E-biznis Proekti

Ten Commandments of Negotiating For Business Incentives
By [http://ezinearticles.com/?expert=Michael_R_Press]Michael R Press

1. Know what to ask for. Rather than ask, "what can we get for our project?", companies should present a specific list of financial benefits which the government agencies have the statutory authority to offer, and which have the greatest value to the business.

2. Keep it competitive. Once a particular jurisdiction becomes confident that your company will expand within their boundaries, your leverage is lost. But they will eagerly step up so long as they believe they must to avoid losing the project to another location.

3. Estimate the benefits to the community that will flow from your project in the way of tax receipts and jobs. Then, present these estimates in an effective manner to relevant government officials. Be sure to give full weight to the "indirect" impacts created through the action of economic multipliers. The most successful companies are those that make a compelling case that their project's credits and grants are well worth the public expense.

4. Adopt a strict internal protocol regarding external communication about the project. Companies need to act and communicate in a highly controlled and coordinated manner in order to maintain their leverage.

5. Favorable tax rulings should be at the top of the list. Oftentimes, a favorable income apportionment ruling will dwarf the value of the best generic economic development package. For this reason, Tax needs to be at the table in devising the "wish list" of concessions.

6. Look for incentives that are cost-free to government. Some inducements that have value to your company may be cost-free to government, and as a result they will be less likely to resist. For instance, fast-track permits, easements and federally tax-exempt bonds may reduce the project's ultimate cost, yet be easier for the governments to "digest".

7. Do not accept the first offer or the "standard" package. It is impossible to know how far government will go until they are nudged. And getting a polite "No" from government has to be preferable to reading about your competitor getting a better deal than yours.

8. Job commitments should be conservative. The media loves nothing better than a broken promise by business to create or maintain jobs in the community. Public officials that come out in support of your company's incentives will be hurt too, by the negative attention.

9. Be prepared to accept: a) a ton of paperwork, b) scrutiny of your plans by government officials and possibly the public at-large, and c) "recapture" provisions that entitle government to be paid back should you fail to meet your job and/or investment commitments.

10. Check Lobbying Statutes and Regulations. States have been very active recently in requiring registration and record-keeping for a variety of activities that are deemed "lobbying" in relation to negotiated incentives. Failing to register or otherwise to comply with lobbying statutes can bring substantial financial penalties and public embarrassment for the Companies involved. Work only with consultants who are well versed in the details of the project state's lobbying requirements, and wherever feasible, avoid activities that fall into the lobbying category.

For more information, contact Michael Press at [http://www.mrpressconsulting.com]MR Press Consulting.

Email: [mailto:Michael@mrpressconsulting.com]Michael@mrpressconsulting.com, office: 203-255-9397.

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