Small Business Development Centers in Indian Country: Exploring access to a vital resource

A robust ecosystem of small businesses plays a key role in healthy local economies. Small businesses create jobs, provide goods and services that match local preferences, and invest in their communities. But starting or growing a small business can be daunting—requiring skills and support in a range of areas from finance to marketing. For tribal communities, knowing whether local entrepreneurs have the assistance they need to start and maintain successful businesses can be complex. Considerations include the types of services available—which might be a constellation of programs, tools, and funding opportunities—and their quality, accessibility, and fit with local needs.

To shed light on the extent to which Indian Country entrepreneurs have access to small business assistance, we explored proximity to one key resource: the nationwide network of Small Business Development Centers (SBDCs). Even in the age of virtual learning, physical proximity to small business services is important, especially given the Internet-service gaps Indian Country faces. Research on other services in Indian Country also supports the importance of geographic proximity and cultural context in understanding and meeting the unique needs of Native communities.

We explored geographic proximity to SBDCs by mapping driving times from the locations of political entities representing Native communities—specifically, entities that are federally recognized tribes or Native Hawaiian Organizations (NHOs)—to the nearest local SBDC. In the absence of location information for all small businesses in Indian Country, we used the physical addresses of the headquarters of these political entities (hereafter referred to as “Native entities”) as a proxy for Indian Country small business communities.

Our analysis shows that many Indian Country entrepreneurs face long drives to access SBDC services in person despite the comprehensiveness of the SBDC network. This is particularly the case in rural areas. At a time when federal program expansions and new program pilots provide opportunities to explore alternative service models, understanding gaps in the current system of small business services can yield actionable insights to better support Indian Country entrepreneurs.

A primary resource for small businesses

SBDCs provide a range of services to help small businesses start and succeed. These include free business consulting, low-cost training, and a variety of technical supports, such as business planning, access to capital, marketing, and regulatory compliance. The program operates as a public-private partnership supported by the U.S. Small Business Administration (SBA), with 69 SBA district offices overseeing more than 800 local sites that deliver SBDC services. America’s SBDC—the association representing the nationwide network of SBDCs—reports substantial positive impacts on business financing, start-ups, and job creation.

SBDCs’ locations are influenced by their funding structure. Federal funding from the SBA covers 50 percent or less of SBDC operating costs in a given state, so other sponsors are needed. These sponsors, which also often serve as physical locations for SBDCs, might be universities, colleges, state economic development agencies, or private partners—often found in larger towns and cities. An SBDC based in a population center might serve a large region, including surrounding rural communities. As part of our analysis, we calculated that only 30 percent of SBDCs in the United States are located in rural counties, compared to 67 percent of Native entities.

In Indian Country, the SBDC network complements and works in partnership with other small business service providers, including local, regional, and national Native organizations.

“The SBDC network is a key partner for our work and the businesses and entrepreneurs we serve,” said Chris James, president and CEO of the National Center for American Indian Enterprise Development and a Center for Indian Country Development (CICD) Leadership Council member. “This is particularly true for ensuring that the communities we serve are aware of the services and opportunities available to them. Partners like SBDC are key to disseminating this invaluable information.”

Proximity of SBDCs to Indian Country

Using address data for individual SBDCs and Native entities, we calculated round-trip drive times for Indian Country business owners to access the nearest SBDC. Results are shown in Figure 1 below. As might be expected, access looks different across the 48 contiguous states, Alaska, and Hawaii. A common theme, however, is the considerable geographic-access challenges many small business owners and would-be entrepreneurs in Indian Country face in visiting an SBDC in person.

The 48 contiguous states. In the 48 contiguous states, driving to the nearest SBDC takes more than one hour round-trip from the locations of just over two-thirds (65 percent) of Native entities. From the locations of just over a quarter (28 percent) of Native entities, round-trip drive time is over two hours. On average, it takes one hour and 38 minutes round-trip to drive from a Native entity headquarters in the 48 contiguous states to the nearest SBDC, with a median drive time of one hour and 19 minutes.

Rural areas. Entrepreneurs in rural counties—where two out of three Native entities are located—face especially long drives to SBDCs. Round-trip drive times exceed one hour from 81 percent of Native entities located in rural counties of the 48 contiguous states and two hours from 39 percent. The average drive time in these rural areas reaches just over two hours (121 minutes) round-trip, with a median of one hour and 44 minutes. For individuals hoping to start or grow a business, drive times in rural areas, and in the 48 contiguous states overall, may often represent potentially prohibitive commitments of time and resources.

Alaska. In Alaska, where remote communities may not be connected by roads, SBDCs are inaccessible by car from 71 percent of Native entities (villages and tribes) in the state. From another 21 percent, traveling to the nearest SBDC requires a more than two-hour round-trip drive. This means that only 8 percent of Alaska Native village and tribe locations are within a two-hour round-trip drive of an SBDC.

Hawaii. Access in Hawaii varies by island, but driving times are shorter on average than in the 48 contiguous states and Alaska. From 36 percent of Hawaii-based NHOs, the round-trip drive to an SBDC exceeds one hour, and from another 6 percent driving is not possible. The remaining 58 percent lie within a one-hour round-trip drive of an SBDC. Average and median drive times are about equal at 49 and 50 minutes, respectively.

Co-locating services with Native institutions

One way to bring SBDC services closer to Indian Country could be co-locating services within the ecosystem of existing Native-focused institutions. Given Native institutions’ connections to their communities, a co-location model could help ensure that services match local context and needs. Co-locating SBDC services with Native institutions would also expand access for communities adjoining Indian Country, particularly in rural settings.

