Monica Simeon: Building Sustainable Economies: The Story of Sister Sky
Simeon, Monica. "Building Sustainable Economies: The Story of Sister Sky." Emerging Leaders seminar. Native Nations Institute for Leadership, Management, and Policy, University of Arizona. Tucson, Arizona. March 25, 2010. Presentation.
"We've been in business since 1999 and we have three full-time employees and four tribal youth employees -- between four and six. Really our company mission is to create natural bath and body care products inspired by Native American herbal wisdom. So the core of our products are liquids like body lotion, shampoo, conditioner and body wash. Our niche market is the Native American resort and spa industries, but we've really improved our business model to also launch the product mainstream in national markets as well as international markets.
Our product philosophy: anything we bring to market must be founded in Native American herbal wisdom or cultural sharing. That truly is what makes our product line stand out. We have three product categories. We have the hotel amenity category, which we sell all the shampoos, conditioners and lotions to Native American hotels. We have the spa category, so we also manufacture and make all the spa products -- the massage lotions, the massage oils. And then we have the retail both domestic and international, full-size products that we sell to natural markets like Whole Foods and Trader Joe's. And there's a real big natural product category now that Sister Sky, our company and our brand, is really poised to go after.
Company values: I just want to go over them very quickly, because it really does speak to the reason why we choose to operate our facility, our manufacturing facility in our own community. Cultural sharing is a big part of our company value in terms of what we...anything we bring to market must embrace the beauty or the heritage of Native American culture as a universal value. So instead of making products like lavender or peach, we're going to infuse sweet grass into the product, we're going to tell the story of sweet grass, we're going to wrap that story around the bottle -- the product label -- and we're going to bring it to market in a way we think and we believe that we share part of our culture in an honorable and respectful manner. Seven generations, we're very firmly founded in responsible business practices. So that's a universal Native American value in terms of what I do today does not just affect me, but future seven generations.
Positive economic impact: we are firmly committed to contributing to the positive economic impact by sourcing and buying supplies and goods from other Native entrepreneurs. So really that is what we can do in our role as business leaders is to buy from other Native companies. But the last is business leadership. We really truly believe positive social change can happen in our communities through business leadership, through business ownership. I think as we see more community-based businesses built we see the shift. We see those community-based businesses start chambers on their reservation, be a resource for one another, and that truly is business leadership that will really create such a positive ripple in our communities.
The operation: the core of our company is in the manufacturing and distribution of our products. Now in 2007 we moved our manufacturing facility from a rented clean-room facility in Spokane, Washington, back to our reservation. And that was firmly, firmly rooted in the fact that we value economic development and we value business leadership within our own community. We maintain quality control, scheduling and capacity by operating our own manufacturing facility. Just to touch on what Martin was saying was that it's very important to be able to deliver, it's very important to know your business, but it's very important to perform and we understood that. So we took the big leap and said we're going to build, we're going to fully invest in this company, and we're going to build on our reservation, because this was something that we weren't doing for a hobby but that we were actually going to make a living at.
Now the nuts and bolts of what we do: This is our manufacturing process. We mix, fill, pack all of the products in our clean-room facility so our equipment includes a 600-gallon mixing tank, a four-head piston filler, automated capper and labeling machine. And there's some of the equipment that we have in our facility. Our capability: again, touching on the fact that when you fully invest in a manufacturing facility, you have to be able to deliver. You actually have to be able to have the capacity to do all of this and the capability. So when we invested in our facility, we needed to make sure that we controlled the production scheduling [because] when a customer needs a product they actually need it, right. We needed to have product quality control, the integrity of the products. We needed to be flexible. We needed to own the facility, which would help us create products that maybe were more ideally suited to some of our customers -- maybe a tribe wanted a specific formula or maybe they wanted their own logo on the product -- so being able to own the manufacturing facility allowed us to really be in a position to grow the company and be flexible. But beyond all that, we had to be responsible and reliable because it is extremely important that our community-based businesses understand that. That is the first rule of business -- you have to be able to deliver.
Our capacity, our production capacity is 25,000 gallons per month. We produce, our output is about 60,000 one-ounce units per minute. Our shipping capacity is [22,000] cases per week for 88,000 cases per month. It was really important for us to be able to run all these numbers because our scenario says this is how much business we can handle; this is how we're poised to grow. So again, capacity and capability was important for us as a community-based business to invest in so that we could be more competitive, but that we could really go after some contracts and get them.
Our current distribution: we have literally started our company in the niche market in Indian Country. By that, we were making all the shampoos and conditioners and lotions to service Native American resorts. We really believe that to be our best opportunity, and it really did put us in a position where we had enough sales to where we could actually invest in the company. So we identified early on a niche market that we served. But by being able to invest in our facility, we set our sights on, okay, let's launch the brand nationally and internationally and that's where we stand today. But it's really important for us to be able to identify that initial niche market and it really was about how are we going to capitalize or how are we going to really get into the "˜Native-to-Native,' "˜Buy Native'-type initiative so that we can grow and support our business beyond just our reservation boundaries.
