HOT cities

Entrepreneur, Oct, 1999 by Mark Henricks

SMART MOVES FOR ENTREPRENEURS ON A QUEST TO FIND THE PERFECT LOCATION

To be in the right place at the right time - it's the ultimate goal of any industrious entrepreneur. Contrary to popular opinion, we've found this elusive goal may not be a matter of random luck. In fact, we have a radical theory: The right-place, right-time element can be predicted, even orchestrated. With this proactive hypothesis as our basis, we present Dun & Bradstreet and Entrepreneur's sixth annual ranking of the top cities in the nation for entrepreneurship.

As you'll see, there are actually a bunch of right places for entrepreneurs - not fantastical utopias, but down-to-earth, well-within-reach cities like Phoenix/Mesa, Arizona, and Raleigh/Durham/Chapel Hill, North Carolina. (Well, OK, the sometimes fantastical Las Vegas and Washington, DC, did make our list.) In fact, we provide a closer look at our top-ranked city, West Palm Beach/Boca Raton, Florida, to illustrate the power of an underestimated city. While the less imaginative may move to New York City or Los Angeles, you just might find your own place in the sun in the booming, albeit less-publicized, "Treasure Coast."

We've also operated under a separate, though related, theory: The right place for your business is not necessarily the place you're in right now. If you're serious about being in the exact spot where opportunity flings open its doors, you may have to do some traveling to get there. We understand this ranking can lead to something as insignificant as a nice daydream, or to something as important as a complete business overhaul and subsequent massive success. We also understand "relocating" is a pretty scary word. To help spur you to action, we've dissected the art of moving and found four relocated entrepreneurs willing to share tales of their own moveable feats. The rest is up to you - will you be in the city that's best for you, or simply wish you were there?

MOVING AHEAD

For countless entrepreneurs every year, the grass on the other side of the fence looks greener. So they pull up stakes and move to a new place, where they hope to find better odds for business success than they have in their current location. Some find what amounts to an unspoiled meadow, while others discover they've landed in the entrepreneurial equivalent of the Dust Bowl.

The U.S. Census Bureau re ports that approximately 40 million Americans relocate each year. The U.S. Postal Service processes about 38 million change-of address forms annually as well. Although no one keeps a similar count of business moves, given the multitude of valid business reasons for making a move, almost any entrepreneur will, at some time, at least consider the possibility.

WHAT'S YOUR MOTIVATION?

Businesses commonly cite five main reasons for moving, according to Sharon K. Ward, an economic development consultant for Pennsylvania Power & Light Inc., a utility company in Allentown, Pennsylvania, and co-author with her husband, William Gary Ward, of the Company Relocation Handbook (Oasis Press). These are labor and work-force issues, the desire to reach new markets, the need to upgrade facilities or equipment, a desire to lower costs or increase cash flow, and considerations about the quality of life. For different businesses and at different times, certain concerns are more important than others, Ward notes. But just about all moves can be attributed to some combination of these issues.

Chief among current reasons for relocation is the need for a suitable work force. Unemployment rates are lower than they've been in decades, and the shortage of workers in some occupations, especially those requiring technical expertise, is acute. For firms that need specialized employees, it may be well worth it to relocate to an area where they can easily find these kinds of employees.

The need to reach new markets is another prime consideration. Luigi Salvaneschi, a former executive with KFC, McDonald's and Blockbuster Video, and author of Location, Location, Location (Oasis Press), says a location that taps a new market can instantly revitalize many businesses. "People should relocate if they see no growth and no future where they are," he says. "It's a matter of life and death."

When a company finds itself in outmoded or undersized facilities, that's another reason to look at moving. Most businesses start in a small facility, such as the founder's garage, then move to bigger quarters in the same city, says L. Clinton Hoch, director of location advisory services for DCG Corplan Consulting LLC, a site selection consultancy in West Orange, New Jersey. Later, the business outgrows that location or begins to find fault with its facilities, services, utilities, infrastructure or other features. "Usually only after [a business owner] goes through those three stages is he or she ready to make a move out of the original metropolitan area," says Hoch.

Cost is a concern in any business decision, and a move can cure - or create - many cost issues. For starters, the cost of living varies widely among cities. In Little Rock, Arkansas, for example, the cost of living is 13 percent below the national average. At the other end of the spectrum, New York City's costs are more than twice the U.S. average. Theoretically, a move from Manhattan to Little Rock could yield significant savings.