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Why companies relocate

  • December 14, 2012

Why companies relocate

Location might be the most important key to success in the business world. Companies rarely stay in the same headquarters long-term and constantly seek new facilities that are more conducive to their goals. There are many reasons why an enterprise would consider packing up its offices and moving out of state or down the street to another building.

Incentives
Many state and city governments offer financial incentives to companies to move. Businesses are given tax breaks if they create a certain number of jobs or have some of their moving costs covered by public funds. The Houston Chronicle writes that smaller enterprises benefit greatly from receiving relocation grants that reduce expenses.

Expansion
Start-ups often don't keep their original headquarters because they've grown too large. Small buildings lack the space and resources to support large groups of new hires on top of existing employees. As a result, owners will look for larger facilities and sometimes seek to buy or build dedicated headquarters so they don't have to compete with others for space.

Customers
Sometimes the simplest method of attracting customers is being in their local area. Businesses frequently move to new cities where they have dedicated followers. Additionally, companies will sometimes move to markets to reach new consumers. The Houston Chronicle notes that being near clients allows businesses to quickly track purchasing habits and trends.

Employees
It's difficult for companies to attract new employees from inaccessible locations. The inability to bring in additional staffers can hamstring growth and lead to a stagnation period. The Wall Street Journal recently reported that many tech companies have relocated to large metro areas in an effort to find new workers because many job-seekers don't want to move to rural and suburban locations.

Consolidating
Some large businesses have multiple branches in various cities, which can be a nightmare for managers who track how the resources are allocated. As a result, owners choose to consolidate their companies by moving everyone into a single facility. This strategy also promotes cohesion by making inter-office communication easy for employees.

Competition
Competing businesses tend to be in close proximity. Companies that work within the same industry are often in the same areas because there's a large pool of potential employees and resources are easily accessible. Moving closer to another establishment also makes monitoring the competition easier than staying far away.

 

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