Why engage a location adviser? Featured

7:00pm EDT November 24, 2006

When a company makes the strategic decision to relocate, expand or consolidate operations into a new location, it faces challenges and decisions that are beyond the scope of the normal conduct of business.

Effective site selection is a complex undertaking that requires extensive data analysis, planning and execution for a successful outcome. To safely navigate in these waters, many companies choose to engage a location advisory firm.

“The stakes are high and so are the possibilities for less-than-optimal execution,” says Dolores Seymour, managing director of Industrial Services at Colliers Arnold. “An experienced location adviser can guide corporate executives in making logical, defensible and successful decisions, with the assurance that they have not overlooked incentives worth millions of dollars to their bottom line.”

Smart Business spoke with Seymour about how a location adviser can design and implement a relocation plan and how a company can remain focused on core business issues throughout the process.

What crucial areas of relocation can be overlooked without professional advice?

Government incentives and tax savings can be overlooked or not realized to their fullest extent, leaving money on the table. Demographic data can be misinterpreted, leading to confusion at best or a bad decision at worst. Competing internal politics can lead to a subjective decision that does not enjoy full support within the company.

To plan well, the company must understand the labor market, the business climate, the incentives and real estate availability, as these factors apply to their specific needs.

How does a location adviser add value to site selection?

There are the obvious ways, in terms of financial gain and tax savings. Perhaps of equal importance is the fact that the location adviser works through an objective and well informed process. He or she conducts a needs analysis that helps the company understand the key issues and location drivers. In most cases, going through the process helps a company focus on its real objectives and key issues, which makes the relocation or expansion succeed fully.

If a company is planning relocation or a new facility, it is often a strategic move where confidentiality is critical. They may be moving into another market to challenge competition or increase sales. The adviser can maintain anonymity for the client while performing studies and negotiating incentives.

What types of companies would most benefit by working with a relocation adviser?

The range of companies that will benefit goes from those engaged in manufacturing to high-end regional offices for service organizations. If they are not experts in real estate, site selection, demographic analysis and governmental incentives, and if they do not have excess internal staff who can dedicate their time to a relocation project, they benefit enormously from using an adviser. Most companies have found they are most profitable when they concentrate on their core business.

What additional resources do advisers bring to the table?

Location advisers have up-to-date and multiple computer and database technologies. They are experienced and can customize the search to reflect a company’s real objectives. Clearly, if your core business is analyzing and locating sites and understanding government incentives, you have more experience, tools and staff to devote to that task than if your business is manufacturing computer parts.

A larger real estate organization with a global affiliation of independently owned real estate services firms is able to provide expert local real estate knowledge, so it can implement the consulting advice with local and direct site selection and negotiation.

Is relocation consulting cost-prohibitive or can it actually reduce the final costs?

Perhaps I can best answer with an example. One relocation expert was working with a company whose controller thought that $300,000 would be his best incentive on a manufacturing relocation in the U.S. The expert identified opportunities he was not aware existed. As a result, they were able to negotiate a package of $3.6 million in incentives and grants. The consulting fees are very reasonable and provide clients with a great deal of value for the money.

Can a relocation adviser work within the company to lessen any internal politics that might arise due to differing needs and opinions?

The adviser is in a position to challenge all of the client’s assumptions and to help prioritize issues, so that the outcome will be logical and defensible to the board, employees and stockholders. He or she can maintain confidentiality internally to elicit the most accurate responses without creating conflicts.

DOLORES SEYMOUR, MCR, CCIM, SIOR, is managing director of Industrial Services at Colliers Arnold. Reach her at (813) 221-2290 or DSeymour@colliersarnold.com.