I've always assumed> that new companies put their headquarters in the towns where their founders sleep and eat. But a recent poll by Zogby International found that 45 percent of small-business owners might be willing to relocate. This may explain the weed-like growth of one of the strangest niches in business journalism: the "best places to do business" survey.
Greenville, S.C., is the town that got me wondering about the best-place phenomenon. I was recently bombarded by glowing results and testimonials from the Downtown Greenville Development Initiative, a local booster group. I'm sure Greenville is terrific, but can we take at face value the myriad beauty contests it has won? For instance, Greenville is ranked the Top Micro North American City of the Future by fDi Magazine. But fDi, which serves global megafirms, doesn't exactly put convenience first; it recently also designated Iraq's Anbar province as a great place to put down corporate roots.
The booster group trumpets Greenville's designation as the least expensive midsize location for business, in a survey by accounting giant KPMG. But they don't tell you this first-place finish came in 2006; by 2008, Greenville had lost its crown. In another 2008 survey, by Relocate-America.com, it ranked as the nation's fourth best place to live. How is that survey's top 10 decided? By write-in vote-which can give well-organized boosters a leg up. (A spokesperson for the Greenville group says they were unaware of this.) "Community enthusiasm is more common in the South," says survey editor Steve Nickerson. "You don't find it in Maine." I'm dubious about the value of this methodology, in part for personal reasons: In Relocate-America's 2009 poll, Greenville is on par with Cuyahoga Falls, Ohio. I have tracked this suburb of Akron for many years-it's my hometown-and can attest to it being suffocatingly average.
Most of these survey results are based on data like tax rates, the number of college-educated workers and average rents (all measures by which Greenville does well). But many also hire academics or other experts to create secret-recipe methodologies and make judgment calls about who's better than who-creating discrepancies that can leave readers confounded. The subjectivity of the process also leaves room for cities to lobby the scorekeepers. Asked why Greenville had been left off one survey's Top 20, the Greenville development group's Kym Petrie told us, with some consternation, "We need to get our message out better."
Whatever the polls say, entrepreneurs who move are usually looking for an appealing workforce, lower costs and, harder to measure, happiness. Steve Wagner, 36, moved from Seattle to Greenville in 2006 to start an online business service called Dealer Ignition. Why Greenville? It helps that it's small. "You can plan events based on what you want to do rather than on traffic reports," says Wagner. He loves the climate, and thanks in part to the 250 international companies with outposts there, his family lives in a cosmopolitan environment. These were all things he considered while scouting for a location-but he doesn't recall relying on any "best places" survey.
Ultimately, when you see some metropolis popping up on a list of "hottest American cities," it's hard to know whether it owes its selection to immutable facts or a well-funded chamber of commerce. In the end, of course, you might win either way. If a city has a civic organization that cares enough to splurge on a publicist, it's likely to welcome start-ups with open arms.