Leaders in the technology industry benefit from asking specific questions at the start of their site selection process. For high potential start-ups, this means thinking about how to position their company for success far beyond those first five years. As leaders drill down the criteria, they may find that a less obvious choice is in fact the ideal location for building their team—and their profits.
Part 1: Offset Project Costs
For some tech companies, the first factors to consider with site selection may be easy to overlook. Unfortunately, this is especially true for start-ups. These leaders often do not realize that they have unique opportunities to offset their project costs through economic incentives. Being able to compare these benefits from state to state, or even against neighboring counties, can make a remarkable difference for protecting the company profit margins. What’s more, the best development partnerships will be designed to support the community as a whole, so everyone can benefit from the thriving economy.
In order to research these economic incentives, many tech entrepreneurs decide to partner with consultants who are familiar with the various types of tax credits and training grants available across the country. The team at Ginovus, for example, works with high potential companies to secure these incentives both during negotiations and after, with detailed incentive compliance management. These steps are crucial because companies can lose their economic incentives without having the proper reporting structures in place.
Part 2: Consider the Future Infrastructure
Once companies have their short-list of incentive-friendly locations, the next items to review will relate to the current economic outlook, existing infrastructure, and other related industry data for each area. Any relocation or expansion project will need to ask the following questions in order to make an informed decision:
- What competitors are in the region—is the tech market oversaturated?
- What is the tech industry sector’s projected five-year growth?
- Is the transportation infrastructure robust and streamlined?
- Are the utility rates reasonable—and do they have capacity for growth?
- Will the tax rates and tax structure hinder the business model?
Taking the time to examine the different tech companies in the area can give emerging industry leaders a better forecast of the future. On the one hand, establishing a business in an area with little to no tech experience may be a convenient way to secure industry-related tax incentives. Then again, areas that are relatively unknown may be less attractive for tech job seekers like the ones using Powderkeg’s resources. A strategic site review will consider the region’s status today, as well as how it may look down the line.
Part 3: Identify Your Talent Pool
The third piece of the site selection puzzle is to evaluate the occupational data. Any new location will need to appeal to—or even currently hold—the industry’s ideal labor force. Tech companies should always weigh a few additional market features to ensure that they can build the right team:
- Will there be enough qualified candidates in the market?
- How much will it cost to hire talent with competitive wages?
- Is the region attractive enough to recruit from other areas?
Another part of the talent equation is to determine the site’s cost of living. These calculations should include the site’s zip code, as well as those of the surrounding areas. It will be challenging to draw new employees to an area that has a low quality of place. Companies need to check the projected real estate availability as well. The perfect location should be able to support everyone’s best interests, from the community and general public, to the company shareholders and employees.
Working with a trusted team of site selectors can help tech leaders position their companies for growth and long-term success. That is one of the reasons why Ginovus is proud to share Powderkeg’s mission for connecting tech companies with the right employees. Feel free to send Ginovus a message to learn more about how Ginovus partners with clients for the crucial site selection process.