Site Selection

Site Selection

Site selection is a critical component to many business growth decisions. Many clients and referral sources ask, what is site selection and why is site selection important? Site selection is the consideration of multiple site location options and the analysis of a myriad of factors important to the successful operation of a business entity within that particular location. Parameters of site selection revolve around the factors influencing one location over another. These factors include variables such as workforce, community development, economic credits and incentives, tax burden, availability of suitable land and/or buildings, utility capacities, governing and political structures, and more. Quality site selection professionals will champion this process for clients, identifying those factors that are most pressing to the project and applying those factors to the final site selection options available to the client. Often, projects will have a very short timeline to meet and therefore qualified buildings are needed quickly. Professional site selectors are able to discern which site selection criteria for commercial or industrial buildings are the most relevant and then work with brokers, agents, government officials and other non-governmental officials to find the best fit options within the timeframe given. Site selection criteria for commercial buildings may include a certain range of square feet, appropriate utility connections to the building, or a certain distance from key transportation hubs within a region. It is the site selector’s expertise that synthesizes the facts available to them and quickly works to meet the business’ growth needs. The site selection process can be complicated due to the nature of so many variables, many of which can change with regularity. However, site selectors work closely with clients to alleviate the burden of this process and deliver the highest quality options to business stakeholders in order to meet the key business growth goals.

7 Factors To Consider In Site Selection

The site selection process evaluates many different variables to identify the best fit locations for a business’ growth goals. While variables may change, 7 factors to consider in site selection can include the following broad categories: workforce, utilities, available sites/buildings (inventory), governing practices and regulation (government), community features (community), tax burden and incentive programs (cost of business), and local market factors (business community). This site selection checklist of criterion is required to evaluate one location versus another in order to make an apples-to-apples comparison for future business activities. The appropriate information gathering, evaluation, analysis, and presentation of qualifying sites form the core principles of site selection. Workforce Analysis includes the in depth review of average wages, qualifying job titles, and labor shed of workforce into and out of the community. The quality, quantity, and cost of utilities play a significant role in many manufacturing clients’ site selection process. Site selection inherently considers a specific location and therefore the understanding of what sites or buildings are actively available is a primary factor in the site selection checklist. Understanding how governments help or hinder business growth within their jurisdictions through regulations, the permitting processes, and political policies is an important part of the site selection analysis. Community demographics, such as school systems, housing availability and affordability, major transportation services, and quality of life elements are all unique factors that can put one community as a prime location over another similar community. Site selectors also consider the cost of doing business within communities and any available incentives to offset those costs so that the best site selection recommendation is presented to the business. Finally, the site selection process reviews other businesses within the community for competition with the client, supply chain analysis, and other factors, such as union activity.

Site Selection Companies

Site selection consultants come in many different sizes and backgrounds. Some site selection companies focus on real estate transactions while others focus on investments and specific financial or industrial portfolios. Site selection consultants can be a part of a larger corporation, such as an accounting firm, legal firm, or real estate brokerage firm. Other site selection groups are much smaller, focusing on a particular section of the country with their local expertise. Some site selectors began their careers at a local economic development office and assist select companies within a specific region whereas other larger, corporate site selection groups have a national or international focus. National site selection companies can be found in major metropolitan growth markets as well as smaller cities. Site selection groups are led by top site selection consultants who are supported by a team of analysts and project managers who dedicate their resources toward identifying the best fit locations for growing businesses. Top site selection consultants demonstrate an ability to quickly discern what is most important to the client and then work swiftly to bring together as many data points as possible to make a best site selection analysis for future business growth. Many site selection companies offer significant financial and real estate analysis services. Site selection processes and checklists may vary, however, most site selection consultants assist businesses in evaluating factors like the cost of doing business in one location vs. another, workforce demographics, government regulations and policies, community demographics and unique features, and the presence of valuable credits and incentives. Site selection specialists must weigh all of these factors, evaluate them, provide analysis, and succinctly deliver the best options to clients for future business growth. While the specific project may require an alternative site selection checklist, most site selection companies will use the listed criterion in all of their project analyses.

Site Selection Methods

Site selection specialists often share a common set of site selection criteria. This site selection checklist most frequently includes the following site selection factors: the cost of doing business, workforce demographics, government regulations and policies, community demographics and unique features, and the presence of valuable credits and incentives. Site selection companies may use a variety of site selection methods to collect information on these factors. Site selection methods may include direct interviews of companies in a specified location to better understand the cost of doing business. Site selection professionals may send out a specific site selection checklist, request for proposal, or request for information (RFP/RFI) to select communities in order to collect the necessary evaluation criteria and make an informed decision on the best location. Site selection reports will often rank or measure multiple communities and their responses in order to synthesize the best location. This ability to collect, analyze, and discern the best location is what makes site selection so important to future business growth decisions. Without quality site selection methods and analysis, growing businesses may leave money or resources on the table or locate in an area that restricts their maximum growth potential.

Site Selection Example

The site selection process begins with a decision to locate a new investment. This could involve a new location or even an option to expand an existing location. In most cases, site selection decisions involve the analysis of location, timing, investment, number of jobs, and specific industry types. Not all industries are good candidates for site selection, though they may go through the same process as they consider strategic business decisions. A site selection example could involve a business entity, typically with an industrial use such as manufacturing, reviewing a site selection checklist of key decisions. For industrial clients, this site selection process evaluates the costs and potential savings of locating a business in one location versus another. The criteria that drive this site selection example, can include the cost of utilities, available workforce, and proximity to clients or suppliers. Site selection criteria can be different for residential building projects and other non-industrial uses, such as schools or even agriculture. Site selection in agriculture may focus more on the availability of needed acreage, while site selection criteria for schools may focus on the price of land and nearby population. All site selection analyses should weigh the variety of criteria and lead to a best location decision for the client.

Site Selection Magazine

Site Selection Magazine is the primary industry resource for site selectors, location advisors, and economic development specialists. This publication provides indepth reviews of state and local communities and the site selection benefits they provide to new clients. Site Selection Magazine offers rankings, reporting, and reviews of top performing locations across North America. Site Selection Magazine offers publications for individual states or even regions, such as Knoxville, TN, Southern Louisiana, or Las Vegas, NV that showcase the benefits of that community. Site Selection Magazine’s annual rankings for the best locations provide site selectors a good review of major attraction initiatives for top performing communities. Site Selection Magazine subscriptions support the reporting and analysis of these programs and communities can market their areas through a variety of advertising options. Site Selection Magazine offers rankings based on business tax climate, higher education research and development (R&D) expenditures, worker’s compensation index ratings, industrial power costs, and total revenue as a share of total expenditures. These factors help new businesses make a best decision on their future location expansion plans.