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Determining the ideal USA Business Location

From| February 12,2007

When planning to expand your business to the United States, you have to make a decision on where you are going to establish your physical USA business location. This article will give guidance through the large geographical dimensions within the United States and different circumstances, various USA business locations may have.

Your USA Business Location - Starting with the Basics
Deciding on your USA business location is a pretty long-term decision. Once you are set on a certain business place you are probably stuck for the rest of the life of your business at this USA business address. Even that there are exceptions to this; you should not plan to add a moving project within the first three years on top of all the other things you have to accomplish to make your business in the United States successful.

The United States are huge from a geographical perspective. Traveling from the East Coast to the West Coast by car is a five days trip. The continental states have a total of three hour time differences. So which one of the 50 states should be your headquarter? Where within those states could be your ideal USA business location? What USA office address should be on the business cards?

Setting up your business in the United States will be accomplished by a certain level of uncertainty. Still, when it comes to your USA business place, you should try to eliminate as much unwelcome surprises as possible. If you need to - for example - fly a lot, you should be aware of the distance from your USA office address to the next airport and what kind of airport that is. You can be sure that there will be enough situations left which will catch you by surprise and you should not find out that the next airport is a four hour ride away from your USA office after you settled down in the mountains of Montana.

In addition to general factors to determine the ideal USA business location (which will be listed below), you should try everything to get a business address within the United States which is likely to benefit the individual needs and characteristics of your business.

What factors should determine the "ideal" USA business location?
Factors which may influence your decision for the ideal USA business place could be for example any of the following:

§ Being close to your clients: America does have a lot of economic cluster with a high concentration of certain industries. The automotive industry for example has a large cluster around Detroit; the IT industry used to be concentrated in California and so on.

§ Cost of living: The overall cost-of-living does vary dramatically throughout different USA business places. This will definitely influence your total business expenses such as personnel costs (including your own salary), infrastructure costs and so on.

§ Tax situation and government control: Different states in the United States are competing for the best USA businesses by offering them tax breaks and/or less government control in how they can operate. Government control and Labor Union influence is for example far greater in California than in the state of Georgia ("right to work"-state).

§ Economic perspectives: The economic situation and outlook in single states you may look at, should have an important influence on the decision on your final business location. As with other factors, economic outlooks are varying throughout the United States dramatically depending on your USA business location. You probably decided to move your business because of the overall economic perspectives in the United States in comparison to your home country; therefore you should not pick a state where you wind up finding similar conditions as where you just came from.

§ Major airports in the United States: For many companies, doing business in the United States is characterized by a lot of air travel. If nationwide business is on your list, you should have your USA office close to a major national airport. Having such a convenient location can not only save money but also saves a lot of time and energy since those airports offer more direct flights to almost any city in the United States.

§ A "good" city name in your USA business address: When selling your products to clients nationwide in the United States and/or Canada, it is usually an advantage to have a location with the name of a big city in the office address. It could makes you and your business appear more professional if you are able to say that "we are based in Philadelphia" instead of "we are based in some little town you probably have never heard about, but we are close to Philadelphia". That does not mean that you have to have your office in the most expensive, fancy and representative part of a large city. Any location at the outskirts with a street address within city-limits is more than fine as long as you are able to keep the cities' street address.

§ Other Factors: You should easily be able to complete this list with additional points relevant to your business.

USA Business Location and Traveling - Do Not Underestimate Air Travel!
The largest airports in the United States are the so called "hub airports" of major airlines which are designed to serve smaller cities. Due to the nature of those airports, hubs will serve the highest number of cities and other hubs multiple times a day. There are for example around 30 flights being served every single day between Atlanta Hartsfield and Chicago O'Hare Airport (each way). If you need to travel and have the chance to get your USA office location established close to a hub airport, you will have the most convenient and cheapest options to get around all over the United States with ease.

The largest USA hub airports:

US Rank  Worldwide Rank      City                 Airport Code         Total yearly passengers   
1                   1                        Atlanta                         ATL                79 086 792   
2                   2                        Chicago                      ORD                69 508 672    
3                   5                        Los Angeles                LAX                 54 982 838    
4                   6                        Dallas/Ft Worth           DFW               53 253 607   
5                  10                       Denver                        DEN                37 505 138    
6                  11                       Phoenix                       PHX                 37 412 165    
7                  12                       Las Vegas                   LAS                 36 285 932    
8                  14                       Houston                       IAH                  34 154 574    
9                  15                       Minneapolis                 MSP                33 201 860    
10                16                       Detroit                         DTW                32 664 620    
11                17                       New York                     JFK                  31 732 371    
12                20                       Miami                           MIA                  29 595 618    
13                21                       Newark                        EWR                29 431 061    
14                22                       San Francisco             SFO                 29 313 271    
15                23                       Orlando                       MCO                27 319 223    
16                25                       Seattle                         SEA                 26 755 888    
17                30                       Philadelphia                 PHL                 24 671 075   

Large US airports and airport hubs
Source: Airport Council International, 2003 

There are many factors which could influence your decision on where to establish your USA business. Depending on your business, it could be the case that this article did cover many important factors for your speific situation.

If you are in the planning phase of bringing your business to the United States, you should spare some time of your planning phase to structure various options in regards to your USA office location and select or exclude certain cities within the United States. Especially if you are a cultural outsider it is important to get a good base of information to support the right decision. Seattle for example is a great city, but it is a poor choice if most of your potential customers are located around the East Coast. Tampa in Florida is a great city, too. But if you have to fly dozens of times per year, you are maybe better off choosing a city with a large Hub Airport such as Atlanta, Chicago or Los Angeles.


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