John C. Melaniphy
published in Area Development

New manufacturing companies with combined office and plant facilities are usually more complex, since they include senior management, middle management, supervisory personnel, skilled and semi-skilled workers, and perhaps some unskilled labor. Important elements in this process are as follows:

OBJECTIVES (might include the following): Select a city where the company can become a "big fish in a small pond."

Increase the quality of labor productivity, stabilize the labor supply, and reduce employee turnover.
Improve transportation options and cost/savings.
Reduce utility costs.
Reduce corporate taxes.
Avoid excessive government regulations.
Reduce health care costs.
Reduce unemployment compensation costs
Move closer to primary markets.
Move closer to raw materials.
Improve quality of life.
Avoid environmental issues.
Improve safety and security.
Substantially reduce real estate taxes.
The primary factors included in the market study are as follow:

A. Transportation

Distance to primary markets
Highway accessibility
Shipping costs
Timing to markets
Accessibility to major airport(s)
Railroad service
B. Raw Materials
Material availability
Proximity to raw materials
Freight savings
Location's cost/benefit relationships
Supplier proximity

C. Product Needs

Proximity to major markets
Marketing locational requirements (if any)
Supplier proximity for service

D. Personnel

Labor availability
Labor costs
Labor skills level
Labor turnover
Labor productivity
Earnings comparison
Health costs
Other fringe costs
Unemployment compensation costs
Training programs
Day care availability
Union profile

E. Utilities

Energy availability and costs
Trend in utility rates charged
Any special sewer or water requirements

F. Quality of Life

Housing availability and costs
School quality
Safety and security
Recreational facilities
Cultural facilities
Higher education

G. Environmental Considerations

EPA requirements
Company's needs
Special permits
H. Governmental Services
Level of service currently provided
Fire and police protection
Local taxes
Industrial waste
Community interest and cooperation

I. Special Considerations

Economic development incentives
Tax exemptions
Local incentives
Low cost financing
Infrastructure cost assistance
Free land
Employee training

J. Others

Any special requirements

K. Computer Analysis of Data

Comparison of alternatives
Model simulation of each alternative city
Computer analysis of hard number factors
Ratings of subjective data
Identification of priority ranking

L. Site Selection Alternatives

City selection
Site alternatives
Topographic survey
Geological report, including soil tests
Utility locations
Water and sewer requirements
Telephone, data, and communications links
Land cost analysis
Preliminary building costs
Site improvement costs
Financial analysis
Site selection
Site appraisal
Acquisition of site

M. Project Financing

Method of financing
Governmental assistance
Identification of lender
Negotiating interest rate and terms
Leaseback alternatives
Construction loan
Permanent financing
Opening the loan

N. Development

Final plans
Construction bids
Contractor selection
Permits and approvals
Move planning
Final punch list completion

There are many variations to the above depending upon individual needs, requirements, conditions, and other factors that must be reiterated and analyzed in order to identify potential locations and select the best locational opportunity. Nevertheless, through prudent and objective evaluation of the conditions that are necessary for a particular business, not only can relocation be a smooth experience, but it can also be a rewarding one.