In today’s marketplace, businesses that survive and thrive must anticipate change, address challenges and take advantage of disruptive opportunities.
All too often, these transformational changes involve making long-term decisions regarding facilities and long-term value of the business. Unfortunately, many of today’s businesses may not be aware of the countless factors, such as incentives, tax credits and other benefits that are part of the process of facilitating sound business decisions.
Business incentives provide reductions in some of the following areas:
- Capital costs
- Operating costs
- Human capital costs
Types of multi-state business incentive opportunities often take the form of tax credits, deductions and exemptions as well as abatements, cash grants, favorable financing, discounts, rebates, time and money saving procedures, payments in lieu-of tax and other innovative forms.
Whether your business is experiencing growing pains or is in the site selection process, it can be overwhelming and time-consuming. That’s why it’s smart to not only have a better understanding of the key factors, but also to get a clearer picture of their meaningful distinctions when making informed decisions.
To help you move toward your first steps from project inception to implementation, below are just a few of the terms and concepts that you will need to know.
- Watch out for the thorns – Infrastructure grants, hiring credits with long retention requirements, certain job training programs, and limiting/restrictive tax credits can be hard to spot without a trusted advisor on your side. These may not be awarded directly to the business and other entities involved can mean more complexity, increase costs to pursue and lengthen time between incentive award and receipt of benefit. Longer terms can make the incentives more venerable to intervening business and economic circumstances impacting the business’s ability to meet their commitments.
- Low-hanging fruit – Statewide, substantial savings, new job creation, and some investment tax credits are easy to claim and manage. Don’t pass these by as there are generally more savings for every dollar than it costs to pursue. These should continuously be a consideration as current and planned business activities are reviewed for potential incentives opportunities.
- Worth the climb – Targeted hiring incentives, property tax abatements, and training grants are worth the effort. Though they will require attention to detail and implementation of processes and procedures to capture required information over the term of the incentives, significant value potential exists.
- Well worth the wait – Planning considerations, retention incentives, inducement packages, relocations, and redevelopment are all longer-term propositions and can generate considerable value if your business integrates tax credits and incentives reviews early in the process. Your business will be positioned in-front of the transaction, have a better understanding of its business objectives and be well-equipped to maximize incentives value.
Additionally, critical to the incentives process is leveraging timing, your position and competitive opportunities. Doing so allows your business to take advantage of and maximize well-established incentives and emerging incentives trends available to you at the local, regional and state levels.
It’s about gaining a deep understanding of the challenges and opportunities of various markets and obtaining a comprehensive analysis matching business and financial goals and objectives with qualitative and quantitative decision factors. It’s all about being able to differentiate from the competition in an ever-changing marketplace so you can make the decision that’s best for your business, employees and customers.
From manufacturing and processing companies to construction and start-up hi-tech businesses, it’s essential when facing a location decision or simply making routine business expenditures to understand, evaluate and compare the available incentives. It’s vital to your business to create long-term partnerships with government agencies, utilities and civic groups to help you achieve business success and maximize incentives.
The business of incentives and economic development can be overwhelming and complicated. Ashmore Consulting is there for you to reduce complexity and provide strategic advice, planning and implementation. Simply put, we maximize benefits from site selection to economic development consulting to incentives negotiation services. We bring a combination of depth of knowledge, proven experience and tailored service approach, making sure we’re a step ahead in implementing and successfully achieving your goals.