International Business Consultants Give Tips to Win Government Incentives

International business consultants have been gaining government contracts for businesses for a long time. Taking advantage of government incentives is a good way for businesses to hedge against risk and also build infrastructures to sustain growth over time.

International businesses should seek to align avenues of their organizations with government initiatives as their incentives reflect the needs of the congruent economies. In order for businesses to blossom from an economical standpoint, gaps in economic shortages must be met in some fashion. The Business Journal’s article points out how international business consultants give tips to win government incentives.

International Business Consultants use government incentives to stimulate international development.

“Businesses often qualify for government incentives to expand or relocate, but knowing where – and how – to look may require specialized help.

Relocation and the quest for incentives is “a highly complex process,” said Andy Shapiro, a managing director at Biggins Lacy Shapiro, a Princeton, N.J., site-consulting firm.

There are also many variations since the provision of incentives “pretty much happens at the state level,” Shapiro said. State governments provide incentives for business expansion or relocation to boost employment or expand their tax base, said Justin Erickson, an economic development consultant in Minneapolis.

Existing businesses seeking incentives to stay where they are or add jobs can contact state departments of commerce or industrial development, said Mark Arend, the editor of Site Selection magazine.

Erin Way, a media relations associate at the International Economic Development Council International Economic Development Council Latest from The Business Journals Best of Biz Notes: Oct. 3Seeing the Charlotte region with new eyesMorfessis wins economic development award from IEDC Follow this company , suggested that businesses seeking incentives “hire a site consultant or contact the community they want to relocate in.”

Site consultants identify cash grants, tax credits and other potential incentives, then negotiate deals with local governments, administer agreements to ensure payments are collected and help clients avoid compliance issues.

Erickson suggested that a company begin by identifying its facility and other logistical needs, then make a list of non-cash benefits (such as tax abatements or free land) that will influence its decision. In addition, the company should estimate the number of jobs to be created and review local wage rates.

Next a company should list about 30 communities in at least two states, contact local officials with general project information and, on the basis of information gathered, visit two or three communities. Companies sometimes cast “too wide a net” but more often start out focused too narrowly on one or two communities, Erickson said.

Shapiro said that a consultant can make the greatest impact by being involved in the overall selection process, starting with decisions about whether, where and how to relocate. “Most companies don’t do this every day. We do deal with (relocation) every day.”

But a consultant can also help later in the process, he said. When a client has already made an initial location decision, a consultant can identify and negotiate incentives. Sometimes a consultant helps with annual reporting and other compliance issues. Erickson cautioned companies seeking support to pursue incentives in advance, as communities sometimes do not follow through with promised incentives once a company has signed a lease or bought a building.

Other important elements in the quest for incentives include a public communications strategy and an incentive agreement that spells out “claw back” remedies if a company fails to reach job or other economic targets. Such provisions can help “make remedies proportional to your commitment” and avoid penalties or deals in which a failure to deliver some of the promised jobs results in the loss of the entire incentives package, Shapiro said.

Companies should look at the site selection process and the quest for incentives as similar to selling a house, Erickson said. “Unless this is something you’ve done before, find somebody to give you assistance.”

Federal incentive money can be hard to find, Erickson said. Although the U.S. Department of Agriculture U.S. Department of Agriculture Latest from The Business Journals WSU launching rural entrepreneurship program in GreensburgUSDA to award Missouri million in aid todayTexas Biomed accepts ,000 regulatory fine Follow this company offers some incentives for development in the rural communities his firm specializes in serving, Erickson said that most businesses should “spend all of your time pursuing state, regional and local incentives but don’t get caught up in the federal stuff.”

Matt McGuire, a spokesman for the U.S. Commerce Department’s Office of Business Liaison, said that “federal programs and initiatives” generally don’t provide much support for business expansion or relocation. “Most of these efforts are actually at the state or local level.”

Even so, combing federal programs for aid presents its own set of challenges. “For a typical business or an entrepreneur, it’s difficult to navigate,” said Aaron Brickman, deputy executive director of SelectUSA, a federal inter-agency working group.

SelectUSA’s web site is “a good place to start for a typical company,” said Brickman. The site includes a searchable guide to federal programs that offer grants, loans, loan guarantees and tax incentives to businesses. It also has a clickable map with links to state economic development agencies.

Brinkman said that companies seeking federal aid should call Select USA, at 202-482-6800, where staff can provide “an introduction to an actual human being” at a program or agency.

Arend noted that while hard fiscal times have left “a lot of state budgets under pressure,” most states still have funds to incentivize industrial expansion and job creation: “Funds may be a little harder to come by, but they’re there.”

Three top tips

1. Government aid often aims to address a broad social or economic problem – for example, disaster recovery or alleviation of poverty – so applications for grants and loans need to identify that problem and describe how the proposed expenditure would contribute to a solution.

2. Most government incentives for business expansion or relocation come from states or local jurisdictions

3. Consider engaging a site location consultant if your project involves a new facility, large-scale investment or other complex factors

International business consultants should start by making connections with local officials, filling economic needs and getting more familiar with the regulation process. Businesses and international consultants should fully understand market and test programs and initiatives before seeking government incentives. The Business Journal gives great insight by directing organizations on strategies to grow business through government incentives.

Although, there are many risks associated with doing business with the government. Governments can put unwanted pressure on companies’ decision makers, the stipulations of the incentives might limit business operations, or agencies can align business too close with new projects and ultimately take away from the core competencies of normal business.

Also government incentives may be lucrative but may not align with the company vision for international development. When international consultants seek government partnerships they must also keep companies interest in mind. The Business Journal also mentioned the top 3 ways to incorporate government into business but these are only the top ways. International business consultants should actively seek new opportunities and additional existing opportunities to connect government incentives to various markets.