Every business approaching a location search would agree: time is money. The process to identify locations, evaluate the options, and make a final selection easily takes six months or more, and then the hard work of securing permits and negotiating project implementation details begins. How can you optimize the process to find the ideal location while efficiently using time, money and resources?
This article provides a breakdown of the location selection process:
- The major steps
- Details of what each step entails and how long it takes
- How you can save you time and ultimately money (and peace of mind) in the search process
How long will this process take?
Unsurprisingly, the answer depends on your sector (e.g., manufacturing vs. services), your real estate and permitting needs (e.g., industrial land vs. office space), and your own team’s decision-making processes and timelines (e.g., is your firm outsourcing the process or conducting it in-house; who is leading the process; how many decision-makers are involved).
A general estimate is that it will take at minimum 4–6 months (likely longer) to collect and analyze information on potential locations, make in-person visits to short-listed locations, and negotiate final real estate and incentives details with the top location(s) before making a decision. The below figure summarizes the major steps of a site selection process.
What are the key elements of each step?
The major steps are relatively straightforward but can get pretty complex, pretty quickly.
This is the stage where your team should answer the important “W” questions:
- Why are you doing the search?
- What characteristics are must-haves vs. nice-to-haves for your next location?
- Who is doing what in your organization (or externally) and when?
- Who will make the final decision(s)?
A location search is a mix of art (qualitative) and science (quantitative) steps; the screening phase is the science part of the search. In this phase, you should identify key decision-making factors. This include includes factors such as proximity to markets; transportation/ infrastructure; talent availability, quality, cost; business climate like taxes and/or incentives.
Next, weigh these factors to create an index that allows for comparisons across locations. Which factors are most important to your business?
Once the factors and weights are assigned, you must gather the data. This is often when you will solicit granular information from state and local economic developers.
The final part of this step is to organize the information you’ve collected and then analyze it to identify a shortlist of locations that fit your criteria.
(Almost) no one buys a house sight unseen; the same goes for industrial or commercial real estate.
Once you have identified your top 2–3 locations, you should arrange in-person visits to see the prospective real estate options. During these visits you will:
- Meet with key decision-makers who will be involved in the real estate, incentives, permitting, and other discussions
- Interact with the community to see which place feels the most like home (the “art” of the science-art balance)
At this point, you know the community(ies) at the top of your list but you need to finalize the details. A few questions to consider during your negotiations:
- What are the terms of the real estate transaction?
- Is the community offering incentives that may make the location more attractive or competitive than another location?
- Are there permitting or regulatory concerns that could be addressed before you make a final decision?
The selection timeline depends on your company’s internal decision-making processes. Once you have all of the necessary information, you need to update the key decision-makers on the latest recommendations before they can make the final decision.
Is there a way streamline this process?
The major steps are relatively straightforward but, like most things in life, the devil is in the details. We know that this location search process is high-stakes and you want to get it right. But this process requires significant time, focus, and resources, not to mention specialized data anxd analytics to even identify the most promising shortlist locations, let alone effectively compare them.
This is exactly why the LocatEDTM portal was developed—to help decision-makers identify their shortlist locations at the click of a few buttons.
Fast track your location search
With 5 simple inputs, LocatEDTM compiles and analyzes all of the data you need to identify your shortlist locations:
- Find and score locations based on the factors that matter to you (like talent and business climate)
- Estimate your likely incentives package
- Access the same real estate and community talent dynamics information that economic developers have (and more).
Enhance your incentives negotiation strategy
LocatEDTM offers the only dynamic incentives predictor in the market and can help you answer two key questions:
- Which incentives do you qualify for in any given state? The Incentives Profitability Model evaluates nearly 275 different incentives programs across the Lower 48 U.S. states to estimate your project’s eligibility. It also provides 10-year profitability for each state given their likely incentives offer.
- How much can you expect to receive in incentives from any given state? The AI Incentives Predictor compares your search parameters against 35,000 past projects topredict your likely incentives packages state by state.
Armed with this information you can, you can save time researching the arcane rules of each incentive and focus on how incentives will impact what matters: profitability.
Optimize your location search
The location search process is a high-stakes, high-anxiety event for any company. This time-intensive process requires numerous people and resources to assemble the needed information to make decisions. EDai’s LocatEDTM tool was designed to help leaders make sense of the location search, streamlining the analytical elements of the process to empower decision-makers to focus on the highest-value piece: the decision.