Georgia’s Business Climate Tops in the Nation
ATLANTA – Georgia’s business climate has been ranked No. 1 in the nation for the sixth consecutive year by Site Selection, a leading economic development trade publication, according to Gov. Nathan Deal. According to Site Selection, Georgia is the first state to hold this ranking for six consecutive years under leadership by the same governor.
‘For six years now, Georgia’s business climate has been ranked No. 1 in the nation, as people from all over the country have come to our communities to find opportunity, jobs, hope and prosperity,’ said Deal. ‘Earning this distinction six consecutive times speaks to the immense strength of our business-friendly environment and the value of the strategic investments we’ve made across our state. Today’s announcement is the result of exceptional collaboration between public and private sector partners who create economic opportunities in Georgia’s communities, as well as conservative policies that attract more and more business to our state each year. I appreciate Site Selection once again recognizing Georgia with this honor and we are proud of the foundation that we have built and maintained for over half a decade.
‘Here in Georgia, we have truly cultivated an economic environment that rewards hard work and innovation, generates investments in local communities and improves the overall quality of life for families. We have not been content to rest on our laurels, as we’ve cut taxes and made even deeper investments in our workforce since first earning this distinction. We are proud to be the No. 1 state for business and as we look to the future, Georgia will continue to take the steps necessary to attract industry leaders from around the world and help homegrown small businesses succeed. It has been the honor of a lifetime to serve Georgia as governor as we’ve led the nation in economic development and I look forward to Georgia retaining its position as an exceptional place to do business, work, learn, and call home for many years to come.’
Each November, Site Selection releases rankings for the top states in which to do business. Site Selection’s business climate rankings are based on a survey of corporate real estate executives and site consultants and an index consisting of tax burden criteria from the Tax Foundation and KPMG’s Location Matters analysis and qualifying projects resident in the Conway Projects Database, which tracks new and expanded business facility activity worldwide. Georgia has been ranked among the top 10 states throughout the last decade and has held the top spot for the last five years.
‘A six-year top business climate winning streak is highly unusual,’ said Mark Arend, editor-in-chief of Site Selection. ‘But it stands to reason, given Governor Deal’s commitment to making Georgia a competitive location for business early in his administration and every year since. Capital investors tell us the state delivers the fiscal soundness, logistics infrastructure, competitive business costs and workers they require today and in the future.’
Deal was joined at the news conference by Arend, Georgia Department of Economic Development (GDEcD) Commissioner Pat Wilson, and former GDEcD Commissioners Attorney General Chris Carr and Chris Cummiskey.
‘Being recognized by Site Selection magazine for having the best business climate in the nation for the last six years is a testament to the leadership of Governor Deal and the General Assembly, and will certainly be among the many accomplishments remembered by Georgians of this administration,’ said Wilson. ‘The last eight years have been unprecedented for our state in terms of economic development from job creation to located projects and investment. We celebrate this accolade with all of our economic development partners across the state who have played an important role in helping Georgia earn and maintain this ranking.’
Economic development highlights:
- In the past eight years, Georgia has seen the creation of roughly 750,000 new, private sector jobs.
- At 3.7 percent, Georgia’s unemployment rate is now at its lowest point since 2001.
- In October 2018 alone, Deal and GDEcD announced the creation of more than 2,500 jobs and over $215 million of private sector investment in Cobb, Emanuel, Fulton, Hall and Troup counties.
- Since 2011, GDEcD has worked on more than 2,900 economic development locations and helped to bring roughly 214,000 jobs and $39.6 billion in investment to Georgia communities.
- GDEcD’s Global Commerce Division helped to bring in $5.56 billion in new investments for Georgia during the last fiscal year.
- Since 2010, overall exports from Georgia have increased by 28.8 percent.
- Since 2012, 74 percent of GDEcD location projects were outside of the metro Atlanta area.
- When state tax cuts passed earlier this year are fully implemented, Georgia’s corporate and individual income tax rates will be reduced from 6 percent to 5.5 percent. State tax reforms will also double the standard deduction for hardworking individuals and families from $3,000 to $6,000.
- As a result of federal and state tax reforms, Georgians could save up to $5 billion over the next five years. These reforms are together estimated to lead to a $4,200 increase in wage and salary income for the average household.
- The percent of Georgia’s population living below the poverty line has decreased by 2.1 percent since January 2017 and is at its lowest point since 2006.
- Monthly initial claims for unemployment insurance in Georgia recently fell to their lowest level since 1974.
- Georgia has maintained a AAA bond rating for 21 consecutive years.
- The state’s Rainy Day Fund, which was once almost empty, has now topped $2.5 billion, ranking it the highest in the Southeast and one of the top ten highest in the nation.
About Site Selection
Site Selection, published by Conway Data Inc., delivers expansion planning information to 48,000 executives of fast-growing firms. The senior publication in the development field, Site Selection is also available via Site Selection Online. The publication also publishes or co-publishes e-newsletters, including The Site Selection Dispatch, Life Sciences Report, Aerospace Report and Energy Report, Site Selection International, The FDI Report, TrustBelt.com and the OnSITE Travel blog
Day One is the Day to Prepare Your Exit
If you’ve just bought a business, one expert thinks you ought to start thinking about your exit.
