Dean Barber

Moving is a Pain, for People and Companies

In Corporate Site Selection and Economic Development on August 8, 2015 at 2:04 pm

After a week of moving heavy boxes from a former residence to a new one, I am all stove up.

For those don’t know that southernism, it means that I am sore from my earlobes to my toes, as if I were beaten with two by fours. And thus I am more convinced than ever that physical labor does not agree with me and should be avoided whenever possible.

But I could not avoid it last week. While professional movers were hired to pick up and transport our furniture 15 miles from point A to point B, I spent the good part of last week packing and moving boxes in daily trips with my pickup truck.

And it hurt, it really did.

My wife said that I should leave all the packing and box moving for the movers. But I could not do that.

‘Cause when a Texan fancies, he’ll take his chances, chances will be taken, that’s for sure. (I’m quoting from the song “London Homesick Blues” by Gary P. Nunn.)

Bigger in Texas

Thankfully, we’ll be staying in the Metroplex, the terminology used here for the Dallas-Fort Worth metro area, which is gargantuan in size, 9,286 square miles of total area.

Yes, you read that right. It’s bigger than Rhode Island and Connecticut combined.

The 2014 official estimate U.S. Census has the Dallas-Fort Worth Metroplex at 6,954,330, making it the largest metropolitan area in the South and the fourth largest in the country.

The Metroplex added more than 131,000 people from July 1, 2013, to July 1, 2014, and the area’s population has grown by more than one million since the 2000 US census.

If the good news is that we are staying in the Metroplex, the bad is that moving, no matter how you cut it, is a royal pain in the petute. (I don’t think you need a definition here.)

Which got me to thinking about companies and how moving for them is also a difficult and even painful decision, which is the primary reason why my consultancy exists.

When you get down to it, some of the very same factors that are involved in a residential move so too are important for corporate site selection.

Proximity Matters

When we started looking for a new home, my wife wanted to be a closer to her place of work. Our new place is about one mile from a north/south interstate and less than a mile from an east/west interstate highway.

It is now about 10 or 15 minutes from her office, whereas before she had an hour commute via mostly toll roads.

Now she will have no toll roads for her daily commute and there will be lower fuel costs because of the shorter distance traveled.

Transportation costs, particularly for manufacturers moving products, can be a huge cost and is often not given proper consideration in factoring optimal locations in the site selection process.

Thankfully, I have a logistics expert on our team who can do the cost analysis on transportation, which we typically employ on finalist locations.

Taxes Matter

It just so happens that our property taxes will be lower in our new location in comparison to our former location. There are a lot of towns and cities in the DFW Metroplex. I have seen the number 71, which is astounding, but I believe it to be true.

Texas has no state property tax. (Nor state income tax.) The Legislature has authorized local governments to collect the tax. The state does not set tax rates, collect taxes or settle disputes between you and your local governments.

Again, at our new home, 15 miles away from our former home, we will be paying lower property taxes, which was a certainly a factor or an added plus during our residential site search.

Property taxes, and an assortment of other taxes, are typically of importance for companies considering a new location for operations, because they effect the bottom line and the cost of doing business.

An excessive tax bite has often prompted companies to move operations from one state to another. General Electric, along with Aetna Inc. and Travelers Cos., have of late decried the higher taxes in Connecticut.

Trust me, this is how you lose companies.

Energy Matters

I cannot say that utilities and energy costs were a big consideration for us during our home search in the Metroplex, but I can tell you that my wife, being the good steward that she is, insisted that we choose an electric utility that gets a big part of its energy load from renewable sources. And she chose accordingly, as she had that option here.

Energy costs, particularly for manufactures, can be a tremendous cost, so due diligence is required in a location analysis to determine how much they will be paying via the electrical load that they will require.

Many utilities offer complicated rate schedules that will have your eyes glaze over, when you just simply want a comparison number to go by.

Leave it to say, the costs per kilowatt hour (kWh) in this country can vary by a lot, from less than five cents per kilowatt hour to more than 50 cents, in the case of Block Island in Rhode Island, where the nation’s first offshore windfarm is now under construction.

Neighbors Matter

When we were looking for our new home, the condition and the feel of the neighborhood was important to us as was the demographics of the place.

We are not elitists, but neither do we want to live in a neighborhood plagued by crime and poverty, even if the real estate deal may be exceptional.

We knowingly paid more for our place because of the place and the fact that it is truly a seller’s market in the Dallas-Fort Worth area with the influx of people coming here and the limited inventory of residential properties for sale.

But the point is that we wanted to live in a neighborhood where we would feel comfortable and truly make it a home.

Companies are the same way. Most will want to be there for the long haul and want to gauge a community by its corporate presence and the neighbors that it will keep.

Property Matters

Some companies will knowingly pay more to go into an upscale business or industrial park, because they want that setting, particularly if customers come calling.

The last thing a company typically wants is building a nice corporate campus across the street from a junk yard or neighbors that are not conducive to the image that the company wants to portray.

And while companies look for characteristics of a labor draw for its future workforce in terms of quality and quantity, we, too, were looking at the human component in the neighborhoods where we were conducting our personal home site search.

A Specialist Matters

Finally, we employed our own site selection consultant to help us find what we were looking for. Tommy Lankri is one cool dude. A former Israeli Army sniper, this guy is driven. He helped us not only find the property we were looking for, but he proved to be the tough negotiator that we wanted.

I’m telling you, first-generation immigrants to the country always work harder. Tommy has already done astounding things and he will sure to make it big.

But the point is that my wife and I hired a consultant, a Realtor, to help us with our home site selection process. We had sense enough to know that we had gaps in our knowledge and needed that specialist for help. (And those professional movers were of big help, too.)

Which is the very same reason why companies should hire site selection consultants to do their location analysis. Companies know what they do, that’s what they are an expert in.

But they don’t know what they don’t know. They don’t know the many factors and intricacies of site selection, which is precisely why they should, and here is my shameless plug, hire Barber Business Advisors for that.

We can help and save a company time and money in the process, alleviating some of the pain that goes with a move.

In Memoriam

Ted Levine, founder of Development Counsellors International (DCI) passed away last week.  He was 89.

Ted founded DCI in 1960, when it was the only firm specializing in economic development public relations and marketing in the U.S., probably the world.

I did not know Ted well, but I liked him immediately when he offered me some valuable critiques to some of my early blogs. I could tell that he had great wisdom.

His son Andy took over DCI as president a few years ago. I see him as a chip off the old block, a standup guy just like his dad.

Lord, I wish we had more people like that in business today.

I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a location advisory and economic development consulting firm. OUR NEW ADDRESS is 2736 Golfing Green Drive, Dallas, Texas 75234. Dean can be reached at dbarber@barberadvisors.com or at 972-767-9518. If you liked what you read here, invite him to speak at your next meeting.

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  1. Reblogged this on Barberbiz and commented:

    Believe it or not, I’m still putting my home together. Just think what it is like for a company.

    I’ll have a fresh blog next week on the hows and whys of a SWOT analysis that we’re doing for a community. Have a good week. — Dean

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