The Best Place for Your Business

Instead of agonizing over competing studies, you need to decide exactly where your particular outfit will prosper. Here's how

by Jeffrey Gangemi

When Kevin Oldenburg, co-founder and president of MatriCal, a small pharmaceutical technology development company, was looking for the permanent home for his business in 2001, he first considered Los Angeles, Boston, and New Jersey. But he eventually chose Spokane, Wash., which happened to be the hometown of his co-founder, Dan Roarke. The city had recently named a district in town the Terabyte Triangle, creating office and laboratory space -- and accompanying widespread broadband access to go with it -- designed to attract tech companies like Oldenburg's.

In the end, Oldenburg says he moved his company to Spokane, a small city of about 200,000 people, for the quality of life and low cost of doing business, not for any incentives package the government was offering. "We had the choice of settling where we could be close to our customer base, but we chose Spokane for the proximity to highly-skilled workers from the area universities, the proximity to an airport, and for the low cost of living and operating here," says Oldenburg.

Despite attempts by communities to lure entrepreneurs with incentives, it's often a mix of other factors -- including family ties and the size and geography of a place -- that determines where today's entrepreneurs will ultimately set up shop. Only then do they look at the entrepreneurial climate, which is often subjective and hazy at best.

NARROWING YOUR SEARCH.

So what makes the ideal nest for your particular business? The answer starts with you. Why are you moving in the first place? Are you dissatisfied with your current enterprise, feeling the pull of low-cost rural living, or are you just sick of city life and want to live where you can enjoy the great outdoors? Or perhaps you're opening a business that would thrive in a big city, with a niche market. Now's the time to ponder these lifestyle questions, as the answers will help to narrow your search.

Assuming you're like most entrepreneurs, your motives may be a mix of all of the above. If you're sitting on the next eBay, you may want to hit an entrepreneurial hotspot, like Boulder, Colo., or Austin, Tex. -- or even Silicon Valley. But remember that even though entrepreneurship is a way of life in these places, a high cost of living is, too.

If you want to be an entrepreneur but don't yet have an idea as to what you want to do, consider areas with strong incentive packages. Some places may even have a specific business in mind and will make it worth your while to bring it to them. For instance, if you're thinking of opening a grocery store, consider Louisville, Ky., where entrepreneurs who open a store in a needy area get a forgivable $50,000 loan as part of that city's Corridors Of Opportunity in Louisville (COOL) program.

FINDING CUSTOMERS.

But be sure to completely understand the package a place is offering, since incentives are notoriously difficult to pin down, especially when it comes down to which government agency is responsible for what incentive.

Assuming you know what business you want to start, remember that not every entrepreneurial venture is created equal. The most common small-business categories are manufacturing, service, technology, and retail, and what's essential for one company is just a nice perk for another.

For instance, many tech companies could flourish in a cave in Tibet, as long as their broadband Internet access is dependable. A retail hardware store, on the other hand, may be running on dial-up, but as long as they're on the corner of Main and Maple, they've got a fighting chance at success.

You can't run a business without customers, so you've got to determine who they are and find them. "Whether you're in NYC or a small town in Kansas, you have to get a sense of what types of people live where, where the movie theatres are, what the grocery store is like, and where people go for fun," says Amini Kajunju, the executive director of the Workshop In Business Opportunities (WIBO), a New York-based organization that helps entrepreneurs learn the fundamentals of starting a business.

NET RESOURCES.