So with us investing in our manufacturing facility we really see, as an entrepreneur, a lot of growth potential. So we now have the capacity with all of this bulk...equipment from the mixing tank to the filling to the labeling and the capping, we have the opportunity to go after bulk contracting, government contracting, 8A-type status. International trade right now is very big, so we're doing a lot domestically to send products overseas. Now we have capacity to do that and these products are all being made on our reservation. So it's very appealing to foreign retail markets as well. We have the ability to do private label. So we're currently MBE certified and it's a real similar certification program that was discussed earlier, but through that there are actual corporations that are very interested in doing business with companies like Sister Sky. So large corporations like Target that are interested in saying, 'We'd like to give you a contract to do a private label bulk filling.' So with what we've invested in our facility in our own community we have potential to do that so we see a lot of growth.
Okay, this is the last part that I really think really touches on what we're talking about here, which is what are the benefits, what have we seen at Sister Sky, what are the benefits of building a reservation-based business? Well, there are two really critical certifications that we leveraged, which is the HUBZone [Historically Underutilized Business Zones] manufacture. We are a HUBZone manufacturer. There are a lot of corporations and there are a lot of government contracts out there that exist, set-asides for HUBZone manufacturers. Every reservation is a HUBZone, so that's to our benefit as a manufacturer. One other certification that we applied for and received having a product made on the reservation was the Made by American Indian seal. And what that is that's through the Intertribal Ag [Agriculture] Council. What that does for us as a commercial product is it really helps distinguish our product line as something unique and something authentic. There are tax advantages obviously. We don't have any state, city or county business and operating taxes. And when you start a business there's a lot of challenges, there's a lot of little fees, there's a lot of taxes. So any opportunity that you have to improve your cash flow by not necessary paying those because you're out of those...you're not located within those areas, that's definitely a benefit. We've had the opportunity to train tribal youth and this is a really exciting thing because we're very proud of the tribal youth that come to work in our facility but it also is a huge benefit for a small business to have extra hands, to have people help you, to be part of that process is a win/win situation as a small business.
The program opportunities like the BIA [Bureau of Indian Affairs] loan guarantee, that was critical for us in 2000. We did move our facility in 2007 to the reservation, but we had to really invest a lot of money in that so we went through the BIA loan guarantee program because a conventional bank, we wouldn't qualify for a conventional bank loan. We were a company that had a lot of potential, identified a great niche market but we didn't have receivables to prove that we were going to be able to go after that type of loan.
One thing I just wanted to touch on really briefly was the Made by American Indians because I think that's certainly a very valuable certification that community-based businesses or even tribal-based businesses. If you're making a product on a reservation, get it certified Made by American Indians. It really helps consumers identify authentic products, but it helps differentiate and in a marketplace where there are so many options and there are so many, there's so much competition, anyway that you can differentiate a product, an agriculture product, a commercial product, this is a great seal to do that. And this is through the Intertribal Ag [Agriculture] Council. Initially it was used for jewelry but now as our businesses are, and we're diversifying our economies in our communities, there are a lot of opportunity to use this certification and we do. We put it on all of the bottles that we make. So it is something that... and I've had the opportunity to, as I'm launching the business brand nationally, when I go to National Natural Products Expo West Show and I tell the story of Made by American Indians, consumers are real receptive to that. They're receptive because Made by American Indians truly is our domestic free trade or fair trade type of certification. So we do, consumers in this country do a lot to support maybe coffee beans grown in South America, what are we doing to support our own communities and building wealth in those communities? So it's a great certification, I just wanted to touch on that briefly.
Challenges of a reservation-based business: there's a definite lack of infrastructure where I'm from. Things simple as wireless, telecommunications, three-phase power; these are certainly challenges that we face. There's huge transportation and logistics -- freight, UPS, FedEx. We had one giant order go out last summer and it was...it's kind of something that we really, maybe a lot of mainstream businesses don't experience, but we had three pallets that was going to one hotel for their opening and we had no problem manufacturing it, but we would not be able to run these pallets into Spokane to get them on the shipping dock. So we had called around and found a freight company to come into these muddy roads to pull up into our little facility and get them all out. So it was an exciting time, but it was a challenging time and those are the real concerns of at least us, Sister Sky, and where we're located. Some reservation businesses or community-based businesses may have a small customer base or market size, so what that really does is put their potential revenue limited based on are they serving the community, are they only serving the reservation community, are they serving surrounding communities, are they providing a product or service that is based on business hours so I know some ideas of some concessions or some type of lunch type service. So really that could be a potential challenge. We ourselves reach out to a large national Native American market so we can certainly pencil out potential market share, but if we were limited just to our area I could literally see how we would definitely be limited.
