When business people check the cost of doing business in different states they most of the time look at the taxation. For example Nevada doesn’t have state business tax on the other hand California has franchise tax. California franchise tax is additional 8.84% you will have to pay when doing business in California. California has also min. tax of $800, which is the amount you have to pay even if your company doesn’t make any profit at all!
But this is not what I wanted to write about. There are other expenses which make much bigger impact on company bottom line. What about rent or purchasing real estate?
I am amazed by big differences real estate can make on your bottom line. Real estate is my hobby. I like to watch trends and you will find me constantly checking commercial real estate in different cities in the U.S.
Let me just give you an example. You can purchase office in Las Vegas for approximately $300 per sq. foot. The same office can be purchased in Memphis for $100. Let’s say your company needs 10,000 sq. feet office. So you can either spend three million or just one million. That’s a huge difference. There might be even better examples. I just wrote about Memphis, because I am looking at one particular deal there.