Everyone knows that diversification has become a crucial building block for modern tribal economies. And as the fastest growing population in the United States, the need for meaningful jobs and multiple revenue streams has never been more important for Native communities.
But sometimes, what may look like a “great deal” at the start may become a drain on precious resources with hidden expenses and liabilities that no one foresaw when deciding to invest. It happens all the time.
Whether your tribe is located near an urban area, or remote with few natural resources, there are four key questions to consider when looking at diversification/due diligence options.
First: Is the project a good cultural fit? A Tribe’s culture and core values might argue strongly against engaging in economic activities that contradict or endanger its culture and values. Conversely, there may be particular advantages to a Tribe’s location, culture or traditional practices that they would like to leverage economically.
Second: Is it a growth industry? This is a simple initial screen that provides some macroeconomic development cushion to any project a tribe is considering. Diversifying into industries that are expanding as a whole will have a higher likelihood of succeeding in the overall economy, especially if the industry is a growth industry in the surrounding local economy.
Third: Does the Tribe have the resources, capabilities and bandwidth? Simply put, this consists of the skills that a tribe currently has – through its leaders, employees and potential employees. Whether it is accounting, marketing, management, financing, public relations or even public policy, most tribes with gaming enterprises have cultivated a strong reservoir of skill sets that can be leveraged and transitioned into other related businesses.
Fourth: Consider your competitive advantage. Your Tribe may access to water rights, for example, where water rights carry substantial value. The “use it or lose it” provision with respect to those rights means that the Tribe may be heavily incentivized to put to use as much of its available water as possible to ensure that those rights were retained for future generations, while at the same time building your economy.
Once your tribe has considered its options regarding cultural fit, industry growth and existing tribal capabilities and competitive advantage, it’s important to remember that as sovereign nations and business owners that the due diligence and work you put in at the beginning of a project will not only pay off in the long run, but also has the potential to create long-term job growth for generations to come.
If your Tribe is looking at potential investments, or saving/restructuring current investments that aren’t producing the desired results, Blue Stone Strategy Group can help.
Our team of national experts and proven methods can help sort through the details and provide fact-based information to guide your decision-making process toward the best outcome for your businesses.
Call us today at 949-476-8828 or email us at info@bluestonestrategy.com to schedule an appointment to discuss whether a potential business opportunity is right for your tribe.