There are major concerns when moving a business. They are too often overlooked and potentially damaging to many companies.

If you are thinking about moving a company based on analysis moving - carrying boxes of expansion opportunities then taking advantage of available incentives is simply good business.

Deciding to move a company because of offers made without careful analysis of long-term results often prove ill advised.

I moved a major corporation with great success and with no financial incentives involved.  In fact, local government did not know of the move until we were operating in the new state.  The move was simply a best fit for long-term company growth and the business thrived in the new locale.

I assisted companies considering moves, pointing out data points not previously considered.  I also assisted companies moving back to their original locale after learning the relocation was ill advised.

Here are five considerations from a very long ‘buyer beware’ list many companies overlook when dazzled by recruiters enticing them to relocate or expand in another area.

  • Be prepared for an abrupt change to company culture.  Are your every day New England operations and attitudes compatible with those in Texas?  Are your managers skilled supervising workers from different ethnic or societal backgrounds?  Culture damage may take years to correct.  One company put a conflict resolution consultant on retainer due to employees coming from 18 different countries.
  • Not all incentives are in the business’ best interest.  Be wary of ‘Free’ land linked to high real estate tax rates or have hidden problems not publicized because the land is ‘free’. There is no such thing as truly ‘free’ whether it be lunch or land.
  • Often promised incentives are not as promised.  One company ran into problems when promised 10-days or less permit ‘fast-tracking’ proved unavailable.  When the approval period extended past the promised dead line, the business owner learned the fast-track approval program required a substantial fee.  The owner did not read the incentive program fine print.
  • New locale workforce expertise is not quite the fit necessary for business growth.  There are engineers and there are engineers.  Do you need electrical engineers or propulsion engineers?  Do the premier college graduated CPAs have skills to do street level work?  Do you need skilled traditional machinists or CNC machinists skilled with exotic metals your clients require?  Are ‘trained’ employee prospects skilled with several years’ experience or recent graduates from local 60-day job training programs?
  • Vendors are another issue.  New locations do not always offer benefit of current long-term local vendor relationships.  The supplier now working with you on after hour delivery, payment terms, and advising of pricing changes within their industry is not offering similar service to a new unproven client.  Promises are one thing and proven service over time is not always replaceable.  Relationships are critical to business success.  A relocation that changes that dynamic can prove costly.

As the carpenter advises his apprentice, “Measure twice, cut once.”  Think carefully before deciding to dine on greener grass.

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Filed under: Business

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