Where should my business be located?
Geography is destiny. This is as true in business as it is in geopolitics and economics. Based on our experiences starting Qore Performance®, I've assembled this list of some of the most important things to consider when it comes to where to locate your business. This list is not designed to be exhaustive, but rather get you thinking in the correct direction and asking yourself the right questions to help get you on the path to success, at least geographically.
1. Geographic fit
This is the business headquarters version of what MBA-types refer to as "Product/Market Fit." The basic question is: "How well does your business fit the local geography?" For example, it would probably be unwise to locate a surfboard company in Sparks, NV or a snowboard company in Miami, FL.
At first glance, it might appear that Qore Performance® should be located in Phoenix, Dallas, Fayetteville or Twentynine Palms because all of these cities either have long, intense hot seasons, are adjacent to large military installations or have thriving business communities.
While our flagship product, IcePlate® Curve, is mostly known for hot weather performance enhancement and environmental inoculation, it is also incredibly useful in cold weather. Our IceVents® ventilated padding for plate carriers and duty belts are also year-round products which need testing in both extreme hot and cold weather as well as arid and humid climates. IceShield Plus, our plate carrier hand warmer with a Level IIIA soft armor insert, also needs extreme cold weather for ongoing development. The adaptability of our IceAge Ecosystem means that we need a climate that gives us four distinct seasons. As it turns out, Virginia/Tennessee/West Virginia are excellent climates for us. With hot, intense and humid summers, Virginia/Tennessee/West Virginia gives us great testing environments for our IcePlate® and our IceCase line of cooling/heating iPad Cases. Our winters are cold and windy, creating ideal development environments for our IceShield and TCCC Base Layers. With the Appalachian Trail just a short drive from our office, we have ample testing grounds for our SPORT line for outdoor enthusiasts.
Geography is an important consideration for your business. Make sure you consider geography for where you are today and how it fits into your vision for the future of your business.
2. Talent pool
When you are first starting your new business, the thought of building out a 10-20 person team, let alone 500+, over time can feel overwhelming. While it is impossible to know when you'll need to start hiring with any frequency as your business scales, you need to plan on being successful. As such, you need to think about the long term viability of a local talent pool. For example, if you are design focused business, you will want to have ready access to design talent. Think about places like Los Angeles, Orange County, Savannah, Austin and New York. If your business is heavy in manufacturing, you'll want to think about things like trade schools (far more valuable than four-year colleges and universities in today's skills-based economy), strong community college programs and the presence of other large manufacturers nearby who will produce alumni talent pools and spin-off/ancillary industries which may support your business and/or your supply chain.
In Virginia/Tennessee/West Virginia, we have the benefit of close (in recruiting terms) proximity to a theoretically incredible array of four-year schools. Unfortunately, most students coming out of four year schools today are not well prepared for the modern workforce. This is especially true for a technology-heavy design and manufacturing company like us. I've conducted almost 200 interviews from 2020-2021 alone. We have found that graduates of modern four-year colleges and universities have zero competitive advantages over their non-college educated peers who have spent their time acquiring valuable skills like Adobe Creative Suite, Fusion360, video production, CNC Machining, tool construction, fabrication, etc. In short: practical, real-world skills and experience are more valuable than theoretical knowledge.
The situation with four-year college graduates is far worse than having zero competitive advantages over their non-college educated counterparts. In our experience, college graduates are actually far LESS skilled than non-college educated graduates. In short, college graduates are burdened by the yoke of academia that is long on opinions and short on practical, real-world experience they can pass on to their students in the form of marketable skills. This makes graduates of four-year colleges and universities more expensive for us because they are a greater risk. They have no real skills and require more training.
Northern Virginia's proximity to Washington D.C. is a liability when it comes to recruiting talent for vertically integrated creative companies like ours. The Washington D.C. area is great for recruiting lobbyists, lawyers, accountants, consultants and people with political aspirations. However, it isn't great for building a private sector start-up with disruptive ambitions. The mindset of those attracted to the Washington D.C. area is institutional in nature and far less agile than what a disruptive startup needs.
Unfortunately, my own alma mater (George Washington University), Georgetown, UVA and George Mason (to name a few) have not yielded great results for our company. Other schools like Virginia Commonwealth University have been a huge time suck with a faculty and students who come to interviews unprepared. Our recruiting focus going forward is going to be on graduates of online high school academies and local high schools around our office with technology-centric skills.
