First Customer Programs: How Local Government Can Jump-Start New Businesses

Why Becoming the "First Customer" Is a Powerful Economic Development Tool

Small towns across Oregon face a common challenge: how to support new business growth with limited resources. One of the most practical and immediate tools at your disposal is becoming a “first customer” for local startups. Municipal purchasing power, even on a modest scale, can make the difference between a business idea stalling out and a new enterprise taking root.

When a town government becomes a new business’s first customer—by buying goods or services that the municipality already needs—it provides that business with critical early revenue, credibility, and a real-world reference. This initial support helps local entrepreneurs overcome the “chicken and egg” problem of needing customers to grow, but needing growth to attract customers.

Identifying Opportunities Where Municipal Needs Align with New Businesses

Start by looking at your existing municipal needs—maintenance, landscaping, catering, printing, cleaning, IT support, or event services. These are all areas where local entrepreneurs may be able to offer competitive, personalized service. Often, city administrators are among the first to hear about new businesses launching in town, whether it’s a neighbor starting a landscaping company or a resident opening a bakery.

Hold informal listening sessions, attend local business association meetings, or simply keep an open channel with your chamber of commerce. This helps identify emerging businesses that could fill municipal needs.

Simple Frameworks for Creating First Customer Relationships

Supporting new businesses through procurement doesn’t require overhauling your policies. Here are practical steps that fit within most existing procurement guidelines:

• Micro-purchases: For small purchases below a certain dollar threshold, many towns can buy directly from local vendors without a formal bidding process. Use these opportunities to give new businesses a chance.

• Rotating vendor lists: Maintain a list of local suppliers and rotate small contracts among them, ensuring new entrants get a fair shot.

• Pilot projects: Start with a small, low-risk contract (e.g., a one-time event catering or a short-term maintenance job) to help a new business build experience and references.

• Transparency and outreach: Publicize upcoming opportunities through your website, social media, and local business groups, making sure new businesses know how to participate.

Always check your town’s procurement policy and consult with your legal or finance team to ensure compliance, but remember that many small contracts are exempt from complex bidding requirements.

Strategies for Supporting Local Entrepreneurs Through Targeted Municipal Purchasing

Beyond individual purchases, you can strengthen your approach by:

• Hosting procurement workshops: Offer simple training sessions on how to do business with the city. Partner with local business groups or regional economic development agencies to keep it low-cost.

• Mentorship and peer support: Connect new business owners with experienced local vendors who have successfully navigated the municipal procurement process.

• Set-asides or local preference policies: Where allowed, reserve a portion of contracts for local or emerging businesses, or offer a scoring preference for local suppliers.

• Feedback loops: After a contract, provide constructive feedback to help new businesses improve and compete for future work.

Measuring the Impact and Scaling Successful Approaches

It’s important to track the results of your first customer efforts so you can refine and expand them. Start simple:

• Track contracts awarded to new or local businesses: Keep a running tally of how many contracts go to first-time vendors.

• Monitor business growth: Follow up with businesses you’ve supported to see if they’ve added jobs, expanded services, or landed new customers as a result.

• Share success stories: Celebrate wins at council meetings, on your website, and in local media to build community support and attract more entrepreneurs.

• Adjust and scale: Use your data to advocate for more ambitious local procurement initiatives, or to streamline your processes further.
  

Communities that systematically measure and publicize their impact see greater buy-in from both the public and policymakers.

Conclusion: Take the First Step Toward Stronger Local Economies

Small towns don’t need big budgets or complex programs to make a real difference for local entrepreneurs. By becoming a first customer, you can give new businesses the boost they need to succeed—creating jobs, strengthening your economy, and building a more vibrant community.

If you’re ready to take your local business support to the next level, Contact HSC and let us help design comprehensive strategies tailored to your town’s unique strengths and needs. At HSC, we’re here to help Oregon’s small towns thrive—one business, and one contract, at a time.