One of the biggest challenges facing entrepreneurs launching a startup, or firm owners trying to expand in the campaign and advocacy space is that there is almost no infrastructure to turn to for support.
Consider the contrast with small business owners in any other industry, who can access support groups, whether through local organizations like a Rotary Club or the Small Business Administration, tap recruits from business schools, take online classes or simply walk into a library and check out any number of books on how to run and grow a business.
Michelle Coyle, a consultant-turned political business coach, has for years sought to give political entrepreneurs some of the support their commercial colleagues receive.
Now, as founder and CEO of the Political Business Institute, she’s looking to scale that service line. C&E’s publishers are co-founders of the Political Business Institute.
For all that has changed for political business owners, Coyle said many of the same challenges linger for her clients, which made her see the demand for an expanded political training and coaching offering.
C&E: What would you say the biggest challenge facing political entrepreneurs is right now?
Coyle: Most people who are political strategists don’t have any background in business at all. So the problem hasn’t changed since I started doing this seven years ago, which is that they’re still trying to run businesses like campaigns. It stresses everybody out and blows everything up. And it actually ends up being really inefficient. So what you’re looking at are people who basically can’t slow down to speed up.
C&E: Can you give us an example of that?
Coyle: They’re just stuck in a reactive mode to everything all the time. And so they’re ending up making these reactive decisions. For example, they waited to hire until they absolutely needed somebody yesterday, and then they just picked the first person that walks in the door versus taking the time to put a diligent hiring process in place.
They’re going to have to replace that person in a few months. And you can apply that to every single aspect of the business. If you don’t take time to sit down and strategize and get out ahead of stuff, then you’re just putting out fires all the time. Another example of that would be on operations. If you don’t take time to sit down and figure out your systems and procedures, then everybody’s just doing the best they can all the time. And they’re all doing stuff in a different way, and everybody’s confused and everybody’s upset, and everybody has to work twice as hard because there’s nothing in there to make it smoother.
C&E: What about financing and cash flow? Those are two aspects of running a business that are challenging for any entrepreneur.
Coyle: A lot of folks don’t understand cash flow the way they need to. They’ll talk about it like [their business is] a campaign or a non-profit in terms of the budget, and then spend instead of making the investment in the cash flow, which is how we think in terms of business. I have a mix of people who are into taking on debt, and people who aren’t. But it’s really hard to grow a business if you’re not taking on any debt, whether that’s establishing a line of credit [or accessing financing]. Stuff like that is really important when you have a cyclical revenue stream coming in.
C&E: So firm owners are treating their business budgets like they’re running campaigns?
Coyle: I hear a lot of, ‘Well, I have no idea what’s coming in or when.’ They’re in this mode of like seeing what comes in the door and then what’s in the budget based on what came in the door. Kind of like fundraising on a campaign versus ‘here’s how much we need to sell in order to invest what we need to invest to grow based on the strategic plan.’ The flip side of that is people taking anything they can get, which is often really detrimental to the growth of the business.
If you’re really growing a business strategically, you’re going to figure out how much you need to take in What kinds of clients do we want? How many of each type of campaign are we gonna take? That sort of thing versus just like, ‘Oh, we don’t have any capacity to serve this, but if they want to sign a contract, we’re going to sign a contract to figure it out.’
When you do that, you might get a short term monetary gain, but you’ve burnt everybody out. Now you have no time to work on your business. You have no capacity left to do anything else, and that’s when you get stuck. And that’ll actually keep you stuck at the same level in a business for a really long time.
C&E: Is there room in the current market for a mid-sized shop anymore? The trend has been either 1-2 person firms or mega operations.
Coyle: I think there’s still room in the market for the 25-person firm. For better or worse, in the campaign industry, there’s always money to be made. There’s still a lot more demand than there is supply in terms of consultants versus people who need consultants.
And so what that means is that people can make money and they can make a substantial amount of money without knowing what the [heck] they’re doing. On the business side, that’s not true in any other industry. You can get in and you can grow that couple-million-dollar-a-year firm with 20 people at it, really, without knowing a whole hell of a lot of business. You’re just going to be miserable.
C&E: And that’s something you try to remedy for your clients?
Coyle: It’s not that people can’t make money without business knowledge. It’s that they’re miserable because then you’ve got 20 people working for you. You’ve never even really managed people. You don’t know how to do that. They all hate you. You don’t want to fire them all and start over, except sometimes you fantasize about it.
This is the stuff I hear when people feel like they’re trapped in a prison of their own creation. And so as much as we want to talk about, ‘oh, we’re here to help people make money.’ Well sure, but really we’re here to help people be healthier and happier and be nice to the people that work for them, and just do this in a more sustainable way that supports their growth as people and their lives outside of work.