You Don't Need to Spend Millions to Make the Investment Worthwhile
Advocacy's value depends on what a policy means for your business. Even modest representation can help address significant risks, including costs avoided when harmful proposals are changed or withdrawn.
Written by
John Fletcher
A common perception is that lobbying only makes financial sense for companies spending hundreds of thousands - or millions - of dollars on government affairs.
That's backwards. The relevant question isn't how much a company spends on lobbying.
It's how much the policy being discussed is worth to that company. Suppose a business spends $20,000 per year on a state lobbyist.
If that lobbyist helps prevent a regulatory change that would have cost the company $100,000 annually, the investment has already paid for itself five times over. If the lobbyist helps preserve a $250,000 tax benefit, the economics become even more compelling.
The same principle applies in reverse. The smaller the cost of advocacy relative to the economic consequence of the policy, the more rational the investment becomes.
Ultimately, lobbying ROI can be difficult to measure, and that’s because sometimes the most valuable outcome is something that doesn't happen.
Cost savings show up as a tax increase doesn't pass, a regulation that’s amended, a licensing requirement that’s removed, a reduction in a proposed fee, a government program that remains funded, or a provision harmful to your business that ends up excluded from a bill.
There isn't always a line item on the income statement labeled “money saved through lobbying.”
But that doesn't mean the economic value isn't real.
Businesses routinely spend money managing risks that may never materialize. They hire attorneys to prevent lawsuits. They buy insurance to protect against catastrophic losses. They employ accountants to reduce financial and tax risks.
Businesses need to hire lobbyists that prevent problems from ever seeing the light of day.
Civalta helps businesses of every size find the right government affairs professional for their needs, so professional advocacy isn't limited to the companies with the biggest government affairs budgets. Whether that’s $15,000 or $150,000, there is an advocate that can effectively represent your business, employees, and customers.
Your business has a voice. Make sure it's heard.