decisive.

I have been “beating this drum” for almost five years now as (formerly) Chief Business & Economic Development Officer for a large Oklahoma Tribe; at national and regional NCAIED RES events, at various Federal and State Forums and Conferences in D.C., and one-on-one with Tribal leaders across the country.  My work on the economic strategies and business models for three different Tribal Promise Zones over the last four years, including the assembly of over 100 private and public, domestic and international, partners for multiple Tribes, has further validated both the opportunities in business development and the risks of inaction.  I am increasingly optimistic about the future ahead for Indian Country, but at the same time, I see many missed opportunities right now.  The penalty for missed opportunity is, best case, delayed progress and, worst case, Tribal economic decline.  This is a tragedy that must be averted.

The “engine” behind economic development and job growth is business…new, accelerated, expanded, optimized and leveraged business.  Tribes must simultaneously take advantage of, and fully exploit, as many of the following business “eco-systems” as possible.  These include goods and services where…

1. Customers and businesses are both on reservation – this is where Tribal members have businesses that are desired and needed by other members (e.g. c-store, car wash, dry cleaner, restaurant, Farm-to-Table, etc.). Wherever possible, Tribal entrepreneurs and small business owners must be encouraged, inspired, developed and supported.  Tribes must strive to meet their own business needs with their own business people wherever possible!
2. Customers passing through the reservation on their way to somewhere else interact with reservation businesses – this is where members’ goods and services are offered to highway passers-by in such a compelling way that buyers make an impulsive stop, or better yet, plan their stop ahead of time. Business examples are travel plazas, truck stops, small scale gaming, restaurants, fast-food, various retail, etc.
3. Customers make advance plans to come to the reservation (aka Tourism) and enjoy the offerings of reservation businesses – this is where Tribal goods and services have a compelling draw and (hopefully) a reputation for customer service, operational excellence, value, variety, etc., and where length of engagement (aka stay) is increasingly extended. Examples are gaming, sports and recreation, competitions, cultural events, genealogy research, historical pilgrimages, various retail, etc.  This eco-system is one of the most powerful, because it also feeds the previous two eco-systems!
4. Customers are off-reservation (nearby towns or cities) yet are provided goods and services by reservation businesses – this is where market research and testing determines what others want and need to buy and these are provided by reservation businesses. Examples are franchise retail, manufacturing and distribution, agri-business products, consumer products, homemade goods, arts and crafts, etc.  Here also, Tribal entrepreneurs and small business owners must be encouraged, inspired, developed and supported. 
5. Customers are national or international and are offered goods and services by reservation businesses via eCommerce and social media – this strategy leverages technology to dramatically extend the “reach” of Tribal businesses and make irrelevant the limitation of business location. The opportunities here include phone-bank customer service and support, tech support, call center, outbound marketing, order fulfillment, travel agency, computer programming, distance learning and training, online gaming (if legalized), etc.

Each of the above eco-systems has its own unique opportunities and challenges, but each should be carefully examined and a strategic plan developed to address the associated possibilities of each.  A few of the Tribes I have worked with are well on their way to building out all five of these eco-systems, however, these Tribes are the exception.  Many other Tribes ignore one or more of these…..to their detriment.

One final word about access to capital, resources, expertise, training, etc. to implement these eco-systems…DON’T LET THESE PERCEIVED BARRIERS DISCOURAGE OR DISSUADE YOU!  There are more financial and human resources available to help than you may currently realize.  The next step is to get a vision for all business possibilities, evaluate every business opportunity, develop a business plan and take action!  Failing to plan is planning to fail!  This too is a tragedy.

Tribal Economic Development Elements

(Posting to LinkedIn Tribal Economic Development Group)

Please allow me to introduce myself.  I am new to this Tribal Economic Development Group and I have enjoyed reading each of the comments and perspectives on this subject posted by others. I am a business strategist and serial entrepreneur with 9 companies under my belt (1 NASDAQ IPO) and a successful business consultancy spanning 4 different countries. Following are some of my own thoughts on this important topic:

1- Gaming - is an awesome profit generator that should be leveraged to the max, but it WILL decline at some rate TBD over the next 10-15 yrs. Gaming should therefore be considered "a bridge to diversification and sustainability." The length of the "bridge" depends on many factors. Don't be surprised like Atlantic City!  Now is the time for tribes to plan and act on business diversification.

2- Planning - each tribe is different so strategic economic planning is absolutely critical path. "If you fail to plan you plan to fail." Every tribe can benefit significantly from an outside perspective here. Tribal insiders oftentimes have limited and/or politically impacted viewpoints.  Not bad, but simply a fact.

3- Leadership - developing transformational leaders must be a high priority for every tribe. There is simply no substitute for "transformational" leadership. Most traditional leadership training is ineffective. “Only three things happen naturally in organizations: friction, confusion & under-performance.  Everything else requires leadership.” -Peter Drucker.  Nations, tribes, governments and companies rise and fall on leadership.

4- Entrepreneurship - every tribe should have a formal business development plan that includes small business incubation and acceleration.  I am a member of the NBIA(.org) and there are plenty of resources available. You simply cannot ignore the stimulation of organic business growth inside the tribe.

5- Operational Effectiveness - to be fully effective, business & economic development must be separated from tribal government. They are simply totally different “engines” for the tribe. I know of a billion dollar tribe that is stifled completely by the unyielding mix of these two together, so their tribe is only realizing a tiny fraction of their awesome potential.

6- Economic Development - means effectively exploiting your (many) tribal advantages and meeting your tribal people where they are. I know of a tribe whose annual revenue is $850K/year, but their people are living in abject poverty.

7- Possibilities - following are some things I believe every tribe should carefully consider and evaluate:

a- The leverage to the max of ALL natural resources.  Obvious, but often overlooked with respect to possibilities.

b- Agri-business (Farm-to-Table/Product)(full value chain)(greenhouses, aqua/hydroponics, etc.).  There are also great opportunities in Agri-Tourism. Tribes must leverage their agrarian roots in some form with modern technology and all available other advantages.

c- Genuine, culturally sensitive and relevant tourism. Why do I know that this is likely underdeveloped? The largest and most influential tourism consultancy in the country, perhaps the world, had never worked with a Tribal Nation before I hired them for a project a year ago.

d- Highway Retail (Travel Plazas, Truck Stops, C-Stores). Yes, there are a lot of tribes that own and run these however, are they producing 12-18% EBITDA? This is possible under the right conditions & structure. I am aware of a tribe with a C-Store generating $12M+ revenue annually and losing $200K in the same time period.  This is a tragedy and easily fixed.

e- Artrepreneurship.  Tribal artists in every discipline should be increasingly successful as entrepreneurs and there are sophisticated ways to help them be so. I work with a company in Dallas that literally built an entire art community with local artists using technology and advanced retail strategies. One single location has 7,000 pieces of art from 140 different artists.

f- Federal “Promise Zone”-The US Government has a brand new program (USDA administered) to provide unprecedented economic development dollars to tribal nations (and other under-served areas) and the 2nd round RFP comes out in August of this year.  The Choctaw Nation is currently the only Tribal Nation in the country with this designation.

I can go on and on about leveraging EB5, FTZs, NMTCs, CDFI, IEC, IIP, SBA Loans, Crowd-Funding, etc., but in the interest of brevity, I will stop here.  Bottom line...tribal nations have lots of opportunity and I am very bullish on their (your) futures.