Once you've finally put down on paper all those issues that
have been nagging you about your current location, it's time
for the second step: scouting the alternatives. Entrepreneurs
recommend taking a look at several options. Thorne eyed Denver;
Boulder, Colorado; and Portland, Oregon, in addition to Seattle.
Genex scoped Boston, Chicago, Cincinnati, Miami, New York City, and
Washington, DC, before settling on Atlanta.
In an expansion such as the one Genex undertook, the opportunity
to grow the second office depends largely on the wealth of target
clients and the competitive environment. New York City may have had
more companies, but it also had more competition. "We really
liked the competitive environment [in Atlanta]," says Genex
managing director Seth Lynn. "We felt like we could elevate
ourselves much more rapidly in Atlanta than the other
cities."
Experts say that in researching your options, you should contact
the local chamber of commerce--even while being wary of that
source's bias for its town. Genex, for instance, got
information and introductions to other entrepreneurs from the
Atlanta Chamber of Commerce's economic development committee
that helped with its decision. Such introductions can help you
estimate costs for real estate, insurance and labor. You can also
get information on local educational opportunities to find young
talent and provide continuing education for prospective
employees.
Costly Moves
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As you eye a new location, remember that it won't
necessarily pay for itself just in more employees, lower rent or
better transportation. The savings need to be significant to recoup
the substantial cost of moving your business.
Regardless of whether you move to a new city or across town, the
biggest cost of a move is in lost employees. Typically, only 30 to
40 percent of the employees offered positions in a new city accept.
(Even Boeing achieved those numbers despite its expectation that 70
to 80 percent of its executives would relocate to Chicago.)
The labor havoc is less when you only move across town, but
it's still there. "If you're moving any substantive
distance, it's the people who [live in] the other direction
[from the move] that you've got to address, even if it's 30
miles," says Amdur.
And if you decide to move employees, keep in mind that the
Employee Relocation Council estimates it costs an average of
$51,353 to move a home-owning employee and $15,335 to move an
employee who rents.
That doesn't even begin to take into account the lowered
productivity as workers surf the Web for information on everything
from homes to schools to churches in the new town. You'll also
lose income from time lost during the move.
Where to Now?
In the end, you may decide that a change in location isn't
worth the effort. Hess estimates that half the firms that
investigate a move decide to stay put after looking at the
costs.
If you decide a new location is the only solution to growing
your business, then your work is only beginning. Mumma and other
experts say that the moving process can take up to a year from
start to finish.
And don't speak too soon, even in an effort to keep
employees informed along the way. "The company must clearly
define what's going to be offered to employees," says
Diane McIntire of Cornerstone Relocation Group LLC, in Warren, New
Jersey.
Make sure you've got plenty of information to sell employees
on the move. "This may include tours of the area," says
McIntire. Be able to answer or bring in an expert to field
questions about the new location, including everything from the
weather to cultural opportunities.
If all those details sound like a second full-time job,
that's exactly what they are. But no one ever said the road to
bigger growth was going to be an easy trip.
For a complete listing of the top cities and
profiles of our number-one hot spots,
click
here.
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