Welcome to Draft violation — a blog series that dives into the unique business challenges and opportunities of underrepresented business owners and entrepreneurs. Learn how they developed or expanded their businesses, explored entrepreneurial ventures within their companies, or created side hustles, and how their stories can inspire and inform your success.
For many domestic entrepreneurs, it is not active discrimination that proves the biggest problem in starting a business. Actually, for recently Draft violation In a HubSpot Blog survey, many natives don’t feel like their heritage in one way or another in their entrepreneurial challenges.
Instead, generational disadvantages follow past discrimination, such as a chronic lack of credit and access to capital, alongside new issues such as discoverability and scalability.
Unfortunately, these challenges can present significant obstacles to entrepreneurs and business people who want to achieve success. But they survived.
I reached out to local and indigenous entrepreneurs to hear their firsthand take on these challenges and ask for their advice on how to rise above and overcome them. Here’s what they had to say.
The biggest challenges facing domestic and autochthonous entrepreneurs
Respondents in the survey I mentioned above were asked to name their top three challenges.
About 56 percent of respondents pointed to financial issues such as raising capital or budgeting, while 33 percent cited business growth and expansion as the main problem.
Finally, getting the word out and raising awareness was a problem for 24 percent of respondents.
1. Financial challenges
The financial challenges make sense, he says Heather Fleming (Navajo), executive director for Tuba City, Arizona-based business incubator Change Labs.
Fleming’s program works closely with Navajo and Hopi entrepreneurs to refine and grow their businesses. She sees these challenges participants face firsthand — many of them symptoms of larger problems, such as infrastructure problems and a chronic lack of access to credit in Indian country.
“Financial challenges like securing capital is a long-term issue, just because of the way the country is structured. You can’t use it as collateral if it’s a reservation because it’s federally owned,” Fleming said.
“When we talk about scaling — there’s a particular challenge for a lot of people because of the move to e-commerce. I was just reading our annual report and many members talked about the lack of reliable internet. How do you develop a business if everything is confined to your home and your internet reliability is not great?”
Lack of access to credit is often exacerbated by exclusion from the otherwise well-intentioned financial programs of major banks across the country. Chad Johnson (Cherokee), founder and president of farm logistics company The Akana Group, pointed to the lack of such programs at financial institutions across the country.
Due to a combination of the aforementioned land laws and a lack of generational wealth, credit in Indian Country is a different beast — and without specialized financing programs, that means indigenous entrepreneurs are missing out, Johnson said.
“There are these big boys, and they have these programs, but they are not there for the natives,” Johnson said. “Financial institutions are really struggling with access to credit for domestic entrepreneurs.”
There are resources, such as Community Development Financial Institutions (CDFIs), that are often tailored to the Indigenous communities they serve. But funding for seed CDFIs is limited — and once a business owner reaches a certain point, microloans won’t cover the costs of scaling, Johnson said.
For example, Akana Group has partnered with agricultural equipment manufacturer John Deere to get equipment into the hands of domestic manufacturers and has begun doing business internationally for other projects. That means scaling far beyond the coverage capacity of many domestic CDFIs, Johnson said.
“There’s a gap missing between ‘I’m a startup’ and ‘I need a $10 million line of credit,'” Johnson said. “Where do natives go when they need a $10 million loan?”
2. Getting the word out and raising awareness
Then there’s marketing. Justin Quis Quis (San Pasqual Band of Mission Indians) runs Sacred Bev, a beverage company in California. Quis Quis says that marketing is a complex thing that requires a lot of focus and long-term vision to make it happen.
He pointed to the initial marketing efforts for his company’s product – a set of functional drinks using indigenous ingredients – as an expensive failure.
“I’ve already been through a marketing agency across the country and it didn’t help me at all,” Quis Quis said. “I spent a lot of money and it didn’t do anything.”
To get the word out and build awareness, Quis Quis suggests using marketing, focusing on your product, starting small and working smart.
He has since returned to selling his drink locally, working to find distributors and build success from there. He has just ordered his fourth batch of 20,000 cans of his product.
