Now that remote work is commonplace, you might be considering relocating or expanding closer to customers, suppliers, and talented workforces. However, you shouldn’t rush into a decision of this magnitude. Conducting a thorough business location analysis will help position your company for future growth.
The pandemic and shift to remote work seemed to change certain landscapes overnight. Traditionally huge business hubs, such as California and New York, are experiencing a mass exodus as companies seek cheaper real estate. Tenants in New York flooded the market with more than 2.5 million square feet of sublease space in the third quarter of 2020, and several large businesses have announced plans to leave California.
At the other end of the spectrum, states with a relatively low cost of living are seeing a surge of new individual and corporate residents. Texas, Georgia, Colorado, Missouri, and Florida, among others, are all benefiting from shifting work norms. California employees moving to Texas will keep 1.6 percentage points more of their income due to lower state and local taxes, and businesses will pay lower monthly rent in Atlanta than in New York City.
If you’re thinking about moving your operations to a different state, you’re not alone. A lot of businesses are already taking the leap and reaping the rewards. Just remember that expanding or relocating a business to another state is a massive undertaking. You’ll want to conduct a business location analysis to fully explore what options are available before you decide to put down roots.
Location, Location, Location
Location is often jokingly called the “top three” considerations for a business, but there’s a bit of truth to the statement. When you’re thinking about packing up and leaving an area, the new location could be the deciding factor in your organization’s future success.
Every business is different. Your company might have a specific location in mind due to its proximity to customers and suppliers, or you might just be looking for a fresh start. Whatever your situation, you’ll want to develop a business relocation plan or a business expansion plan to ensure you make an informed choice.
It’s a good idea to start by narrowing down which states and cities you’re considering. Once you have an idea of where you want to be, you can begin conducting your own research or try reaching out to representatives of economic development organizations to see what kind of information and assistance they can provide.
When executives reach out to Missouri Partnership, for example, we send them a thorough analysis of our state and real estate options within about a week. They can then review the information at their leisure and get back to us once they explore all of their options. No matter what location you’re considering, make sure you account for all factors before making a final choice.
General Criteria for Selecting a Business Location
There are several things to consider during your business location analysis before choosing a site. While incentives will play a role, they should not be the determining factor. As you start searching for your company’s relocation or expansion spot, keep these four criteria in mind:
While employees can work remotely, a company that usually hires candidates with advanced degrees or specific experience shouldn’t move to an area that lacks the workforce it needs. Look for a talent pool with skilled workers, making a plan to start hiring for the roles you’ll need to fill before you move. Beyond the local market, you’ll also want to take advantage of available remote workers.
- Real Estate
Are buildings or sites available that meet your needs without exceeding your budget? Work with a commercial real estate professional who knows your potential location inside and out. Before choosing a site, perform the necessary due diligence and ensure it has everything you’ll need for your operations.
How will your employees commute to work? Are you close to manufacturing and distribution partners? Robust transportation infrastructure will help you out in both of these areas. Proximity to railroads can help with heavy, bulky freight, while nearby airports make it easier to send and receive important components at a moment’s notice.
The right city or town will have leaders who understand the economic benefits of new businesses and welcome you with open arms. They might offer assistance with your business site location analysis, provide tax incentives while you get up and running, or simply help spread the word about your expansion or relocation to the local community. Any support will prove invaluable as you get started in your new location.
A business relocation or expansion could be the best decision you’ve ever made for your company, but you’ll want to keep these four considerations in mind. As long as you thoroughly plan, research, and execute your business location analysis, you can be confident in your final decision.
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