3. Cost of living
This is important for you and your company as you build out your team. You'll want to look at some basics: housing prices (apartment rental and single family), energy (gas, electricity, renewable), car insurance, home insurance, property taxes, state income taxes, sales tax, public transportation and food to name just a few. You don't need to do an exhaustive analysis, but all of the factors listed here are easy to check and take about 30 minutes or less per city.
Tennessee/West Virginia present an incredibly competitive package in terms of cost of living for a startup or new business. Virginia property taxes are not low like they can be in some states like West Virginia and South Carolina, but they aren't high either like they are in New York, Illinois and Texas. Virginia sales taxes are among the lowest in the nation. Virginia housing prices, while higher than places like North Carolina, Texas, Arizona and Tennessee, are lower than places like California and New York. Utilities and gas in Tennessee/West Virginia are also reasonable and very affordable. Overall, Virginia/Tennessee/West Virginia scores well in terms of cost of living in every area except housing, personal property taxes (the dreaded "car tax") and food.
4. State and Municipal Environment
BLUF: avoid places like Loudoun County, Fairfax County, Arlington County. Avoid anything in the following states: California, New York, New Jersey, Illinois, Maryland, Washington D.C. You want to look for places like Collier County, Phoenix, Mesa, Tempe, San Antonio, Knoxville, and Jacksonville.
The regulatory environment in places like Fairfax County is oppressive. The bureaucracy in Loudoun County Virginia is untenable and serves only to hinder businesses. From the Fire Marshal to building permits, Loudoun County and Fairfax County are two of the most adversarial municipal regulatory environments I've encountered in my career...and I spent the first 10 years of my career in California!
Florida, Texas, Tennessee, and West Virginia are excellent places to start a new business. With a pro-business disposition, these states are forward-thinking and genuine. They take a real interest in helping your new business succeed. They assign representatives to your company who actually check-in on you with regular, scheduled calls and visits. I only wish we had started our business in one of these states!
It is important to match the transportation strengths of your local area with the type of company you want to build. A quick search will reveal some basic statistics on the amount of time people spend in traffic in any given city or Metropolitan Statistical Area (MSA). Time in traffic is not the only important consideration. Pick a place that has transportation that matches the type of company you are. For example, if you are an outdoors-focused company like Qore Performance®, you'll want to pick a place that makes it easy to drive, hike, run or ride a bike to the office. This is most important for your team members and least important for your Co-Founders/CEO. If you are starting a business that is a better fit for urban/city dweller types, then you'll want to pick a place with good public transportation. An ideal business location also has few if any toll roads and multiple routes to the same destinations to serve as congestion alternatives.
Light rail can be important if you have a particular city pairing with unusually high utilization like any combination of Washington D.C.-Philadelphia-New York or San Diego-Los Angeles.
Airports are also incredibly important if you are running a business that is national or international. The importance of a great airport cannot be overstated if your business is more than regional in reach. If you do most of your business internationally, then you'll want to be close to a major international hub with nonstop service to the destinations that are most important for your business. IAD, ATL, LAX, SFO, SEA, DFW, IAH, MIA are all great options. In other cases, your business might have regional flight needs like say Bentonville, AR or Huntsville, AL. In this case, close proximity to regional airports like DCA, AUS or BNA is important. Also consider the frequency with which you fly for your office location as airport transfer/parking costs can add up quickly in both dollars and hours.
6. Customer proximity
I probably should have listed customer proximity as number one on this list and number six. It is that important. Our location in Sterling, VA played no roles in quickly seizing on opportunities to be interviewed on NPR's "How I Built This" podcast with Guy Raz. One could assume that proximity to the White House, State Department, US Secret Service, Customs and Border Protection and Marine Corps Base Quantico would be an asset. It is not.
Fiber optic internet and utility grid integrity/reliability are vitally important in today's world, but often overlooked. Check out who provides internet service to your locations and do a thorough check of their customer service ratings and product offerings. This is one area where an ounce of prevention is worth a pound of cure.
Hopefully this business location checklist helps you to find the right municipality for your startup or new business venture. We'd love to hear what went into your decision and why in the comments below!
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