#111. Locate Your Next Plant in a Small Town?

Posted on | The Agurban
Locate Your Next Plant in a Small Town?

We discussed a couple issues back the problem of low unemployment and rural labor shortages. While this does affect many small rural areas, it certainly does not affect all. Bill King, Chief Editor of Expansion Management magazine recently posted a commentary titled “Why Not Locate Your Next Plant in a Smaller Town?”

As we have known for 20 years at Agracel, small towns are a great location for manufacturers. This, after all, was one of the key reasons Boomtown USA was written, because of what we were seeing in our industrial development activities in small towns around the USA. Small towns offer some advantages that you just won’t find in a metro area. Here are a few of the more obvious reasons.
  • ** Lower real estate costs. Almost without exception (unless it’s a tourist area), smaller cities and towns offer lower real estate costs. That’s because the land is less valuable and the development costs are lower as well.
  • ** Lower taxes. The demand for government services is considerably less in a small town and, therefore, so are the taxes.
  • ** Lower wage costs. Although living costs vary from region to region, they also vary within the region itself. Even if business requirements dictate your presence in a particularly expensive region of the country, you can still lower your wage costs by choosing to locate in a smaller town within the region, rather than in a big city.
  • ** Fewer transportation costs. One of the major advantages of a large metro is that it is often located at a transportation crossroads. Most of the “micropolitans” (an urban area that includes at least one city or town with at least 10,000 – but less than 50,000 – population) are also located on or near at least one major transportation artery, often more. The main difference is a whole lot less congestion.
  • ** Lower operating costs. Lower wages, taxes and real estate costs all translate directly into considerably less “stress” on the expense side of the ledger.
  • ** Strong work ethic. Let’s face it. Small town values mean a day’s work for a day’s pay.
  • ** Employer of choice. Properly handled, there’s a lot to be said for being a big fish in a small pond. Depending upon the city or town, you could easily find yourself the “employer of choice”, attracting the very best workers from the entire region.
As Bill King says, “While it’s not likely that any of these towns will offer major league sports or a local philharmonic, they can offer advantages your company might find very attractive.” 

Is your community ready when prospects come knocking? Do you have information ready to present to these prospects regarding your real estate and tax costs, local wage and transportation costs? Keep your community positive and you might just land that next manufacturer looking at your small town.