How to know where to open your next office

Here are 7 things to look for when your company needs more space.

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More than ever, fast-growing tech companies are opening offices in cities outside of Silicon Valley and NYC. Google opened a new office in Boulder, CO in December 2018. Apple announced that it would open a new location in Austin. Toast, a startup in the restaurant space, recently expanded to Portland and Omaha. LinkedIn announced in January that it would also open an office in Omaha with 1000 new hires by 2021.

What this shows is that theres strong talent all over the country, and local infrastructure is changing to support growing tech industries. Austin and Denver are the most well-known growing tech hubs of recent years, but they’re already getting expensive. (Both saw a $15–20k jump in cost of living from 2017–2018.) There are many more cities across the country where tech is growing fast and costs are still reasonable.

Here’s our list of criteria to find a city that will support your company’s growth.

  1. Strong local talent

When expanding to a new location, there has to be a strong candidate pool to fill hiring needs. Areas around universities often have a high concentration of top talent, and cities with well-established corporations have accomplished talent, despite not having FAANG on their resumes. Many of these employees are ready for a new opportunity and don’t want to move to a big tech hub to make their next career move. They’re also very loyal, so your company won’t experience the same level of attrition as it does at HQ.

If your company is in Silicon Valley or NYC, poll your employees to see how many of them would be willing to relocate to a new city and you may be surprised. Increasingly, tech talent that moved to major tech hubs for work over the last few years is now looking to leave. Companies that can seed talent from HQ to start their new office elsewhere will have an easier time making sure culture and processes are translated between locations.

Additionally, having a location outside of major tech hubs will make your company more attractive to top talent from all over. Mid- and upper-level management who especially want to raise a family but don’t want to do it in an expensive coastal hub are more likely to sign on. Having a domestic office where they can relocate will be more appealing than offering to move them to a major city or internationally.

2. Ease of doing business

Many local governments offer incentives to companies because they know that new business can help revitalize districts and improve the overall health of the economy. Incentives range from tax breaks to helping with property development and building talent pipelines. Each city is a little different, and it depends on what kind of impact your company will bring to a city and its community.

Omaha and Minneapolis are just a few cities with incentives programs for startups. As we saw with Amazon HQ2, many cities will go above and beyond to attract businesses.

3. Cost

Talent and real estate, combined, can make up around 80% of a company’s expenses. It’s much more cost-effective to operate in cities outside of major tech hubs because there’s not nearly as much competition for the same resources. Real estate and quality talent are available for a fraction of the cost, allowing companies to grow without the financial strain. This also makes it more manageable to design and build an amazing office to attract and retain top talent.

4. Business and startup network

If there are an established tech community and growing startup network in the area, it means that talent and resources are already there. Meetup groups give people the opportunity to network and learn from one another. With other businesses around, employees can make industry connections and solve problems together. This also makes it more enticing for talent to move there.

Columbus has an incredible business ecosystem with companies ranging from tech and business services to manufacturing and logistics. Lots of tech companies are starting to look at Houston over Austin and California.

5. Proximity to customers

Being close to customers makes it easier to connect with them. For companies that rely on quick feedback and customer relationship-building for success, opening an office near customers will allow them to do so more efficiently. If your company has customers in oil and gas, Houston should be on your radar. If you’re an enterprise software company that is selling to F500 companies, Atlanta is a good option outside of the coasts. Designing the office to give customers a good experience when they visit is a great way to elevate a brand and build customer loyalty.

6. Convenient travel

Making regular visits between offices helps companies maintain culture across multiple locations. Direct flights and short airport lines take some of the friction away from having an office in a different part of the country.

More upcoming tech hubs are starting to operate direct flights to and from major cities. As of June 2019, Madison has a direct flight to San Francisco. Cleveland already has 3 daily flights to San Francisco, and Nashville has 7 to NYC.

7. Community

Finally, it’s important that a new city feels like home. Do the neighborhoods have good vibes? Does the community align with company values? Personally visiting the city to meet with leaders in business and economic development, and to scope out the neighborhoods helps to confirm if you’re making the right choice. Opening an office in a city that feels every bit of home as HQ will help a company attract and retain the right employees.

We have 24-hour itineraries in a number of cities across the country so business leaders can get a feel for a new location. Let us know if you’re interested in having us take you on one (or a few).

What Does It All Mean?

It makes sense to start a company in a major tech hub like SF or NYC, but when it comes to growth, it is becoming increasingly obvious that sustainable scaling of ‘people and places’ needs to be elsewhere in the country. There are so many cities across the country that have the talent and resources necessary for companies to scale. Columbus, Indianapolis, Madison, Pittsburgh, and Atlanta are just a small handful of names that have growing pools of tech talent. (We know because we’ve been there.) Talent is ready, communities are welcoming, and costs are lower. Finding the right fit for your company’s next home is just the first step in ensuring your workplace operations support the success of your company.

If your startup is growing fast and will need to open a new office in the next 6–24 months, the time to start planning is now. There are hundreds of decisions that need to be made between deciding to expand and day 1 in your new office. We take the burden from your team by playing the role of your in-house point of contact so they can continue focusing on what matters to them. From decision to launch, we accelerate the process and give you peace of mind knowing it’s going to be done right and for the best value. If you want to learn more, please visit our website and get in touch!

Our city comparison tool tracks costs and other data from 25+ cities across the US. Use it to compare the burn rate for opening an office in an emerging tech city versus San Francisco or New York.

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