What are the obstacles to business start-up?

Aboriginal entrepreneurs have told us that the obstacles they encountered when trying to start up a business on reserve were often impossible to overcome. We interviewed both successful and unsuccessful entrepreneurs. We heard the same stories in each of the communities we visited.

There was often a lack of business start-up information and support. They could not find information on business incorpo- ration and organization, building a business plan, or financing their business. They said there was no one to guide them through the process, and if they were assisted with the start-up process, there was no continuing support or long-term “after- care.”

Entrepreneurs also said they felt left out of “the loop” and disconnected from business networks and people who would have inside information.

They identified a lack of encouragement from the band office and community members. They said how hard it was to know what the band administration would support and what start-up processes they were expected to follow. They also despaired at the unwillingness of community members to encourage or support Native businesses. If they did achieve business success it was not uncommon to be resented by other members.

The Skeena Native Development Society has documented that starting a business on reserve is over three times as complex as off reserve. The reason for the slow business start-up on reserve in Canada is because it has to involve the band and Indian and Northern Affairs Canada.

Small business is risky at the best of times, but trying to start up a business on reserve can be next to impossible. On the Navajo reservation in Arizona it takes two years to get the approvals to start a business, and in the nearby off-reservation town of Flagstaff, you can complete the paper work and be approved within ten working days.

Obstacles
1.    There is difficulty finding business support information on specific topics.
2.    Once businesses start, funding agencies and service providers ignore their continuing needs.
3.    Aboriginal entrepreneurs are not in “the loop” - not connected to business circles - and therefore miss out on important information. There is a need to build capacity among service provider workers.
4.    Web-based service delivery has many obstacles and few shortcuts to improved information services for many Aboriginal entrepreneurs.
5.    There needs to be increased sensitivity to and support of under-served areas, the East Kootenays being one such region.
6.    There is a need for more sensitivity towards Aboriginal culture, and the unique challenges faced by Aboriginal entrepreneurs must be recognized and strengthened.
7.    Cooperation and coordination between service providers and government agencies and between providers and government agencies is fragmented and inadequate.

Recommendations:
1.    Improve awareness and distribution of existing business information tools, and develop and modify additional tools.
2.    Improve services for businesses after they have been established (“aftercare”), preferably on a continuing basis throughout the life of the business.
3.    Develop vehicles and processes that will facilitate formal and informal business networks at local and regional levels.
4.    Invest in building capacity of service provider personnel to ensure quality service.

Read the Full Study

The Simon Fraser University/Western Diversification Gap Study, 2001, identified barriers and made recommendations.
Obstacles:
Vodden, Miller and McBride, Assessing the Business Information Needs of Aboriginal Entrepreneurs in British Columbia, Burnaby: Simon Fraser University, January 2001. See “History of Barriers” in Appendix.
McBride, John, Our Own Vision: Our Own Plan, Vancouver: Community Economic Development Centre, Simon Fraser University, 2001 page 62.

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