Don’t let the bright lights of San Francisco blind you — other urban centers offer startups big city benefits at a lower price.
Location, location, location.
Ask any seasoned entrepreneur what makes or breaks a new business and they’ll tell you this: choosing the right location is one of the most important decisions a new business owner will make.
Between cost of real estate and quality of life, employers should evaluate potential locations based on both immediate affordability and potential for long term growth. With that in mind, many new business owners are forgoing astronomical Silicon Valley rents and setting up shop in other tech-friendly cities like St. Louis. These cities, which generally have between 500,000 and three million inhabitants, are small enough to offer startups an intimate community infrastructure but large enough to facilitate rapid growth.
Let’s take a look are four things to consider when you’re thinking about where to build your headquarters:
1. Real-Estate Costs
Real estate prices in tech-hubs like San Francisco and Seattle are off the charts, and traditional centers of commerce like New York aren’t much more affordable. Even if your company can technically afford office space in a high profile city, there are countless hidden expenses to consider, from property taxes to renovation costs.
Rather than blow your whole budget on maintaining a workspace, invest that money in more meaningful aspects of your business’s development. Cities like St. Louis not only offer more manageable rents, but use incentive programs to intentionally stimulate economic growth. That means qualifying new businesses could save thousands of dollars in tax breaks and supplemental grants.
Daunted by the prospect of building a new facility from scratch? Because up-and-coming cities like St. Louis aren’t already bursting at the seams, there are plenty of diverse and interesting empty spaces well suited to adaptive reuse — giving entrepreneurs the option to save time and money (along with the planet) in one fell swoop.
2. Cost of Living and Quality of Life
In order for a fledgling business to flourish, it needs invested employees who are excited about what they’re building. And while money is far from the only incentivizer, a happy worker is one who can afford rent. Companies with offices in New York and San Francisco often pay those employees more based solely on the cost of living in those cities.
Plus, your employees aren’t the only ones with utility bills to pay. How much will it cost to hire a custodian in your city of choice? What about electricity, wifi, and parking? Smaller cities like St. Louis occupy the supply and demand sweet spot — boasting the resources of a major metropolis at a suburban price point.
3. Educational Systems
Did you know that Millennials will comprise 50% of the global workforce by the year 2020? No matter your industry, attracting young talent is essential to future growth — and where better to find eager young professionals than in a college town?
St. Louis is home to dozens of schools, including the esteemed Washington University. With graduating classes of nearly 2,000, the campus is a wonderful resource for burgeoning businesses looking to snag talented interns and new hires. As more and more investment is poured into new development projects and innovation districts, it’s not surprising that St. Louis is becoming a hotspot for tech entrepreneurship.
4. Long-Term Growth Potential
As you decide where to establish an office, remember: you’re not just choosing somewhere to start, you’re choosing somewhere to grow. Because secondary cities like St. Louis are also growing, they’re committed to helping you on your journey — from the incentives they offer to the community they provide.