Disablers: factors that exert a negative influence on success

1 Business relationship constraints

Foley37 argues that both overt and covert discrimination pose a significant problem for Indigenous Australians in business and the wider arena. Almost all of the businesses in his study experienced racial discrimination at some time. This occurred in dealings with suppliers, creditors and customers.

A city-based Koori business manager38 was quoted as saying that Indigenous business people are:

…walking into a world of prejudice and stereotypes which is so out of whack with the notion of Aboriginal people being successful entrepreneurs…They had to walk into a world which is replete with stereotypes that created all sorts of problems for the business itself: in terms of its relationship with suppliers…credibility within marketing and gaining a profile within their industry sector, it's very difficult.

All of our interviewees felt that instances of racial discrimination make it more difficult to build a successful business. One reaction to this perception was that Indigenous business owners saw little or no value in promoting or associating their business with Indigenous branding, labelling or association (unless it is a cultural-type business, such as tourism or arts) as they felt it may adversely affect their business.

Many Indigenous small business owners also felt that using non-Indigenous accountants and business mentors provided greater credibility and internal security.39

Two examples of Indigenous business owners illustrate the difficulties they faced with racial discrimination.

Example: The 'Spanish' tiler

In a large regional town in New South Wales (NSW), a tiler of 20 years' experience decided to 'get off the tools' and open a retail outlet for tiles in the town to supply both the trade and the general public. After all, he had amassed plenty of contacts and specialist knowledge of tiles. Most people he dealt with thought he was Spanish.

The shop opened and traded well. Then a 'success' story got in the local media and mentioned that he was Indigenous. This was news to many and the repercussions were almost immediate with a decline in wholesale and retail customers. Within three months, his suppliers decreased the credit terms from 90 days to seven days. His business credit limit was also reduced.

The tiler consulted his business mentor and decided to trade through the hard times by shifting his focus to Indigenous corporations and land councils nationally. His local business has never picked up to the level it was prior to the publishing of the success story.

Example: The small business award winner

A panel beater in New South Wales was encouraged to apply for a small business award based on the success of his business. He went on to win the award. The resulting publicity highlighted the fact that he was Indigenous, which was unknown to his customers and clients. They thought he was of Indian descent.

After the publicity, he found that his terms of trade and credit facilities were downgraded. He went from 120 days' term with his key supplier - a large multinational paint manufacturer - down to 90 days. Within three months, it became 'cash on delivery'.

He had a very tough 18 months post the award and business has never reached the pre-award levels.

2 Lack of business networks

Business networks are important avenues for business advice and increased access to suppliers and customers.40 For example, many researchers attribute the economic success of the overseas Chinese in Southeast Asia and elsewhere to a unique network that facilitates information sharing and provides access to ready credit.41

The business networks of Indigenous Australian business owners are not well developed: especially when compared to successful migrants.42

An interviewee tells the story of a successful Chinese businessman who used his knowledge and networks to diversify from a restaurant to retailing and wholesaling. He first established a Chinese restaurant in a major city, then started to supply produce to other Chinese restaurants. He eventually opened a produce stall and subsequently also established a seafood importing business.

In comparison, 'Indigenous businesses have not even gotten past first stage'.43

An Indigenous business manager44 explained that setting up a business is often something that has never happened in the family, unlike many other racial groups. There is no experience that can be drawn on for pitfalls.

Foley and Hunter45 contrast the Australian experience with New Zealand, where even urban or entrepreneurial Maori, in the absence of support from traditional social networks, create their own networks and develop new forms of social institutions. The communal interaction of Maori with family members and their wider community are survival mechanisms that have fine-tuned the concept of 'networking' so that when Maori enter business, 'business networking' is an extension of their existing skills in the interaction with whanau (family) and hapu (sub-tribe).

3 Culture of obligatory sharing

Another key 'disabler' to business success is a culture of obligatory sharing. According to an Indigenous accountant46:

This is the custom of sharing everything you have with your family. This is an aspect of Indigenous culture that often works counter to entrepreneurialism. Other members of the family don't understand the requirements of a business to have working capital and to build an asset base.

If you work hard and earn a car or a nice house, your family expect that they can use it as they wish.

Studies of urban Aboriginal communities over the past thirty years are replete with examples of the ethos of sharing and generosity. Aboriginal people are, in general, protected by and benefit greatly from the generosity of members of broad-ranging kinship systems. Expectations relate to the sharing of shelter, food, cash and other resources.47

However, particular individuals sometimes abuse the generosity of others.48 Some interviewees referred to this practice as 'humbugging', defined as 'to make a nuisance of oneself' (Aboriginal English).49

One example is an Indigenous couple who opened a convenience store in Brisbane. Indigenous customers (not limited to family) came and took goods without paying. They could not make a profit and eventually closed the shop.50

Some individuals are able to put in place strategies to manage this. For example, a mining company advises Indigenous staff to open two bank accounts and put 20% of their pay in one and 80% in the other. The worker takes the 20% card home (the 'humbug card') for their family to use and is able to protect the rest of their income.

    Last modified: 18 Nov 2009QC 22397