When it comes to overseas expansion, especially in a market as large as the US, the options for where to base your office can seem limitless. This can give the process an element of not knowing where to begin, let alone reach a conclusion that everyone can feel confident about.
This is where Tenzing Sherpas, in collaboration with management teams, add real value to our portfolio businesses. They offer more than a dedicated resource for project management and bring an analytical, rational and efficient approach to making such an important decision.
World-leading film and TV content licensing company MPLC has a long-standing US HQ in Los Angeles, where it was founded in 1986. This has been crucial for maintaining strong relationships with major movie studios. However, as a fast-growing PE-backed business, MPLC saw an opportunity to expand its US operations with a scaled outbound sales function. The objective was to better serve and grow its target customer base, not just within existing verticals, but also as the business expands into new sectors.
Developing company culture in one hub-like location meant expanding the LA office was an initial option. Yet a number of factors made MPLC reconsider this. While LA will remain a critical location for the business and has a large talent pool, this comes with the intense competition of prestigious employers. Cost of living and, therefore, salary expectations are also high. Also, it can be a difficult city to travel across with some of the company’s existing staff already grappling with long daily commutes. With LA ruled out, next steps were unclear.
Evidently, a selection process with a robust methodology was needed to give focus to an exercise that could otherwise be likened to finding a needle in a haystack.
Tenzing Sherpa Rory Shedden, who has been embedded within MPLC as Chief of Staff since 2020, was able to offer the direction required, leaning into his business consultancy experience and analytical skills.
Organising the data
Rory made the decision to focus on a number of key criteria. He compiled data from sources such as Forbes and USA Today’s “Best States for Business” rankings and Oxfams’ “Best States to Work” list. He also spent time researching factors such as:
- Population – size as a proxy measure for talent pool potential
- Direct flights to the UK
- Internal US transport connectivity – MPLC’s sales process is almost entirely performed on the phone, by email and post with almost no need for in-person meetings with clients and prospects. However it is important for staff in LA to be able to easily visit any new office
- Time zones
- Commercial real estate prices
- Indicators of the cost of living and salary levels, such as median household income
- Unemployment rate – too low and recruitment is difficult. Too high can indicate a poor local economy
- Universities – considering the number, size and quality. However, the weighting of this factor will depend on the nature of the team needed. Some businesses require very specific skills; say software engineers or niche manufacturing experience. MPLC recruits talent from across the spectrum – filtering by ability to learn rather than specific industry expertise. This therefore was less of a priority for MPLC’s location selection
- Quality of life – influences the ability to attract great staff, for example, local school quality, average commute time and access to green space/leisure opportunities
- State income tax – varies by state, and can also make a big difference to the quality of life for staff
- Litigation environment – some states are much more business friendly so this can help choose between tied locations
Naming a shortlist
States, then individual cities, were scored, producing this shortlist that warranted even closer consideration by the MPLC management team following an initial appraisal:
- Austin, Texas: trendy but not cheap, with high talent competition
- Boise, Idaho: a fast-growing hidden gem
- Boston, Massachusetts: excellent talent pool, but expensive
- Lakewood, Colorado: very close to Denver
- Las Vegas, Nevada: appealing talent pool and great transport links – but potentially negative connotations with the gambling industry
- Raleigh, North Carolina: part of the Research Triangle with lots of highly skilled staff and direct flights to London
- Salt Lake City, Utah: popular city for sales staff and tech skills. Good connectivity, but not cheap
- Spokane, Washington: lots of good attributes, but small
Rory and the team learnt and adjusted the process along the way. For example, the first version of the shortlist ranked very small cities as top choices, despite limited talent pools and poor air connections. MPLC had to re-weight these factors to refine the analysis. The final decision needs to be data-informed but must acknowledge the ‘touch and feel’ instinct of management, Rory advises.
Once the “finalists” were agreed – Boise, Salt Lake City, Las Vegas, and Denver – it was time to reach out to local economic development organisations. They can be invaluable in offering local insight, such as office space providers and the tax system.
The MPLC team also engaged with local recruitment firms to dig into the labour market and validate their assumptions. Rory also made a point to consider legal and tax planning. For instance, which state to incorporate any legal entity in, and how to structure operations efficiently for sales tax. These decisions can be complicated and it’s important to assess this upfront and get expert advice if needed.
And of course, if possible, site visits provide an unparalleled human feel for a place.
Salt Lake City emerged as the top choice for MPLC’s new US sales office, which Rory then helped the team launch in early 2021. They are initially based in a great co-working space in the popular suburb of Sandy, with a wide range of options to expand as the operation grows.
A number of promising new hires are already settling in, with plans to grow headcount over the year. The MPLC team is trialling a new training and onboarding approach, with plans to keep iterating and improving. UK management visits are, of course, impacted by COVID, but together they’ll work out the right rhythm in time.
The analytical yet human approach Rory brought to MPLC’s US city selection process, coupled with constant interaction with the MPLC leadership team, defined a clear direction, while allowing for adjustments along the way. He’ll continue to support them on their US journey, and will be first in line to get on Salt Lake’s City’s ski slopes.
Are you going stateside? Click here to discover how to choose the location for your team.