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Florida Lead the US in New Business Filings in 2021

March 31, 2022

Florida accounted for 11.7% of new business applications filed nationally from January 2021 to January 2022 according to U.S. Census Bureau.  Florida had 683,680 out of the 5.8 million applications.

The companies keep coming to South Florida, regardless, or possibly because of the COVID-19 pandemic, a new burst of inflation, and now, a globe-jarring war in Eastern Europe.

One of the latest arrivals from out of state: ATN Corp., a maker of optics for civilian use, law enforcement, and the military, which announced Tuesday it has relocated its headquarters and manufacturing facilities from California to Doral in western Miami-Dade County.

The move is yet another example of the flood of companies heading to the Sunshine State, and a continuation of strong numbers that show Florida a national leader during the pandemic in attracting new businesses or becoming a home for startups.

“All parts of Florida are firing on all cylinders with respect to economic development and job creation, particularly here in South Florida,” said John Boyd, principal of The Boyd Co., a relocation consulting firm in Boca Raton.

Florida’s low-tax advantages over other states still serve as an important incentive, he said. But these days, the factors also include bigger pools of skilled workers and the state’s decision to strip away pandemic-related regulations.

Some of those workers are migrating here with their companies, he said. “I think the talent assets are now appreciated by a global site seeking audience,” Boyd said. “Florida is now the recipient of highly skilled technical workers, not just from New York and New Jersey, but states like Illinois and California. There is a new phenomenon where we are seeing unprecedented interest from California companies.”

Bob Swindell, president and CEO of the Greater Fort Lauderdale Alliance, the economic development arm of Broward County, said out-of-town firms are looking for lifestyle benefits they might not find in northern cities.

He mentioned a financial services firm that was in town last week looking at a potential location in Fort Lauderdale. A company executive who already lives in the area talked up the schools, the available staffing talent, the lifestyle and tax climate among his colleagues. “It’s a life-work balance that people are taking about,” Swindell said. “More important is what are their choices outside of work?”

New figures from the U.S, Census Bureau for 2021 affirmed that Florida was a national leader in the formation of new businesses as out-of-state companies continued to flock here and entrepreneurs started enterprises from scratch. Analysts said the trend was a function of a more business-friendly state during the COVID-19 pandemic.

 

Tipping points

Economic development promoters, business lawyers and real estate brokers all agree, the pivotal factor for businesses deciding to come to Florida has been the state’s decision to keep its businesses free of various closure orders, hours restrictions, vaccination and mask requirements and other measures designed to curb COVID-19 during most of the pandemic.

“Florida is a great place to live and work,” said Steve Lemenov, director of marketing for ATN. “It’s far less expensive than the Bay Area and so much more business-friendly. But I think the most important reason are the people. We’re able to fill our positions here faster and with more qualified skills.”

Kelly Smallridge, president and CEO of the Business Development Board of Palm Beach County, asserted the state offers businesses more clarity about the the regulatory environment they face.

“The idea of certainty is greatly valuable to employers coming from states where certainty was never delivered. Companies do not like the idea of being shut down. Nor do they like the idea of being open on day and forced to shut down another.”

She said many companies undertake full-blown comparative analyses of how their current locations match up with potential landing spots in Florida.

The factors include taxes, the cost of labor, housing and transportation, and their ability to attract to work force with the right skill sets.

“The point where they absolutely pull the trigger is when their employees say ‘yes, we are ready to move,” Smallridge said. “The mere idea that employees [will] move is an encouraging sign.”

“We’ve seen all of those stars align over the last two years,” she added. “Many companies are realizing the business environment in Florida is very robust and business friendly, not to mention we are the gateway to Latin American and Caribbean markets.”

 

Pre-COVID momentum

Jonathan Kingsley, executive management director for Colliers International, the real estate service firm, agreed that the state’s political decision to keep business open during the pandemic gave Florida a leg up on other states.

“It really starts at the legislative and political level,” he said.

Legions of northerners flocked to Florida as short-term, visitors, new homebuyers and operators of new businesses once it became known that residents and customers could roam streets and neighborhoods and even eat outdoors amid limited or no restrictions. Many opted for Florida as a great fresh air haven with its beaches and open green spaces, even though its urban areas have become more densely populated over the years.

But Kingsley said the state already had momentum toward new business development as an estimated 1,000 people daily were moving south prior to the pandemic.

“That was sure accelerated through COVID,” Kingsley said “You look at that as the gateway effect. Beyond that, people just found it as a good safe place to get through COVID.”

Early on, he said, the firm started tracking “all of the major residential sales where executives were placing a stake in the ground” by purchasing homes in South Florida.

“Then they jumped in full body,” moving their companies and their employees to the region and in turn, generating demand for office and industrial space.

In 2021, Fort Lauderdale picked up more than a dozen new entrants, including financial firms such as PJ Solomon, an investment bank, PinBridge Investments, an asset management firm and BelHealth Investments. West Marine, a marine supply firm, moved its headquarters from California. Future Tech Enterprise Inc., a technology firm, moved its headquarters from New York.

“The amount of activity we are seeing in office and industrial is beyond our expectations,” he said. “And that is purely the result of population growth.”

Attorney Robert Lewis, whose Spiritus Law advises restaurant and club operators how to get started, acknowledged he’s seeing a “significant migration of new businesses” coming to Florida from the Northeast and West Coast — all looking to start anywhere from South Florida to Orlando to the Panhandle.

“We’re seeing a rebirth of the hospitality industry in general,” he said. “Restaurants and nightclubs coming back in a big way.”

Many of the businesses he advises are those that went dark during the pandemic and are now run by people with fresh investment money. “We’re looking at more startups getting into the alcohol and hospitality business,” he said. “Small moms and pops are looking to get into restaurants, and package liquor stores have increased in popularity.”

The high demand Is reflected in the soaring prices of liquor licenses.

“The value differs from county to county,” he said. “If we look at Miami-Dade County that license prior to 2021 was worth $175,000. As of today that license is worth $460,000 to $475,000.”

Connect with us:
Rebeca Castellon Group
305-600-8493
Rebeca@Property305.com

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Source: https://www.sun-sentinel.com/business/fl-bz-florida-business-formation-leader-20220309-2fwvabfjzrhs5itf6q7jww7h54-story.html

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