Increased optimism, new business priorities

Unsteady economic conditions have forced widespread reconsideration of what matters most. Individuals and families have made tough choices relating to household expenses and lifestyle. Companies have adjusted their business practices to be competitive in today’s evolving marketplace.

All operational aspects have been scrutinized as part of that process. Everything from building design to process efficiency to facility location has been considered in the interest of gaining a competitive advantage. In some cases, that means better positioning to seize market share during tough economic times. In more extreme – and unfortunately, not uncommon – instances, companies are fighting to stay in business.

Every year, Area Development magazine surveys corporate executives about their business plans. The survey delves into how current economic pressures impact priorities. The magazine concluded from its most recent survey that, “The economy’s gradual recovery during 2010 has resulted in increased business optimism, a rise in new facility plans, and some changes in site selection priorities.”

A few additional noteworthy observations from the survey:

Focus on product. Nearly three out of four new facilities will serve a manufacturing, warehouse or distribution purpose.

Job growth is modest. More than three quarters of new domestic facilities will create fewer than 100 jobs, although at 77 percent that number represents a slight improvement over last year’s 80 percent.

Get goods to market. Cost effectively. Highway accessibility traded places with labor costs as the most important factor, but both are still among the three top considerations along with tax exemptions.

Think sustainably. Sustainable development is on the rise. High numbers of executives are making energy-saving modifications to existing facilities (85 percent), recycling or reusing waste products (59 percent), changing supply and distribution methods (28 percent), and seeking LEED certification for new or existing facilities (23 percent).

Market reactivity desired. Shovel-ready or pre-certified sites, which speed the development process, were cited as important nearly half the time.

Clustering matters. Businesses generally want to locate near others involved in similar activities.

Companies turning to programs that support business growth

Access to business incubators and other resources that support business development is an important consideration for any company. Such organizations and programs are valuable sources of grant money, knowledge, low-cost space and other benefits.

In the case of grant funding, the money can be used to jump start production that leads to increased revenues and creates jobs. The Sirti Foundation, which helps business-assistance agency Sirti to accelerate growth of technology-based companies in the Inland Northwest, is one such example. The privately funded tax-exempt entity recently awarded $1.5 million from its Energy Innovation Fund to:

• Demand Energy, which is developing distributed electricity storage devices and network management software
• Great Northern Spokane for a geothermal heat pump demonstration project
• Greenwood Clean Energy in support of enhancing EPA-approved biomass boiler manufacturing
• NuElement, Inc., a company commercializing bio-aviation, fuel battery extender auxiliary power unit
• WISErg Corporation, which is using an anaerobic digester to derive bioresources from municipal organic compostable materials

Sirti, an agency of the state of Washington, is a collaboration of business, higher education and government to accelerate the development and growth of technology-based companies in the Inland Northwest.

Workforce resouces can be invaluable

An educated, skilled workforce from which to draw is important to companies looking to attract and retain the best talent. Proximity to higher education institutions makes a big difference in the location decision, especially when they are clustered in a desirous area where students can enjoy a lower cost of living. It really becomes advantageous to companies when those colleges and universities work together to produce graduates in high demand fields, such as computer science and engineering, and support small business development through incubator programs. State universities in particular are turning out the best workers and often providing incubator space that is a tremendous asset to entrepreneurs and start-up businesses. Learn more in this interview.

Follow careful process to evaluate relocation options

Relocating a company involves much more than finding affordable, available real estate for a new location. Companies considering relocation have a lot at stake and should take their time making a decision – whether they ultimately stay or move. Ongoing operating costs have to be considered as well as key employee retention. Following a carefully laid out process will produce the best results.

Get to know each other. Spend time getting to know a community and what it has to offer. Companies should expect to be visited a couple dozen times by community representatives as part of the information gathering and diligence process. This allows both sides to determine if it is a good match.

Compare costs. Communities should be upfront about the cost of doing business and willing to compare them against several other locations if necessary. Typical comparisons include basic bottom-line considerations, such as workers compensation, labor costs, utility rates and unemployment insurance.

Consider key employees. Small-to-medium-sized businesses, especially manufacturers, have key employees they need to be successful. Identifying those key employees and involving them in the relocation process is a big issue. Some companies bring key employees on community visits and site tours to gain their input and buy in.

VIDEO: Impact of state budget crises on the relocation decision

Companies may not be moving, but they are planning. Businesses often take up to three years to consider locations, evaluate what each has to offer and make a decision. How states handle current budget challenges is being watched closely. The outcomes will prove telling to companies considering another state.

When companies do relocate, they’re going to move to states that can manage their budgets. They will look to minimize future state budget uncertainties. The state of Idaho as an example balanced its budget without a tax increase – and it didn’t take them forever to do it. The state of Washington is getting its budget balanced while looking for tax cuts, so it isn’t going to be a burden for the business community. Companies are going to look for states that can do that. Learn more about relocation decision factors in this interview.

New office and technology campus

Manufacturing and technology companies looking to expand will receive a boost with the conversion of a 250,000-square-foot building in Liberty Lake into a multi-building campus. Full development of the campus will allow up to 700,000 square feet of office and manufacturing uses with up to 4,000 jobs. The existing building includes about 65,000 square feet of upper-level office space that could accommodate a large employer or be divided into smaller office spaces. The main level has approximately 80,000 square feet of space suitable for manufacturing, research and development, distribution or warehouse use.

The 70-acre campus will be known as the Meadowwood Technology Office Park. It will include a mix of owner-occupied and leasable facilities.

Welcome to Inland Northwest Economic Developments

Welcome to the official blog of the Inland Northwest Economic Alliance! Here we will explore what makes the Inland Northwest (the region spanning northern Idaho and eastern Washington) a great place for business. We will discuss what makes businesses in our region successful – from low business costs to a skilled and committed workforce to a distinctive, affordable quality of life. Along the way we will share stories of businesses that have prospered after relocating here.

The Inland Northwest Economic Alliance (INEA) represents 10 regional economic development agencies covering 14 counties in northern Idaho and eastern Washington. The collaborative effort is aimed at building economic growth by showcasing the Inland Northwest, its communities, and its business value.

My role as the INEA’s chief recruiter is to help identify businesses that can benefit from the advantages of working in the Inland Northwest. I help them determine the bottom-line impact, and assist them through the relocation process. Some might call my approach ‘traditional’ or even ‘old-fashioned’ – but I know one thing. Today, more than ever, business owners are looking for value and every advantage to survive and thrive in this reset economy.

That process has been featured in the book The Potter Principles (Amazon.com and BarnesandNoble.com). The book, authored by Jeni Forman, is a step-by-step guide to the process that helped me successfully bring more than 75 companies to the Inland Northwest. Those companies found business value and opportunities to grow in eastern Washington and northern Idaho.

We look forward to sharing with you what makes the Inland Northwest such a wonderful place to live, work and play.