Difficulties of Starting a Small Business on an Indian Reservation in America
Question
I need a paper about the difficulties of starting a small business on an indian reservation in america. I would like the following areas of covered: lack of access to capital, land use issues, and the role tribal government plays in small business development. Please note we are talking about native americans, not people from india.


Solution
Difficulties of Starting a Small Business on an Indian
Reservation in America
Starting a business is often a
challenging issue for virtually everyone around the world except for when the
business owner has some prior experience in the domain, they are doing
business. They need to have some business and managerial skills for the course
to be manageable in the venture. It is hard for new business entrants to start
small and even harder when they have additional issues to deal with (Darwin et al., 2020).
Therefore, starting a new business on an Indian Reservation in the United
States can be challenging. Besides navigating the challenges normal businesses
experience, they also have to deal with potential discrimination in their
businesses if they are small. The challenges faced when starting a small
business on an Indian Reservation, like capital limitations, land use policies
and the role of the tribal government in the venture, among others, are
discussed in this essay.
Business and Economic Difficulties
Indian reservations operate the same
way as other reservations in the country, as tribal governments are
interdependent on the outside world. They decide how to use the resources at
their disposal. The biggest challenges faced when starting new small businesses
are associated with the reservations’ ways of life and economies (Leonard, Parker, & Anderson,
2020). Issues of how the land is used on Indian reservations, their
economic indices, lack of capital and financing options, experience, and
collaborations are the bottlenecks one must navigate to open and successfully
run a small business.
Land Use
Issues
Most reservations are located in
rural areas, resulting in more land use. Agriculture and natural resources are
the most common land use on Indian Reservations in the US. It limits them to
the lines of businesses aligned with the land uses. Starting a small business
outside the mainland use on a reservation is mostly resistant unless there is a
collective decision. Resistance is a significant problem that monopolizes the
business potential. People interested in starting small and unique businesses
in these locations mostly experience more challenges than those in line with
the land use (Crepelle,
2019). Some of the tribal leaders on reservations may also oppose new
businesses to stay conservative.
Inadequate
Capital and Poverty
The Native Indians living on
reservations in the United States have limited resources to support new small
businesses. They have more issues to deal with, and limited resources make it
hard to deal with them. Some of the people living on reservations lead a life
of poverty, and the reservations are dedicated to handling more pressing
issues. External financing of ventures on Indian reservations is complicated (Jernigan et al., 2020).
Except for expansive ventures and big businesses, financial institutions avoid
the risk and barely fund small businesses that are started on reservations. The
legal framework of the federal government is aligned with supporting
minorities, but it has not been very effective for Indian reservations.
Institutions set up to support Indian Natives are effective but have limited
funds.
Inadequate
Experience, Networks and Mentors
Native Americans living on Indian
reservations have for so long been isolated. They also live a way of life that
conforms with the land use of the reservation and the culture of the people.
These are the experiences they have grown up in and thus very limited exposure
to the outside world. It makes it extremely hard for occupants of the reservations
to start a new small business because they lack experience in it. Business
insights are generated from historical and current data. The lack of historical
data for business on some Indian reservations means it is difficult to exploit
superior tools and strategies like business intelligence and business process
management. Inadequate education for Natives does not make it better. Lacking
experience and education make it even harder to start and run a business
successfully.
Collaborations and strategic partnerships
are hard to strike unless there is an existing relationship between a
reservation or its administration and external entities. The same applies to
businesses; the avenues for collaboration are limited on reservations due to
isolation from the outside world. It, therefore, becomes hard to start a small
business in such an environment because it is unconducive. The conservative
nature of tribal governments and lack of prior experience in business means
that reservations have less knowledgeable and insightful people (St-Jean, Radu-Lefebvre &
Mathieu, 2018). A lack of these people means there is limited knowledge
to guide new business owners and translates to more unknowns for those looking
to start new small businesses.
Social and Geographic Challenges
Indian Reservations are legally
designated settlements for Indians who live in the United States as Natives (Waapalaneexkweew &
Dodge‐Francis, 2018). Most reservations are located in the rural US and
often have a given level of isolation from their surroundings due to
differences emanating from their sovereignty. It is common for there to be gaps
as the structure of tribal governments is not as extensive as that of the
federal government.
Confluence
of Traditional and Contemporary
Tribal governments advocate for the
practice and preservation of cultures of Natives in the reservations. Most
inhabitants on the reservations are stuck in these traditional practices that
hinder the adoption of a contemporary lifestyle. Some leaderships of tribal
governments are so conservative that they do not embrace diversity in culture.
The inadequacy of cultural diversity directly translates to a limited ability
to interact with others. The inadequacy of diversity or lack thereof hampers
its suitability to external parties, visitors and potential business partners (De Bruin & Mataira, 2018).
The people living in the neighboring regions are less likely to do business
with businesses on reservations. It limits the potential consumers of products
and services to those living on the reservations.
Discrimination
and Oppression
People who live on Indian
reservations are often minority groups that choose to live per their ways.
