Let's say you run a state or local government, and you're anxious to attract entrepreneurs to your state, city or town. Who ya gonna call? For many states and municipalities around the country, the answer is DCI, or Development Counsellors International, a national public relations firm with offices in New York City and Denver that specializes in "economic development marketing." Translation: They get the word out that City X or State Y is a great place to locate your business.

So what makes for an entrepreneur-friendly environment? "There's a real kaleidoscope of factors," says DCI President Andy Levine, "and the biggest mistake people make is focusing on just one or two of them. An area may offer tremendous tax incentives, for example, which helps in the short term, but the longer-term profit picture may be a problem because the transportation system isn't so good, or you can't find the right kinds of workers there." Levine cautions that sometimes governments use incentives as a way of masking business problems in the community.

To find the right location for your growing business, you have to understand the basic profit factors that are really important for your business. "Number one in importance is access to your markets and customers; you want to be as close to them as possible," says Levine. "Next is access to the type of labor your business needs. If you're a high-technology business, for example, you're looking for a place with access to the research departments of major universities, like the Triangle region in North Carolina." Not only can you get help with your research and development, says Levine, but prominent universities graduate exactly the types of employees you want to attract. Also, university communities tend to have the cultural amenities (such as museums and performing arts centers) that will be attractive to highly educated workers.

Levine warns to beware of stereotypes. If you're a manufacturing business looking for low operating costs, "that would knock out a large chunk of the Northeast. But there are areas in the Northeast, such as Buffalo, New York, where you can operate just as effectively as in some Sunbelt states."

When getting started, look for areas with "clusters" of businesses that are like your own. "If you see a lot of similar businesses clustering in a particular area or region, there are probably some very good reasons for that," advises Levine.

As an example, Levine cites DCI's success in Tacoma, Washington. A sister city to Seattle, Tacoma for years struggled to attract high-technology businesses. "Years ago Tacoma's image was that of a blue-collar town dominated by pulp and paper mills," recalls Levine. "Residents joked about the 'Tacoma Aroma.' "

But all that changed when Tacoma brought DCI on board. "The first thing we did," says Levine, "was to establish a marketing plan. Every town, city or state should have a unique selling proposition that encapsulates what that area is about. We learned that Tacoma had built the largest city-owned telecommunications network in the country. So we developed the theme that Tacoma was 'America's #1 Wired City.' "

DCI launched the Tacoma campaign two years ago. Since then, about 80 growing businesses have located in the area, mostly e-commerce and Internet-oriented businesses that have a high need for the bandwidth that fiber-optic cables provide. "Interestingly enough, some of these businesses relocated from Seattle," says Levine.

Once you've decided on a few "target" regions for your business, get in touch with the economic development organizations in each area. This can best be done on the Internet. Go to your favorite search engine, and type in the name of the target community or region followed by the words "economic development" or "growth."

"If you're looking at a particular region, start with the largest organizations you can find, the umbrella groups that represents the largest geographic area," advises Levine. Generally, these groups have the word "greater" in their title, such as the Greater Cleveland (Ohio) Growth Association, or the Greater Phoenix (Arizona) Economic Council. "They can help you target more particular communities and areas within the region, and make the introductions for you," says Levine.

Finally, Levine cautions that you have to manage your expectations when choosing the right location for your business. "No area is going to be Nirvana," he says. "If you're looking for places that will solve all your problems, they don't exist."


Cliff Ennico is host of the PBS television series MoneyHunt and a leading expert on managing growing companies. His advice for small businesses regularly appears on the "Protecting Your Business" channel on the Small Business Television Network at www.sbtv.com. E-mail him at cennico@legalcareer.com.