When your business is in a position to invest in local areas, you can celebrate a certain milestone. Now you are no longer concerned with only survival, but how to thrive, and how to keep your money working for you as time goes on.
Maybe you’re considering investing in a local commercial district, expanding into a second office, or even moving to a more lucrative area with more opportunities. With MGP Property, you can even begin investing in assets such as real estate, or development opportunities.
Yet while those opportunities are out there, and many are just waiting to have a conscientious brand come in and maximize value, deciding among them all can be difficult. It’s the age-old problem of being a child in a sweet or toy shop – by choosing one you are by implication failing to choose all the alternatives. Yet we only have so much investment potential and need to use it wisely.
So, what are some worthwhile indications that a local investment opportunity is worthwhile? In this post, we’ll consider many:
- Strong Economic Growth Trends
Put simply, how is the economy of the local area? You can gauge this by various business reports, seeing commercial development or construction taking place, and seeing the health of the high street. Sure, some changes are taking place (such as high street shopping often ceding ground to online variants), but if large industries seem to be setting up base in a specific location, that’s a good sign that you should, too.
- Growing Population/Demographic Shifts
Population figures are usually available by the census, but if a local area seems to be growing year-on-year, or demographics are shifting (for example, much more money is being invested in inner-city or town living), that’s a sign that the future of the area is healthy.
Of course, gentrification is a thorny topic, and in some cases can push traditional communities out of certain areas. This is not good. But it does show that investors are keen on the area and think it has value. Perhaps your own investment can be measured with both commercial development and the needs of such communities in mind. Moreover, a presence of smaller brands and startups is healthier than international conglomerates setting up shop, so your mere presence is a little healthier than the norm.
- Emerging Industries Or Technologies
What made Silicon Valley, Silicon Valley? Was it an accident that one of the most influential areas for tech grew in this specific location? Well, there were several factors. The area had great post-war infrastructure development, it was situated right on the port, and on top of that, it’s located near some of the best universities in the world – Stanford and Berkeley.
But this is just one example of how technologies or industries can emerge in distinct areas. For example, in the UK, freeports are places of limited tax burden meant to sustain economic development over time. If you notice an emerging space or field and you want to get involved, well, you could do much worse than here.
- Low Vacancy Rates In Real Estate Markets
If real estate is competitive, that’s often a good sign people care about the area and want to invest in it. But you don’t have to only target areas that are replete with competition and paying through the nose for a slice of the pie, you may find that upward trends are enough to attract your attention and potentially get you involved.
Low vacancy rates and a competitive rental market also shows that your area is blossoming and potentially becoming a place for further investment. This isn’t the only qualifier of course, and sometimes it pays to be a bigger fish in a smaller pond, but such a measure can certainly inspire you to gain more of a foothold.
- Favorable Regulatory & Tax Environment
As we mentioned with freeports above, sometimes a given area has specific rules in place to help furnish the local economy, bring jobs to the area, and inspire businesses to take that starting risk. That might involve limited tax obligations, or even lesser regulations depending on the industry you work in. Now, that doesn’t mean you can automatically flout safety regulations (you need to sell products in services in areas outside of this specific location, for example), but there may be lessened startup costs, or perhaps the chance to export with reduced costs, or you may even find part of your industry subsidized.
As a plucky firm looking to establish itself, you could do worse than finding a distinct area such as this as fertile ground for growth. The soil analogy works well here – healthy soil with plenty of nutrients is better to plant in than clay. This is why economic development is such an essential part of local and national politics, and so if you run a startup of any kind, it’s unfortunately important to keep up with that chaotic news cycle or read publications you can trust, like The Economist or the Financial Times.
- Access To Skilled Workforce Or Talent Pools
Who you hire is, of course, very important to the general success of your business. Having access to the cream of the crop, people looking to prove themselves, and those who want to see the industry succeed as much as you is great. This is why in the UK, a huge amount of media development is taking place in the North of the country in areas like Leeds or Manchester, as this was once centralized in London, but now companies have the incentive to set up base further away. Again, we mentioned Silicon Valley and its ties to world-beating graduates.
Could it be that opening in a distinct environment can help you make a new powerhouse of a dedicated city lacking your industry? Well, if not you, then who?
With this advice, we hope you can identify excellent local investment opportunities, for both structuring your business, consolidating assets, investing in the future of your business, extending outwards, or simply making a new area your commercial home.
