Small firms can make big bucks on campaigns

With the 2004 elections less than a year away, political campaigns around the country represent a great opportunity for small businesses.

Working with a political campaign can give a small company quite a boost, bringing in cash on a short-term basis, and also enabling it to make contacts and win future business beyond the campaign itself. It can be a great way for companies such as caterers, printers, high-tech providers and consulting firms to get wider exposure for their products and services.

Jon Clark, president of Palm Tree Promotions Inc. in Port Charlotte, Fla., said working with political campaigns has helped his marketing consultancy win new customers. That’s important because "I rely a tremendous amount on referrals for new business," he said.

Getting business with a campaign takes some networking, but it’s the kind of networking a small business owner should be doing anyhow.

"Even if you have no political connections, you can pay attention to the community calendar, go to Chamber of Commerce events," said Steve Watts, CEO of Bold Approach Inc., a Boise, Idaho, business and marketing consulting firm that also works with campaigns.

Curtis McClees, president of WinningConceptsUSA Inc., an Orange Park, Fla., consulting firm, did some political volunteer work and got himself known in the community. Orders from campaigns followed.

"You have to build your credentials somehow," he said. "You don’t just start a business and say, ‘I’m going to get into the political consulting business. There’s a lot of legwork that goes on beforehand."

Cold-calling campaigns and their workers is another way to land their business.

Veterans of campaign business say it can be very lucrative. Although the work tends to be seasonal, McClees says political campaigns account for about 40 percent of his company’s overall revenue.

There is a possible downside — the fact that some candidates never get around to paying their bills. But business owners who do political work say there are ways to avoid this pitfall.

"Most of the time, most of the political items have to be paid for upfront," McClees said. "You’re gambling if you decide to let things go."

Clark said his company typically requires campaigns to pay at least partially in advance for orders over $500.

Watts noted that some candidates are likely to be better at paying their bills — for example, incumbents. It makes sense to try to get their business first.

"The last thing they want is that kind of reputation," as someone who doesn’t pay up, Watts said. Moreover, "they’re much better funded. They typically start with a good cash reserve, they have a budget to begin with, it’s easier for them to raise money and they have a much better chance of getting re-elected."

Watts also suggests business owners insist on payment by credit card when they’re working with a particular campaign for the first time. That way, the risk of loss falls on the card issuer, not the small business.

Watts said that when his firm requires a deposit or partial payment instead of all the money upfront, he tries to be sure it’s a large enough amount to cover the company’s expenses.

These campaign veterans say candidates have the best of intentions and expect to pay up. And some states and municipalities have laws requiring that they pay their bills.

But the problem, according to McClees, is "they have a tendency to spend more than they take in."

Not taking steps to protect your company can mean you’re effectively making a political donation. But that’s a risk some business owners might be willing to take, provided the process of doing campaign business pays off in the form of more profitable connections with other people or companies in the community.

Small Business is a weekly column on the topic by The Associated Press.