His advice on marketing and securing investors is to develop a long-term vision for the product or service and focus as much as possible on its uniqueness.
“Marketing is a necessary evil,” said Quis Quis. “You just have to be careful which way you go. Be realistic with your ideas and don’t spend a ton of money to get started. It’s easy to get caught up in something that looks big and means you’re getting big. Be prudent.”
Fleming said it can be difficult to stay on top of marketing trends while managing all the other aspects of starting a business. Instead, she recommended finding marketing blogs or podcasts that could do some of the work to keep messages as trending as possible.
Fleming said it’s also a good idea to find other Natives to work with when marketing Native products or services. Change Labs has had a lot of success when it pairs its program participants with native graphic designers, for example, because they are more likely to understand the needs and vision of another native.
Her third big piece of advice was to become proficient with digital tools. She watched as many business owners struggled to transition to e-commerce during the COVID-19 outbreak as flea markets and art shows closed.
Aspiring entrepreneurs should familiarize themselves with programs like Canva, which can help design logos and visual messages, and artificial intelligence tools like ChatGPT.
“We hear a lot of people say things like, ‘I don’t know what I want to say,'” Fleming said. “Now you have all these tools that can help you do that – you can extract the underlying message and then you can put it into ChatGPT and it can help you clean it up. There’s no excuse for bad copy when you have tools like these now.”
3. Growth and scaling
Let’s say the marketing efforts are paying off and it’s time to grow. That means increasing production, delivery logistics or access to services — and that means money, Quis Quis and Fleming said.
Fleming looked back at the internet connection. Large parts of the Navajo reservation are offline due to scattered physical infrastructure like signal towers and fiber optic lines.
Running an online business from your local library or coworking space is one thing, but aiming to make a living usually means expanding that idea.
That means consistent connectivity, which can mean anything from a hotspot to a Starlink modem, which can cost around $500. Small improvements like these can create huge growth for businesses expanding into new markets.
But even with a successful side business, many natives, who are among the poorest demographics in the United States, won’t have that $500 for a unit, stifling their growth.
That’s where places like the Change Lab can come in, Fleming said. The organization offers participants loans after completing the workshops and other activities as part of the annual group.
“I think it’s crucial that we do that. Access to just a little money would improve their ability to participate in e-commerce,” Fleming said. “I think when you’re a business owner, it’s easy to overlook how important it is to have access to credit or financing to grow your business.”
However, Quis Quis said access to credit is key to achieving anything with growth. It goes back to marketing: being able to pitch a product or service to investors or lenders as something that can scale. Putting together a solid business plan and a clear vision can make that process much easier.
“Money is competitive,” Quis Quis said. “You need a really good financial plan to make yourself attractive to investors and to have that plan as firmly in place as possible.”
Appreciate the small victories, because they are hard to come by.
As uphill as indigenous entrepreneurship can be, the results can be incredible. As a business journalist, I followed the stories of people stepping up and starting to build wealth for their families and communities.
For example, I first shared a profile for Johnson’s Akana Group long before their first forays into international trade missions and overseas affairs.
But achieving that goal requires patience and persistence, says Quis Quis.
“You have to have that long-term vision – there’s no overnight success. It’s not meant to be discouraging, I’m just saying that it takes determination and the ability to see down the road,” Quis Quis said. “There’s a lot of good stuff out there, but you’re going to go through a meat grinder to find it. If you get it that reality, you can fight through it and succeed.”
There are resources for Indigenous entrepreneurs at almost every step of their journey: tribal grants for people just starting out, incubators for people hoping to learn where to go next, and financial institutions for taking bigger steps into bigger finance.
While there are gaps and available resources have a long way to go, seeing what is available is always a good first step.
Johnson said one of those resources should be mentoring and networking with other local businesses. It’s easy to feel separate and isolated, but working with other local businesses can help find solutions to problems that are sometimes uniquely indigenous.
“When I talk to other indigenous business owners, I say, you’re not going through anything that’s unique to you,” Johnson said. “We have to come together and show up for each other. That’s a big part of it.”
https://blog.hubspot.com/marketing/native-entrepreneur-challenges