Pepperjam CTO Greg Shepard says entrepreneurs should think about partnering early on with those they believe will ultimately want to buy their business. His thoughts were outlined in an article “Planning Your Exit Should Begin When You Launch” in Entrepreneur magazine.
Thinking Ahead
Much of Shepard’s thinking centers around the fact that a large percentage of startups end in acquisitions. In particular, he notes that in 2017, “mergers and acquisitions accounted for 93 percent of the 809 ventures capital-backed exits, yielding a total of $45.6 billion in disclosed exit value.” Not too surprising, he also points out that according to a recent Silicon Valley Bank survey, over 50% of all startups are “hoping for an acquisition.”
For this reason, Shepard points out that entrepreneurs should be thinking about who may potentially acquire them from day one. In particular, startups will want to build their companies in such a way that they will be attractive for acquisition at a later date.
Making one’s startup attractive for acquisition means thinking about such details as the Ideal Customer Profile, Ideal Employee Profile, and Ideal Buyer Profile. This will help startups build the most attractive acquisition friendly company possible. According to Crunchbase, exit opportunities frequently present themselves well before a company’s Series B funding.
Building Successful Strategies
Startups simply must understand who their customer is and why their particular product is attractive to that customer. Likewise, having the right kind of employees with the right kind of training and know how is key. Hiring the best talent is definitely a way for a startup to make itself more attractive for a potential future acquisition.
Shepard believes that once you understand your customer and have the right team to support your vision, you’ll want to focus in on companies that are most likely to be interested and construct an “optimal buyer pool.” Finding this optimal buyer pool means finding businesses that serve similar markets and then making sure that your product, as well as your business model, both address an overlooked need within the existing customer base. Combine all of these variables together, and your company will be more attractive for an acquisition.
Let Innovation Drive You
Another key point in Shepard’s article is that startups will want to provide products or services that potential buyers are currently not providing to their customers. Additionally, he states that “Disruptors should seek out companies that are truly driven by innovation-perhaps those that have already established or partnered with innovative labs or accelerators.”
Ultimately, it is critical for startups to understand where they could fit within a larger organization. Understanding this will help entrepreneurs make their company more acquisition friendly.
Copyright: Business Brokerage Press, Inc.
Read MoreEconomic Forecast: Midterm Results Should Ease Corporate Anxiety
Midterm Results Should Ease Corporate Anxiety; Fed to Hike Rates Once in 2019
ATLANTA–The upcoming split control of Congress should somewhat assuage nervousness in the business sector, according to Rajeev Dhawan of the Economic Forecasting Center at Georgia State University’s J. Mack Robinson College of Business.
“Political gridlock is usually tolerated by businesses, and they aren’t expecting rollbacks of the 2017 tax cuts or imposition of new taxes or regulations in the near future,” Dhawan wrote in his “Forecast of the Nation,” released Wednesday, Nov.14.
With midterm elections over, Dhawan anticipates business investment should recover, but the rebound will be muted and affect the future pace of monthly job additions.
“Fall is usually prime time for corporate boards to plan new capital outlays. But sharp ups and downs in stock indices over the past few months will not be conducive to capital expenditures,” Dhawan said. “The damage to CEO confidence is evident in reduced bank loan growth and nonexistent third-quarter investment growth.”
The forecaster said the stock market losses of the last three months also will affect future consumer spending through psychological impacts of lower 401(k) balances.
Despite potential public pressure from the White House, Dhawan expects the Federal Reserve to hike rates in December, then hold firm.
“Money that fled the stock market over the past few months stayed on the sidelines in cash due to political uncertainty,” Dhawan said. “Because it didn’t come to the bond market, the spread between the two-year bond rate and the 10-year bond rate dropped from 60 points in January to only 30 basis points by early November.”
As a result of the tight spread, the Fed must wait until June 2019 to raise rates following the December hike or risk an inverted yield curve, which typically signals a recession.
Dhawan pointed out two factors that could put upward pressure on Treasury yields: the rising fiscal deficit and tax amnesty for repatriating dollars held abroad by corporations.
“I expect the 10-year bond to rise just 70 basis points from today’s levels, which indicates two more hikes,” Dhawan said. “After the December 2018 hike, that leaves one hike in June 2019. By mid-2020 we will start to get below the Fed’s 2.0 percent gross domestic product (GDP) growth rate estimate. That’s why I have rate cuts in 2020, not hikes.”
Highlights from the Economic Forecasting Center’s National Report
- Following strong GDP growth of 3.5 percent in the third quarter of 2018, the fourth quarter also will be above par at 2.9 GDP growth will moderate to below 2.5 percent by late 2019. After expanding at 2.9 percent in 2018, the economy will grow 2.7 percent in 2019 and 1.8 percent in 2020.
