Qualitative & Quantitative Factors Evaluated During The Site Selection Process

Larry Gigerich

By: Larry Gigerich - Managing Director, Ginovus

Category: Economic Development

It is very important for site selection advisory services firms and companies to thoroughly evaluate quantitative and qualitative factors when evaluating communities and states. Often in today’s world, many organizations tend to primarily focus on quantitative factors when deciding where to locate a new facility.

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While quantitative factors have been and will continue to be very important in the site selection process, qualitative factors are also critical in order to ensure that the company makes the best decision. This is particularly true as the economies of the United States and the world become more knowledge-based.

What are the most important quantitative and qualitative factors evaluated by site selection advisors and companies when making a decision regarding the location of a new or expanded operation? The list will vary depending on type of facility (i.e. manufacturing, logistics, research & technology, office), but most factors apply to all forms of projects. Please find below a summary of the most important quantitative and qualitative factors considered by companies.

Quantitative Factors

1. Property Tax Rates
2. Corporate Income Tax Rates
3. Sales Tax Rates
4. Real Estate Costs
5. Utility Rates
6. Average Wage/Salary Levels
7. Construction Costs
8. Worker’s Compensation Rates
9. Unemployment Compensation Rates
10. Personal Income Tax Rates
11. Industry Sector Labor Pool Size
12. Infrastructure Development Costs
13. Education Achievement Levels
14. Crime Statistics
15. Frequency of Natural Disasters
16. Cost of Living Index
17. Number of Commercial Flights to Key Markets
18. Proximity to Major Key Geographic Markets
19. Unionization Rate/Right to Work versus Non-Right to Work State
20. Population of Geographic Area


Qualitative Factors

1. Level of Collaboration with Government, Educational and Utility Officials
2. Sports, Recreational and Cultural Amenities
3. Confidence in Ability of All Parties to Meet Company’s Deadlines
4. Political Stability of Location
5. Climate
6. Availability of Quality Healthcare
7. Chemistry of Project Team with Local and State Officials
8. Perception of Quality of Professional Services Firms to Meet the Company’s Needs
9. Predictability of Long-term Operational Costs
10. Ability to Complete Real Estate Due Diligence Process Quickly

Another important part of the site selection evaluation process relates to the weighting of the key quantitative and qualitative factors. Depending on the type of project, factors will be weighted differently. As an example, for a new manufacturing facility project, issues such as utility rates, real estate costs, property tax rates, collaboration with governmental entities, and average hourly wage rates may be weighted more heavily. By contract, for a new office facility factors such as real estate costs, number of commercial flights, crime statistics, climate and industry sector labor pool size may be more important.

When assisting clients, our firm weights the importance of each criterion. We then rate the risk level of each factor. Finally, we input the weighted data into a formula to compute a score for each site. This approach allows Ginovus to tailor the analysis to meet each client’s needs and to adjust the formula as issues arise. We believe this allows us to provide the best possible recommendation to a client.

Every project is unique and must be evaluated based upon its own individual set of circumstances. By identifying the key factors impacting a project, site selection advisors and companies can reach an informed decision. Carefully designed methodology, when combined with thorough analysis, and sometimes instinct, should lead to a successful outcome.

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