If there has been one single, overriding theme to the U.S. economy over the past year or so, it has been that companies are cutting back spending in an attempt to protect profits or, in some cases, to protect the continued viability of the business itself.
The news is full of reports of Company A selling off (or closing down) unprofitable or inefficient manufacturing plants around the world while, at the same time, Company B is laying off several thousand production workers while Company C, which laid off production workers last quarter, is now laying off middle- and senior-level managers.
Some companies are postponing new product launches, while others are filing for bankruptcy protection. Still other companies, unaffected by the current downturn in the economy, wonder how long their luck will hold out. Retailers - and a lot of other folks - are holding their collective breath to see what the upcoming Christmas season will bring.
As economic downturns go, this one looks like it might be milder than most. In fact, by this time next year we will probably be looking at our second or third quarter of economic growth.
But for now, though, most companies are focused on ways to dramatically reduce spending in order to shore up their financial footing.
One way to dramatically alter your company's operating costs is to physically relocate one or more of your facilities. Clearly, this scenario is not for every company - probably not even for most companies - but it might fit for your company. Hear me out.
The No. 1 reason a company moves is that high operating costs have made it noncompetitive. The reasons for these high costs are important to understand.
Sometimes it may be high taxes, in which case the solution is to find a place with lower taxes. Sometimes it's the cost of labor - average salaries, benefits, workers compensation and unemployment insurance costs - or, perhaps, even onerous environmental regulations.
Or maybe your current facility is saddled with antiquated equipment. An important byproduct of a physical relocation is that it is also an opportunity to bring your facility and manufacturing process up to modern standards. Think about it - if you're stuck in a facility that may have been ideal 50 years ago, with equipment that was state-of-the-art 50 years ago, and your competition is beating you about the head and shoulders today, why not kill several birds with one stone?
If this scenario matches your company's current situation, perhaps now is the best time to consider solving a number of problems that will greatly improve your future competitiveness.
On top of that, depending upon the capital investment and the number of jobs involved, you may also qualify for various state and local financial incentives that will help to offset some of the cost involved in setting up a new facility.
Three to five years from now, you'll be glad you did.
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