Corporate Relocation: Tips to measuring a cities business climate.

Getting to know a variety of municipalities around the country, in my role on a corporate relocation team, showed me the good, the bad and the just plain ugly. Some cities were so difficult to deal with that they never made the first cut.

The day-to-day difficulties, even getting through on the phone with a responsible city official, were perplexing. Or in others no one seemed to be in charge, and it took forever for the most minor decisions to be approved. Compared to our corporate decision making process many cities approach was indeed glacial in its speed.

In other cities, many in the same state or area, showed an impressive efficiency. They were attuned to the needs of the relocating corporation, their officials were available for consultation and decision making and they made a good faith accommodation to answer our relocation concerns.

In one community they had developed such a proactive approach in helping the small employer (for example, recently they attracted a body shop with 2 employees, an Ebay entrepreneur with 5 employees and a tile shop/contractor with 4 employees) that it was a simple transition to effectively work with the larger employer. Their successful focus was to encourage the smaller growing employer to broaden their cities economic base. This proactive approach had grown from suffering a long period of economic malaise when a large employer had moved from the area over 20 years previously.

All along the relocation process we will ask ourselves and were making judgments on which city or area would we relocate to or open a new operation. So our first step in finding a location to relocate or expand a new operation would be to make a general subjective assessment of the business climate in the community. Rarely, would a city make the first cut if the subjective factors were negative even though the purely economic factors might look somewhat favorable.

The first step is to identify cities that are motivated to generate job growth and revenues. This is the core trait we were on the lookout for. Is the city making economic development happen? Not just “elephant” hunting but is the business climate attractive to the smaller employer?

Here’s a method that helps us arrive at the ultimate short list. We call it our “Wendy’s” approach.

When the founder of Wendy’s Dave Thomas was starting, the story goes; he couldn’t afford a big expensive real estate department in researching new locations for his restaurants. After some thought he concluded the big guy on the block, McDonalds, had a an extensive real estate operation so he would just piggy back onto whatever location was analyzed, picked out and opened by McDonald’s. Once Thomas decided to locate in an area he would locate the busiest McDonalds and find real estate for his new Wendy’s on the most well traveled street near the McDonald’s. The strategy worked and Wendy’s took off like a rocket.

Using the “Wendy’s” approach we first review the city’s latest economic development report. Has the city recently received a significant HUD grant or maybe grants? Has the city successfully attracted one or more development firms for mixed-use development? Depending on the size of the community is the development commensurate with the community’s resources?

Another sign the city is willing to help start a new enterprise from scratch; does it have a new business incubator program? What is its track record? Again look critically at the program’s results. Business success stories and failures from the program, interview the participants. What is the community doing to get the most bang for their buck with this program? Compare the program to others in the state. With this information you’ll have an early picture of a serious effort or a community just taking advantage of state and federal funding.

Another "Wendy’s" tip is to look for the recent arrival of banks in town or the expansion of local banks. A sure sign of a city that is friendly to business is its level of local investment activity. Banks enter markets in order to generate quality loan activity from newly established or expanding credit worthy businesses. Likewise, look for newly opened, trendy restaurants and gauge their lunch and dinner traffic.

On the retail side, are shopping districts vibrant? Better still, are older stores and shopping malls spending dollars to modernize? These are vital signs of a strong growing business climate.

Lastly have a look at the central business district. This is where you’ll find results if the city officials are successful in reestablishing a downtown where residents can live, work and have fun.

Compare these two cities: in one they placed over 80 planters filled with flowers in the downtown area but neglected to water the plants so instead of a colorful positive backdrop all you saw were dead flowers. In the other community they cut out planting areas in the centers of the downtown boulevards for planting of flowers and shrubs. They involved local service clubs and schools. One city employer had the task of driving a tractor pulling a trailer with a tank and watering the plants. Driving into the downtown area of the second city was like driving into a well cared for garden. Who do you think scored higher in our “Wendy’s” analysis?

Overall the “Wendy’s” approach is an excellent starting point in winnowing down possible city candidates for the relocation or the opening of a new operation. From here you can more closely study other data important to your corporate needs. Lastly, if the candidates are about equal the “Wendy’s” factors can be used to break the tie.