Many large companies and even international conglomerates have announced in recent years that they are moving their headquarters to a new location. Some, such as Burger King, have moved to a new country. Others, including GE, have relocated to a new state. This move can be an expensive and stressful endeavor, but the upside associated with making such a huge transition is often substantial for the company as well for its employees. In fact, many companies that have relocated headquarters have been able to take advantage of a combination of significant benefits.
1. Reduce Taxes
The United States is known to have one of the less attractive tax environments for businesses, because of a high corporate tax rate. While some companies are moving out of the United States to reduce taxes in this way, others are moving to a new state for the same reason. States tax corporate income differently, and some states and cities also offer credits and other financial incentives for businesses. For example, Indiana, West Virginia and Kentucky are some of the states that offer corporate tax breaks when companies relocate into their states.
2. Save Money
Taxes are only one expense that can change when a company relocates its headquarters. Utilities, logistics, real estate and more are all major expenses for most companies. Some areas have much higher expenses than others, and moving headquarters even a few hundred miles away can save a company a substantial amount of money in some cases.
3. Strategic Growth
Companies that need more capital to grow strategically may take advantage of financial savings related to a relocation to fund their growth plans. In addition to this aspect of strategic growth, keep in mind that corporate image may be impacted by where the company is located. This is also critical to the company’s overall growth in years to come.
4. Access to a Larger Pool of Skilled Labor
When a company relocates to a new area, Great Guys Moving (greatguyslongdistancemovers.com) points out, it may have access to a larger pool of talented, trained and educated individuals. Also, when the company is located in a desirable area with a great climate and low crime rate, it may be easier for the company to retain top talent. When a larger pool of talent is available, the company may be able to pay lower wages in some cases.
5. Address Logistical Challenges
Shipping costs can cost a small fortune for some companies. The location of the company will impact the types of shipping services available and their cost. It can also impact how long it takes for finished goods to reach the marketplace. These logistical factors can affect cash flow as well as customer satisfaction with the goods.
Each state has its pros and cons for businesses. In some areas, however, the benefits far outweigh the drawbacks. In these states, corporate growth is substantial, and this can benefit residents in the state as well as the overall state economy. Remember that many companies that decide to relocate do so because of an overwhelming combination of benefits.