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How Candidates Boosted Their Main Street Appeal

President Barack Obama makes a brief appearance at the Democratic National Convention on September 5, 2012.
Getty Images
President Barack Obama makes a brief appearance at the Democratic National Convention on September 5, 2012.

Small business is almost always an issue in presidential campaigns. This year, it's morphed into one of the biggest.

Getting the backing of the small business community is important for most political candidates. Small company owners are often influencers: They are well-known in their cities and towns and they employ voters with a vested interest in the challenges that they face.

The Republican Party and Mitt Romney have been talking about small business for months, focusing on voter concerns like taxes and health care as small business issues. Small business was a dominant theme for a stream of speakers at last week's Republican National Convention. And "We built it" was a convention slogan — a response to a statement by President Barack Obama that, the GOP contends, reveals his insensitivity to small business. Even Ann Romney got in on the act during her speech designed to bolster her husband's campaign, proclaiming that he wasn't handed success, but instead, "He built it."

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Along the way, the president and the Democratic Party have fought back with their own campaign stops and videos that tout how much the president has done for small business — including cutting taxes and proposing legislation to help small companies create jobs. The Democratic convention schedule, so far, doesn't have the heavy focus on small business that the GOP did, but Jim Sinegal, co-founder of a small business that grew to become warehouse retailer Costco Wholesale and Small Business Administration head Karen Mills were scheduled to speak on Wednesday night.

Small companies are in focus because they employ about half the country's workers, or nearly 60 million people. That's a pretty big bloc of potential voters and both sides realize it. The slow economy is hurting business and job growth and that has intensified interest in capturing those votes. Both the Republicans and the Democrats are eager to win over business owners and their employees by promising help — and by warning that their opponents will hurt businesses.

"The phrase `small business' encompasses the mom-and-pop store, but even somebody who owns a company with 300 employees can think of themselves as a small business," says David Primo, a professor of political science and business administration at the University of Rochester.

(Read more: Why Small Banks Aren't Always Best for Business Loans)

Small-Business Focused Campaigns

The groundwork for a small-business focused campaign was laid in the winter and spring, starting with Obama's budget proposal for the fiscal year that begins Oct. 1. It included higher tax rates on wealthy individuals — up to 39.6 percent for households making $250,000 or more. Republicans and small business advocacy groups like the National Federation of Independent Business criticized the plan, saying it would hurt many business owners. Obama proposed a cut in the corporate tax rate, and the GOP came up with its own proposals. Then there was the battle over the health care law that Obama won in the Supreme Court.

Republican campaign speeches this year have focused on how Obama's tax and health care plans were hurting small businesses, and stopping them from hiring more people. Romney told small business owners in a conference call in June that Obama's polices are "an anti-business, anti-job agenda."

The rhetoric intensified after July 13, the day Obama gave a speech that included this sentence: "You didn't build that." Romney and the GOP have seized on the quote as an example of Obama's lack of awareness about the challenges small business owners face.

The president and Democrats say that he's being quoted out of context. This is the White House transcript of Obama's remarks:

"If you were successful, somebody along the line gave you some help.á There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you've got a business — you didn't build that. Somebody else made that happen.á The Internet didn't get invented on its own.á Government research created the Internet so that all the companies could make money off the Internet."

Nonetheless, Romney has hammered away at the comment at campaign stops. A few days after Obama's speech, Romney asked a crowd in Virginia, "Did you build your business? If you did, raise your hand! Take that, Mr. President!"

Campaigns Focus on Small Business

'Did You Build Your Business?'

Other GOP politicians have joined in. Former Gov. Tim Pawlenty, R-Minn., spoke in front of a banner that said, "We Did Build It!" at a campaign event in Dayton, Ohio, on July 30. And small business owners have appeared in videos and ads saying they were offended by Obama's comments.

Presidential nominee Mitt Romney
John Tlumacki | The Boston Globe | Getty Images
Presidential nominee Mitt Romney

"That was a very insulting remark to make. I built this business," San Antonio locksmith Gilbert Cantu says in one ad.

Still, even some Romney supporters say they don't believe that the president meant to say that small business owners didn't build their own companies.

"I think everybody knows what he meant — somebody helped you learn how to do that," Carl Higbie, a self-described die-hard conservative and owner of Tarzan Tree Service in Virginia Beach, Va., told The Associated Press. "But the way it came across, it says he doesn't understand small business."

Obama and the Democrats have been fighting back by using part of the phrase the Republicans used to criticize the president. "Fact Check: Romney Didn't Build That. He Destroyed It," is spread across the top of a page on Obama's website that charges that "the rate of new start-ups in Massachusetts was lower than the national average, declining during Romney's tenure" as Massachusetts governor. The phrase "Mitt Romney: You Didn't Build That -- You Destroyed It," is the title of a Democratic National Committee video that includes a montage of news reports and film clips about job losses at companies bought by Bain Capital, the private equity firm that Romney co-founded.

(Read more: Are You Better Off?)

The Democrats are also appealing to small business by touting the administration's record of helping small companies. And they're recruiting small business owners to help out.

"As the owner of Crenshaw Bros. Construction in Erie, I've seen firsthand how the President is looking out for us," says Don Crenshaw in a statement contained on the Democratic Party's Erie County, Pa., website. "The recession nearly ruined my company, but an influx of public investment projects funded by President Obama's Recovery Act rejuvenated our business."

Republicans are still attacking Obama's record in addition to his "you didn't build that" comment. At the GOP convention, Sher Valenzuela, a candidate for lieutenant governor in Delaware and the owner of an upholstery company, said of the Obama administration, "they just don't trust the entrepreneur's ability to grow her own business and to create jobs." Rep. Cathy McMorris Rodgers, R-Wash., who worked for 13 years in her family's fruit business, said, "unlike President Obama, I know that small businesses are the true engine of the economy, not the government."

The majority of small business owners are Republican, according to a 2011 survey by the National Small Business Association, a group that lobbies on behalf of small business owners. Fifty-four percent of the 650 owners surveyed identified themselves as Republicans, while 16 percent said they were Democrats.

Democrats with small business ties are tired of the bickering, according to some Twitter users last week. "My father was a small business owner. I run a small nonprofit. I'm a Democrat. So quit with the small business rhetoric," said a Tweet from Kevin Dean, of Memphis, Tenn.

Focusing on small business is a smart strategy because it will appeal to middle-class voters, Dean said in an interview with the AP.

"But it's also a red herring from the real agenda," he said. "I don't feel that Romney knows about small business. He knows about big business."

Email us at SmallBiz@cnbc.com and follow us on Twitter @SmallBizCNBC.

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