KPMG: Tampa Bay area 2nd cheapest to run a business

[FloridaFuture]

KPMG: Tampa Bay area one of cheapest to run a business
Wednesday, April 9, 2008 - 1:55 PM EDT
Tampa Bay Business Journal

Businesses have continued to move operations to the Tampa Bay area, but it might not just be the sunshine and the beaches that are the main attraction. A new study by KPMG says that among the top 25 major cities in the United States, only Atlanta is cheaper than the Tampa Bay region to run a business.

The 2008 KPMG Competitive Alternative Business Cost Index measured the combined impact of 27 cost components that are most likely to vary by location in running a business, including tax, labor and facilities costs. The study then took after-tax cost of startup and operations over a 10-year period and compared cities and regions that have at least 1.5 million residents.

Tampa-St. Petersburg was tied with Dallas-Fort Worth as the most cost-effective cities to operate a business, just four-tenths of a percent behind Atlanta, which led the nation. Only Baltimore and Houston finished better than the national average in the index to make up the top five regions.

"Business costs are an important factor companies use in the decision-making process when choosing where to relocate and expand," said Chris Steinocher, chief operating officer and senior vice president of marketing and business development for the Tampa Bay Partnership, in a release. "This ranking shows that the Tampa Bay region remains very competitive in this important measure for economic growth."

Tampa Bay finished at the top for having the lowest business costs among the top 25 American cities for shared services, a key industry cluster for the region with more than 40 shared services operations employing more than 40,000 workers. Companies with shared services include Coca-Cola Enterprises, Lockheed Martin, PricewaterhouseCoopers and JPMorgan Treasury Technologies.

In a shared-service environment, common functions such as human resources, finance and information technologies are consolidated rather than spread across an enterprise. That means sharing them like a business delivering services to internal customers at a cost, quality and timeliness that is competitive with alternatives, according to the Partnership.

The KPMG study examined 17 industry operations including aerospace, agri-food, automotive, chemicals, electronics, medical devices, metal components, pharmaceuticals, plastics, precision manufacturing, telecommunications, biotechnology, clinical trials, product testing, software design, Web and multimedia, and back off/call centers/shared services.

No other Florida cities were included in the index. Trenton, N.J.; San Jose, Calif.; and New York City were considered the most expensive business operational cities in the survey.

Wilmington, Del.; Washington, D.C.; St. Louis; Indianapolis and Providence, R.I., rounded out the top 10 most cost-effective cities to run a business.

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