Lack of business support: there is a lack of business support where I'm located. There's not a lot of community entrepreneurs so there's not a lot of opportunity to network, there's not a lot of opportunity for chambers or training or resources, in my area. That doesn't mean that I as a business don't have outside resources, maybe the local SBA or maybe the National Center [for American Indian Enterprise Development] or some of the other American Indian chambers. But it certainly, for starting a business, is definitely a challenge because those resources often are not right there in our own community.
The positive impact of reservation entrepreneurs: I think role modeling is certainly the absolute top. When there are citizen entrepreneurs, when there are community-based businesses, it really has the ability to inspire other tribal members who may be considering going into business. Role modeling is key. It puts it in our own communities where we can see we can actually do this, we can be empowered, we can have an idea, we can figure it out, somebody else did it. Those things for the entrepreneurial spirit really do go a long way. Training, like I mentioned, we do tribal youth employment, we do training for tribal youth, but we've also done training for other tribal members who have come to work in our facility, and that's truly a positive benefit for our community in terms of allowing members to see business in action and that's very positive.
Building wealth in our communities: we create jobs. We are about sustainability, we're about economic diversification. Truly we need to build...to build wealth in our own communities through business leadership, we have every opportunity to address our own needs, solve our own problems and be really part of positive community development. And business leadership, this is something that I am very, very passionate about. Oftentimes in our tribal communities, we have political leadership but where is our business leadership? Many times in cities or in towns, coalition of business people have come together to create positive change, to build parks, to start charities. This is something that I think as we shift with Indian gaming as a great $26 billion industry and we think about sustainability and diversification, we have every opportunity as Indian people to build business leadership in our communities and the synergy between business leadership and political leadership will really contribute to positive community development. That's extremely important.
I wanted to talk a little bit about our tribal youth employees. These are some pictures of some of the tribal youth that we employ. What I'm proud about in what we do is that we bring tribal youth ages 14 to 17 to work at our manufacturing facility. And there's something very powerful about creating an entrepreneurial spirit at a very young age and in our facility, which is a manufacturing facility, our tribal youth see an actual process. So they see a product being made, a product being shipped, a product being packaged and there's a tremendous sense of accomplishment in that. And we think creating an entrepreneurial spirit at a young age is very positive. We had a 15-year-old tribal member who was helping, he was working and we were packing an order for Miccosukee Tribe in Miami, Florida. And again, I'm located, our reservation is located in rural Ford, Washington. So we're 45 miles north of Spokane, very isolated area in terms of not being close to any urban area. But we were packing this order to Miccosukee and the product, those little bottles were coming off the line and he was packing them and getting them into this box and he looked at the label and it had the Miccosukee logo label on it and he's like, "˜Miccosukee. Miccosukee tribe, where are they?' And I said, "˜Miccosukee tribe is in Miami, Florida.' He said, "˜There are Indians in Miami, Florida?' I said, "˜Yes, there are. There are Indians all over.' But what we do is we open their eyes to a larger world. We open their eyes to potential. They get to see...there was tremendous pride. He said, "˜Wow, so this is all shipping down to Miami, Florida?' 'Yes, from one corner to another,' and it is truly, truly a tremendous and a very empowering process for us as business people to witness that.
How do we create a positive environment for reservation entrepreneurs? I think early outreach. There's some examples from Salt River that are doing early outreach, training camps, those types of things. There's also something called the ABIL Chapter, which is www.abil.org, enable American Indian business leaders. These are youth that are being groomed right now to own their own companies, who are writing business plans, who are part of a network of future Native American business leaders. It's very exciting. "˜Buying Native.' And I love that I get to follow up because these were all the things that they were doing -- setting procurement goals, policies, outreach efforts. I think this is tremendous. I don't know what kind of outreach efforts that some tribes are doing but set up a day where you're just going over a two-hour orientation to how do community businesses do business with the tribe? I think that's important. Mentoring programs for prime contractors and large contractors. There could be an opportunity, there could be plenty of opportunities, especially with the construction that's going on in Indian Country, with mentoring some of your community-based businesses. You may have a large prime, but what are some of the other opportunities that exist from there, and maybe they're not real big at first but maybe they're something that is manageable that may not need a lot of capital investment. But how are we creating that synergy between our prime contractors and some of our community-based businesses?
The last is very, very important: set goals, measure results and report success. We have to move in a direction, we have to start somewhere, we have to have some policy, we have to have some program, or we will continue to just talk about "˜Buying Native' or "˜Native-to-Native' or the importance of turning the dollar in Indian Country, but I think we need to create that environment. And trust me, we would if we could -- Native businesses -- but we're not the leadership component. And the leadership component is truly what's going to drive "˜Native-to-Native' or "˜Buy Native' or turning the dollar in Indian Country. And it's the leadership component that's going to create the environment to help foster those community-based businesses."