When do you need to hire a lobbyist or government relations professional? That can be a tricky decision, especially for small-business owners. Looking back, Mike Cikacz wishes he had made the decision sooner.
In 2001, Cikacz and a business partner formed IWP, a Boston-based national provider of pharmacy services for the workers compensation industry. They quickly focused on building IWPs sales team and opening new markets, but gave little thought to the exposure to regulatory risk their company and industry faced.
We were woefully nae when it came to all things governmental, said Cikacz. We were working 24/7 to build the business and, while we realized there were some regulatory concerns, other management priorities held our attention. I realize now, we should have retained industry lobbyists as soon as we identified those risks.
IWPs first legislative threat came when industry regulators in New York adopted sudden and drastic changes with little notice and over the objections of industry stakeholders. It cost the company millions of dollars in lost revenue. Cikacz first looked to state industry groups for assistance, but found them focused on other legislative and regulatory matters. So, he was left to reach out to competitors and customers to exchange information and insight.
Then less than a year later, Cikacz was called to testify before the Texas Workers' Compensation Board on yet another regulatory change that could cost his company additional revenue. This time, he quickly retained an industry lobbyist to guide his company through the process. Ultimately, IWP developed a strategic plan, retained lobbyists in other states and hired full-time assistance.
Managing multimillion-dollar sales strategies and coaching marketing teams was easy compared to navigating the industrys changing regulatory landscape, said Cikacz. Dealing with government officials and regulators in multiple states who with the stroke of a pen could drastically alter the playing field and strip our company of potential revenue was daunting. It kept me up at night.
Cikacz is not alone. Companies in nearly every industry are impacted by myriad governmental regulations. Small businesses especially can find the world of policy and politics to be complicated and costly so they often wait too long to wade into the government relations tide pool until it turns into a tidal wave.
A simple five-step analysis can help businesses of all sizes determine when to retain lobbyist representation:
1.Seek a regulatory review by outside legal counsel. If you are operating in a regulated industry, it is important to know what state and federal government changes are occurring that could impact your business.
2. Review the regulatory findings with your chief operations, financial and marketing executives to gauge the risk facing every aspect of your company.
3.Compare your finding with those of an industry trade association whose staff routinely tracks regulatory and legislative actions. If your industry doesnt have an association, consider starting one. Some of the most effective coalitions begin with a few industry players.
4. Determine the timeline. If an agency, Congress or your state officials currently have industry legislation before them, hire a lobbyist immediately. Reach out to legal counsel, industry trade groups, and even friends, neighbors and customers for recommendations.
5.Anticipate regulatory or legislative movement. Whenever possible, stay ahead of regulators. A lobbyist who is knowledgeable about your specific industry can provide valuable counsel on how to prepare for potential regulatory changes or help you inform the policymaking process.
Jon Rawlson is founder and president of Armory Hill Advocates LLC, a boutique lobbying firm advocating for health care and nonprofit clients in Florida and Washington, D.C. For more information, visit http://armoryhilladvocates.com.
