If You Go Greenfield, Where is the Right Place in the United States to Invest?
10 Questions for inbound U.S. investors
Question 4 - If you go greenfield, where is the right place in the United States to invest?
The many government jurisdictions, economic zones, land types, and even climates within the United States can make investment location a complex puzzle.
Simply listing the factors to consider can be dizzying.
- What transportation networks will you need to use, and how far can you be from suppliers, customers, or your own affiliates?
- What are the costs of real estate, infrastructure, and energy?
- To what extent will governmental authorities tax your investment – or incentivize it with grants?
Then there’s talent:
- Where can you find the skills you need at rates that satisfy both your budget and the local cost of living?
- What rules govern unionization in the state you’re considering?
Right place - three axes
This is a job for systematic analysis. Consider each candidate location along three axes.
- One axis measures operating costs, such as labor, transportation, utilities, real estate, and taxes.
- The second captures your assessment of business conditions, ranging from scalability and sustainability to market access, regulatory burdens, and whether you’re a pioneer.
- And the last axis? That’s for wild cards like politics, the health of the economy, and potential natural disasters.
Using a system like this, you can assign an aggregate score to each option to facilitate your decision process.
Questions behind the questions
- What physical factors may tie you to a certain type of location, such as navigable water, special talent needs, or growing conditions?
- Will you be going it alone, or should you work with a partner?
- What elements of your business plan could you have to abandon or adjust if you were forced to adopt your fifth choice of location?
Do it now
Try the three-axis exercise (cost, conditions, and risk) for a U.S. location you’re considering for greenfield investment. What factors surprised you? Which ones were you unable to learn without paying for research?
Continue reading, "10 Questions for inbound U.S. investors"
|Question 3: Making an acquisition|||||Question 5: Tax considerations|