When it comes to real estate, most people are quite familiar with the adage "location, location, location."
However, this expression doesn't pertain exclusively to homeownership. It's also quite applicable in evaluating which city to start your business in.
A City's Influence on your Business
In a perfect world, cities and their local businesses enjoy a symbiotic relationship. They offer each other a mutual benefit.
Growing businesses can increase the tax base and increase spending in the city. They can also make the city an enticing place to live and improve the culture in the area.
Cities can return the favor by eliminating bureaucratic hurdles for the business to operate efficiently, profitably, and continue growing.
Choosing a city in which to start your business means taking an objective look at the many factors that you would influence your business and regulations you may need to factor in.
Washington State overall has been a popular choice for businesses starting, and for good reasons:
● Low-cost energy
● Robust supply chain
● Pro-business climate
● Expert workforce
● Centralized export hub
● Culture of creativity
● The list goes on…
But to help you understand just how important this decision can be, I'd like to tell you about two very different experiences I had with two very different cities.
A Challenging Experience in Auburn
Once, my team and I chose to expand our tire retread manufacturing, warehousing, and corporate offices to Auburn, Washington.
We already were partially operating in Auburn, and we purchased five additional acres to build our new facilities.
On top of this, there were other pros for us to expand in Auburn.
● Auburn is located ideally between Seattle and Tacoma
● Several large transportation companies were moving operations there
● Boeing also had a large support facility in the area
Our business was doing very well. As we grew, so grew the need for hiring additional employees and adding extra space.
But as we made our final plans to construct a new 60,000 square foot facility, we found out just how difficult (and expensive) it would be to operate in Auburn.
The following are just a handful of the hurdles that my company ran into as we worked to get our Auburn operation up and running:
● 14 months to obtain the building permit and at great expense
● A $40,000 fee for hooking up our sanitary sewer system
● Another $170,000 assessment for future improvements on four intersections, since we would be adding traffic and employees to the new facility
● Several other fees and permits
It did not seem to matter to the City of Auburn that we already had facilities located there. They stood firm with their fees and their process, and we had to comply to get the job done.
A Much Smoother Experience in Statesville
Around the same time, I flew out to Statesville, North Carolina, with a couple of Freightliner executives. We had set up meetings to discuss building a new JIT Inc. operation.
When we arrived, we met a representative from the city. He drove us to a beautifully developed business park, explaining that the city had recently completed this project to attract new businesses.
As we toured together, he was attempting to sell us an 8-acre building site. His behavior was so similar to that of a commercial real estate agent that I asked, "Are you the real estate person selling this property? I thought you worked for the city."
His reply was startling.
"Sir, I work for the City of Statesville. We invested our tax revenues and sold bonds to develop this land in order to attract new businesses that would locate here and hire people from our area. We aim to develop a solid, dependable business base in our city."
Given my recent experience in Auburn, I was surprised. Still skeptical, I asked him, "About how long do you expect it takes to get the building permits?"
He replied, "Sir, it normally takes three days, but if we are busy, it could take a week."
Having just weathered a 14-month permit process in Auburn, I thought that he must have misunderstood me. I clarified to him what I was asking, and he went on to say:
"Sir, I understood your question the first time. We know how to fast-track business here. We want businesses here, especially clean operations as you have proposed. We can have the civil permits in three days."
Imagine that! A city that knows how to fast-track businesses and develops the area to attract their presence.
Finding a business-forward city makes all the difference in choosing a place to start (or expand).
Choosing Your City
When it comes to choosing a city to start your business in, be sure to take a multi-dimensional approach in evaluating your options.
There are cities out there that will slow you down with red-tape, but many more that will welcome you with a red carpet.