At a fundamental level, a site location search is about gathering information. There is category after category of pertinent data that executives have to have in order to make the most informed decision possible about where to site a relocation or expansion project.
The easy part of any expansion project is actually making the decision to expand. The hard part comes from deciding where best to site that new project. It’s a decision that cannot be taken lightly, because it can take years — if ever — for a company to overcome a wrong decision.
That’s how high the stakes are.
Years ago, a company deciding to embark on an expansion project faced a mountain of incoming information from communities and states eager to land its manufacturing plant or distribution facility. While that company would prefer to remain anonymous during this initial stage of a location search, that was almost impossible.
| “The Internet has made our job faster and has made us able to do our searches with less people. There is so much information available.” — Jennifer Tanner, Senior Project Manager, CH2M Hill, Inc. |
Today, however, all of that information can be easily accessed from the comfort of your own office or home — anonymously — thanks to the Internet.
For companies embarking on their first site location project, it could initially seem daunting and overwhelming. Your universe could be the entire country — perhaps even the entire world, depending on the reason for your expansion project.
The site location process usually starts this way: The president of a company turns to the vice president of real estate or operations and announces that capacity is at maximum and the company can’t handle new orders in its existing facility. It’s time to look for a new facility and the VP is put in charge.
Almost certainly, the first place this vice president will look for all information is the Internet.
How a Location Search Is Conducted
The search is usually conducted in a funnel-type approach, said Jennifer Tanner, senior project manager in the Economic Development and Business Location Group of CH2M Hill Inc. It begins at the national or international level, then goes down to the state, region and, finally, community level.
What are executives looking for? Practically any type of hard, objective data that they can use to compare and contrast different communities, regions and states.
They want to see information pertaining to building availability, labor and union data, demographic information, average wage and labor costs, local employers, utility availability and rates, construction costs, highway access, incentive packages, colleges and universities, the legal environment of a state or region, etc.
Testimonials from companies that have relocated to communities are a plus. Success stories create a level of comfort for companies considering entering a new state or community.
Companies are also looking for contact information and links to submit an RFI (request for information).
Companies can use the Internet to compare and contrast salaries in different parts of the country, determine whether a certain region is better than others for environmental rules and regulations that apply to their business, or gather demographic data for certain areas. And it all can be done in just a couple of mouse clicks.
Companies look for differentiators as they narrow their search down to a list of five to 10, then, eventually, two to three potential sites.
A site location search was once a 12- to 18-month process, but has shrunk to a three- to four-month process thanks to the World Wide Web.
“The Internet has made our job faster and has made us able to do our searches with less people,” Tanner said. “There is so much information available.”
Personal Relationships Still Matter
Despite all of the data that can easily be gleaned off of public and private, third-party Web sites, a site location search comes down to which community the executive of the relocating company feels most comfortable in.
At the end of the day, site location is about relationships and location visits.
“Nothing will ever replace a site visit and nothing will ever replace relationships built prior to the search,” Tanner said. “That’s the way the site selection world works — no matter how much technology is thrown at a project.”
There is always a built-in risk to relocating to a new community. Tanner said that company executives use the information gathered during a location search to lessen that risk possibility.
“With relationships and firsthand knowledge, people will feel more comfortable about obscure communities that wouldn’t necessarily pop to the top of a list,” she noted.
That’s why communities need to have their Web sites continually updated with the most recent data. It’s a way to stand out at the beginning of a location search.
“It is important that communities have complete site information,” Tanner said. “There can’t be any holes.”
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