- Investment growth will be 6.8 percent in 2018, moderate to 5.1 percent in 2019 and to 3.5 percent in 2020. Jobs will grow at a monthly rate of 209,000 in 2018, 146,600 in 2019 and 100,400 in 2020.
- Housing starts will average 1.262 million units in 2018, fall to 1.259 in 2019 and remain around 1.257 in 2020. Expect auto sales of 17.0 million units in 2018, 16.3 in 2019 and 15.6 in 2020.
- The 10-year bond rate will average 3.0 percent in 2018, 3.7 percent in 2019 and 3.6 percent in 2020 following Fed rate cuts.
Corporate Sector Bounce-Back Leads Georgia Job Growth
ATLANTA–Georgia’s job additions in the third quarter nearly equaled the entire job additions in the first half of 2018, according to Rajeev Dhawan of the Economic Forecasting Center at Georgia State University’s J. Mack Robinson College of Business.
“In the first six months of 2018, the Peach State saw job gains of 35,600, just slightly above the same period last year,” Dhawan wrote in his quarterly “Forecast of Georgia and Atlanta” released Wednesday, Nov. 14. “However, in the third quarter alone, employment increased by 35,900 jobs due to the return of corporate job creation.”
In the first half of 2018, job creation in high-paying sectors, such as corporate, wholesale, transportation and information, moderated sharply and posted a decline of 2,300 jobs. This was in stark contrast to strong job creation in domestic demand-driven sectors, such as retail trade and hospitality (among others), which gained 38,000 jobs.
High-paying jobs, especially in corporate and information, came roaring back in the third quarter. Dhawan indicated that nearly one-third of jobs added in the third quarter were corporate, driven by a rebound in support and administrative positions which compose 50 percent of jobs in the sector.
“Georgia’s fall in corporate job additions in the first half of 2018 and subsequent third-quarter recovery was not seen nationally or in neighboring states. This makes us suspect an anomaly in employment data which sometimes happens since these numbers are based on a statistical inference of a sample,” Dhawan said. “We confirmed our suspicion by checking state revenue data which showed no evidence of high paying job losses. Thus, the underlying trend of the economy is healthy.”
Closely linked to the corporate sector, the information sector experienced a first half decrease in jobs, followed by a sharp rebound in the third quarter. The healthcare sector also saw good gains.
Dhawan cited healthcare facility expansions for Children’s Healthcare of Atlanta in Druid Hills and Piedmont Hospital’s heart and vascular center in the metro area as examples. Facility expansions elsewhere in the state include Southeast Georgia Health System in Brunswick, Habersham Medical Center in north Georgia and Tanner Health System in south Georgia.
These projects and the rebound of multifamily housing permits have led to a substantial gain in construction jobs statewide. Strong sales and property tax collections have also resulted in city and county-level job gains in the government sector.
Despite these positive trends, Dhawan does not expect job growth to continue at this pace for Georgia.
“The job creation bump in the third quarter was a rebound from job losses in the first half of the year,” Dhawan wrote. “Therefore, we expect job creation going forward to revert back to its long-term moderation trend as the business cycle is maturing, evident also in the moderating business investment growth at the national level.”
The forecaster said the third quarter was not all good news for Georgia. Hurricane Michael’s damage to south Georgia cotton, pecan and peanut crops was an estimated $1.2 billion, with another $1 billion in destroyed timber resources.
Highlights from the Economic Forecasting Center’s Report for Georgia and Atlanta
- Georgia employment will add 90,600 jobs (15,000 premium jobs) in 2018, 68,900 jobs (13,900 premium) in 2019 and 55,500 (11,500 premium) in 2020.
- Nominal personal income will increase 4.1 percent in 2018, 4.7 percent in 2019 and 5.0 percent in 2020.
- Atlanta will add 63,000 jobs (10,800 premium jobs) in 2018, 46,900 jobs (9,600 premium) in 2019 and 38,100 jobs (8,700 premium) in 2020.
- Atlanta housing permitting activity in 2018 will increase 10.8 percent, fall 3.8 percent in 2019 and increase 0.4 percent in 2020.
GABB Holiday Gala Set for Dec. 6, 2018
It’s been a great year for the Georgia Association of Business Brokers, and we’d like to celebrate with our annual holiday gala!
Not only do we honor our Million Dollar Club members, but we get to put on fancy clothes and socialize with fellow members and their significant others. Did I mention we also help support foster children at the same time?
This year’s gala will be held at 7 p.m. on Thursday, Dec. 6, at the Capitol Grille in Dunwoody. That’s right across the street from where we had the party last year, and NOT in Buckhead (we love you, Buckhead, but traffic on a Thursday night during holiday shopping season was MURDER!).
All GABB members plus a guest are invited to attend the event. We ask that you bring an unwrapped toy, diapers or clothing worth at least $25 to be donated to the Foster Care Support Foundation. This wonderful group provides free clothing, infant equipment and developmental toys to thousands of children in foster and relative care throughout Georgia.
Please let us know that you plan to attend the party by filling out this form.
Let Diane know if you have any questions by emailing her at georgiabusinessbrokers@gmail.com or call 404-374-3990.
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