As a thought exercise to explore the potential impact of co-location, we mapped driving times from Native entities to several types of Native-focused institutions that have the potential to serve as SBDC partners. Native institutions represented in our analysis—and for which the needed data were available—included tribal colleges and universities, Native American Financial Institutions, Alaska Native Regional Corporation headquarters, and Alaska Native Regional Non-Profit Organization headquarters. Co-location may of course not be desirable or practical in every case, but this hypothetical scenario provides a starting point for exploration.

The 48 contiguous states. In this thought exercise, driving times improve for Indian Country entrepreneurs overall. As shown in Figure 2, the share of Native entities in the 48 contiguous states within a 30-minute round-trip drive of an SBDC more than doubles, increasing from 14 percent to 31 percent. The share facing a potentially daunting round trip of two hours or more is reduced by a third, falling from 28 percent to 19 percent. Round-trip drives exceed one hour for half (47 percent) of Native entities in the 48 contiguous states rather than the current two-thirds (65 percent), and median round-trip drive time falls by nearly a third, decreasing from one hour and 19 minutes to 56 minutes.

Rural areas. For some communities in rural areas of the 48 contiguous states, the shifts in a co-location scenario are even more appreciable. In these rural settings, the share of Native entities within a half-hour round-trip drive of a potentially co-located SBDC more than triples, jumping from 9 percent to 32 percent. The share facing more than a two-hour round-trip drive drops by a third, from 39 percent to 26 percent. The long median round-trip drive time declines by nearly a third, falling from one hour and 44 minutes to one hour and 12 minutes.

Alaska and Hawaii. As shown in Figure 3, the co-location scenario also improves overall drive times in Hawaii and in some areas of Alaska, though has little impact on access from many remote Alaska Native villages. Still, there are cases in Alaska where the co-location scenario moves SBDC services from being inaccessible by car to being only a short drive away.

Other considerations in Indian Country service delivery

Geographic proximity is one consideration in Indian Country small business service delivery, but of course not the only one. The importance of physical proximity hinges on the extent to which services can be accessed online and the relative importance of accessing certain types of services in person. The extent to which in-person, off-site trainings offered by existing SBDCs meet the needs of remote geographies also remains a question. More research is needed to understand these issues, but previous CICD work on Internet-service gaps suggests the importance of in-person access.

In Indian Country, the contextual fit of service delivery also matters. Across sectors, Native entrepreneurs experience unique circumstances that may affect their small business service and training needs. For example, access to credit and financial services is a key challenge Indian Country faces. On reservations, businesses navigate a unique legal and regulatory context. Native small business owners may also hold cultural values that are reflected in their business philosophies or feel more confident discussing business plans in a setting familiar to or affiliated with their community. The extent to which SBDC services currently match local context and training needs was outside the scope of this analysis, but co-locating services in Native institutions may be one way to ensure a strong fit between services and communities and is an area for potential research.

Studying new service-delivery models

While more work needs to be done to understand how best to support small businesses in Indian Country, there are opportunities to pilot and study new approaches. For example, recent federal program expansions may open new opportunities for small business service providers to collaborate with Native institutions. In the American Rescue Plan Act of 2021, Congress allocated additional funding to expand technical assistance programs for traditionally underserved communities. The SBA announced Community Navigator Pilot Program grants to help seven Native American-serving organizations provide community-level training and technical assistance for Native American small businesses and entrepreneurs across the country. The pilot offers an opportunity to evaluate alternative service models such as partnerships between SBDCs and Native institutions.

We can also learn from existing efforts to explore new models of service delivery in Indian Country. For example, the SBA has partnered with Native technical assistance programs. Tribes have also created their own programs, such as the Great Lakes Inter-Tribal Council’s Small Business Technical Assistance Program, and lessons from those programs could be gathered for broad benefit.

Studying how different service-delivery models affect access to and experience with small business assistance can provide vital information to help small business assistance programs truly go the distance for Indian Country.

Appendix: About the data

All data sources reflect information available as of September 2022. Latitude and longitude for all addresses were obtained through Google Maps’ Geocoding API. Driving times and distances were obtained through Google Maps’ Distance Matrix API.

Native entities. The physical locations of federally recognized Native political entities serve as rough proxies for the Native communities they represent. Our analysis included all 574 entities listed in the Federal Register (with 584 physical addresses as listed in the Bureau of Indian Affairs’ Tribal Leaders Directory), as well as the 118 Native Hawaiian Organizations registered with the Office of Native Hawaiian Relations.

Native institutions. We compiled the physical addresses of the 12 extant Alaska Native Regional Corporations from their websites and information available from the Alaska Department of Commerce, and compiled the addresses of the 11 Alaska Native Regional Nonprofits similarly. Native American Financial Institutions’ locations (82 in total) come from CICD’s Mapping Native American Financial Institutions tool. We compiled addresses of tribal colleges and universities (56 in total) manually from web sources, including the American Indian Higher Education Consortium and the U.S. Department of Education.

SBDCs. We compiled SBDCs’ physical addresses (819 in total) from a web-based search tool offered by the SBA. Because SBA district offices (69 in total) are responsible for program administration and may not physically host client-facing SBDC services, they are not included as service sites in this analysis.

Rural classification. County-level rural and non-rural classifications come from the U.S. Health Resources and Services Administration Federal Office of Rural Health Policy’s Non-Metro Counties data file. We included a county as rural if it contains no non-rural census tracts. Because Native entity locations are used as proxies for broader communities, we used the county level (rather than the tract level) to assign rural status to addresses.