How Politics Can Propel or Stunt Business Growth

2016 has been an unusually bleak year. The U.S. presidential election showed the political fissures within the Republican and Democratic parties, and Trump’s shocking win has divided the country. On one side you have supporters chanting “Make America Great Again,” and on the other you have activists marching with signs that read “Dump Trump,” and other colorful slogans.


What does this vitriolic political climate mean for small business? Well, it depends on your customer base. Should your business take a political stance, or should you keep mum until you’re called out onto the floor? Will the political stance your company takes help or hurt your business?

When Taking a Stance Works

We’ve seen what can happen to a business when it takes a political stance. In a radio interview in 2012, fast food company Chick-fil-A’s CEO Dan Cathy spoke up about his opinion on the gay marriage debate. Cathy said about gay marriage: “We’re inviting God’s judgement on our nation when we shake our fist at him and say we know better than you as to what constitutes a marriage. And I pray God’s mercy on our generation that has such a prideful, arrogant attitude that thinks we have the audacity to redefine what marriage is all about.” Uproar over Cathy’s remarks ensued, but he defended his statement, saying that he’s “supportive of the family—the biblical definition of the family unit.”

People on both sides of the gay marriage debate had a lot of feelings about what Cathy had to say. There were calls to boycott the food chain and to frequent only this establishment until it was known where other chains stood. Despite receiving criticism, Chick-fil-A’s sales rose by 12 percent in 2012. By branding itself as the traditional family-oriented establishment, customers with the same belief system visited the franchise more often, boosting sales. In this instance, taking a political stance helped, but it doesn’t always.

When Taking a Stance Doesn’t Work

New Balance has been in the news in recent weeks for a comment made by the shoe company’s executive, Matthew LeBretton. The company’s leaders did not like President Obama’s Trans-Pacific Partnership trade agreement. In an interview with the Wall Street Journal, LeBretton made that plain: “The Obama administration turned a deaf ear on us, and frankly, with President-elect Trump, [New Balance] feel[s] things are going to move in the right direction.”

This statement angered many of New Balance’s left-leaning supporters, as it looked like the shoe company had taken a pro-Trump stance. The alt-right movement quickly took up the brand, with the Daily Stormer, a Neo-Nazi and white supremacist news site writing that New Balance is now the “official shoe of white people.”

Though the company has tried to distance themselves from the hate group, New Balance sales have plummeted, decreasing by as much as 25 percent. New Balance released a statement on its Twitter page denoting hate and bigotry, but it’s customer base has yet to return to the shoe company.

If your business loses customers because of a PR snafu like this one, what can you do? This is when it’s ideal to have a business insurance plan. Business insurance covers the financial costs of lost business in its business interruption policy. If your business is forced to shut down, recall a product or suffers a blow from customer reviews and ratings, business interruption insurance will cover the losses for a period of time until your business is able to get back on its feet.

Is it Worth Getting Political?

You’ve seen the up-and downside of when a business turns political; customers will either flock to you or leave you for dead. In this day and age however, it is better to take small steps than none at all. According to Steven Callandar, a professor of political economy at the Stanford Graduate School Business, taking a few small steps will show activists that you’re willing to work with them, “invest[ing] some resources in [your] brand image…” Risks are worth taking.

Wasn’t starting your small business a risk? Unless your political leanings cause harm to others or you are unwilling to hear and work with the other side, speak up, your brand will be given a voice.