Minority groups in the US are often victims of discrimination either directly
or indirectly. Discrimination against businesses owned by minority groups also
exists in Indian reservations. External business entities often take advantage
of business partners who are on reservations. They are aware that the
businesses need consumers of their products for them to grow. Some external
businesses that partner with those on reservations systematically discriminate
against them on supply chains and directly oppress them by overpricing inputs
that reservations need. Remote and isolated Indian reservations can’t start a
small business due to the inadequacy of customers and consumers or lack
thereof.
Isolated
Geography
The geographic location(s) of some
Indian reservations put them at a disadvantage when doing business. It is very
difficult for reservations located in remote rural areas to get customers
beyond those who already inhabit the location. Inadequate infrastructure to
access the rural areas where businesses can be started makes it extremely
difficult to operate. There will most likely be problems in transportation to
those areas if they are remote. If the reservations are accessible, businesses
struggle to cover transportation costs, which are often high (Aalbers, 2018). Location
challenges limit the business to reservations and make it extremely difficult
to do business with the outside world.
Lack of
Education
Some reservations have lower
literacy indices than their neighboring regions. Differences in the
administrative and academic policies on the reservations and the outside world
are the main cause of the lower literacy amongst inhabitants of the
reservations. Few people get the chance to get better education outside, and
even then, they are absorbed by the outside due to the existence of ready
greener pastures. The brain drain leaves very few people with business acumen
and an ability to deal with external businesses. There are few successful
tribal governments in the US as it is difficult to stop the brain drain.
Leaving less educated and less fortunate individuals on the limits of the
Indian reservation their business potential, which effectively makes it hard to
start small businesses on an Indian reservation.
Administrative and Governance Challenges
All Indian Reservations in the US
govern themselves and are recognized as independent sovereignties by the federal
and state authorities. That directly means they can carry out administrative
and governance duties. The lack of experience in progressive administration in
the reservations makes them vulnerable to the challenges they face. The
structure of government, legal frameworks, risks, regulation and policies made
by tribal governments are some of the main challenges this section addresses.
Indian Native Americans recognized
by the US government can operate all activities in the reservations. A legal
framework defines this arrangement for tribal governments in the country.
Government structure variations in the reservations make it harder to
coordinate operations to open small businesses. The United States government is
against oppression and discrimination, but the minority groups still experience
it. These vices are systemic and ingrained in the structure available to
support the operations on reservations.
Inadequacy of resources has made it
extremely hard to tread the red tape and bureaucracy involved in collaborations.
In some cases, the entire legal framework supposed to support reservations
fails and leaves the Natives on their own. It is hard to start a business with
that many uncertainties, especially if they involve the party supposed to
support the business. The same applies to policies that differ from one
reservation to the next. It is hard to find common ground in the policies for
collaborations to be stricken with governments on reservations due to their
variances.
It becomes extremely hard for the
federal government to coordinate engagements with the reservations considering
there are 574 tribal governments in the United States. The low business
potential of reservations renders them a high risk for investments. Banks and
financial institutions would rather not engage in partnerships when risks are
high. The federal government has tried to restructure its approaches on
engagements and financing of ventures, but there remains a gap. The regulations
and policies formulated by the federal government to promote the financing of
ventures in minority groups have also not been as effective as desired. This is
due to policy variations and the higher risks for financing Indian Natives on
reservations hence the hardships encountered in venture financing for to start
small businesses.
References
Aalbers,
M. B. (2018). Financial geography I: Geographies of tax. Progress in Human Geography, 42(6),
916-927.
Crepelle,
A. (2019). Decolonizing Reservation Economies: Returning to Private Enterprise
and Trade. J. Bus. Entrepreneurship &
L., 12, 413.
Darwin,
S., Chesbrough, H., Bez, S. M., De Marco, C. E., & Cobben, D. (2020,
February). Opening Up for Managing Business and Societal Challenges. World Open
Innovation Conference.
De
Bruin, A., & Mataira, P. (2018). Indigenous entrepreneurship. In Entrepreneurship: New perspectives in a
global age (pp. 169-184). Routledge.
Jernigan,
V. B. B., D’Amico, E. J., Duran, B., & Buchwald, D. (2020). Multilevel and
community-level interventions with Native Americans: Challenges and
opportunities. Prevention Science, 21(1), 65-73.
Leonard,
B., Parker, D. P., & Anderson, T. L. (2020). Land quality, land rights, and
indigenous poverty. Journal of
Development Economics, 143,
102435.
St-Jean,
E., Radu-Lefebvre, M., & Mathieu, C. (2018). Can less be more? Mentoring
functions, learning goal orientation, and novice entrepreneurs’ self-efficacy. International Journal of Entrepreneurial Behavior
& Research.
Waapalaneexkweew
(Nicole Bowman, Mohican/Lunaape), & Dodge‐Francis, C. (2018). Culturally
responsive Indigenous evaluation and tribal governments: Understanding the
relationship. New Directions for
Evaluation, 2018(159), 17-31.



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