Cost of Doing Business

Central to business retention and corporate site selection is the determination of the company’s cost of doing business for a given location (community). This is a calculation that communities often document as well. The factors contributing to this calculation can vary, but there are some fundamental elements that any such determination would include. The overriding feature of these elements is that they represent costs are geographically variable.

The following items represent the basic components of a Cost of Doing Business calculation. Other factors (i.e. regulatory costs, permit/development feed, and corporate income taxes) can are added to achieve a more comprehensive analysis. Applying identical project data to specific locations for comparative purposes, an analysis can be conducted. The comparative locations are Yuma and a community in central California.

• Utility Costs – Utility costs are widely variable. The items considered for this review are water, sewer, and electricity. Available data indicates annual savings in Greater Yuma of 35% to 40%.
• Land and facility construction costs – Analysis shows savings of over 20 percent in Yuma County. (Note: The construction cost applicable to the analysis is 10 years of payments on a commercial loan.)
• Property and sales taxes – The data indicate the California location with a 10% to 12% advantage.
• Payroll taxes and benefits – This analysis (including health insurance, social security, Medicare, unemployment insurance and workers compensation) indicates an annual savings of 14% to 15% in Yuma County.
• Wages – Annual cost savings of 10% to 12% in Yuma County are realized.

The 4FrontED Binational Megaregion exhibits a cost structure that is well-suited to manufacturers, food processors, back-office operators, and the renewable energy industry. Combined with its access and proximity to major southwest and west coast markets, the 4FrontED region’s Cost of Doing Business is a consideration not to be overlooked in the corporate site selection process.