Amongst the different types of shoring, reshoring is an attractive option for manufacturers wanting to bring their production operations back home. While the benefits of reshoring are obvious and may even attract the attention of private equity investments, one of the most significant challenges lies in finding the right facility to kick-start your operations. Opting for ready-built factories provides a practical and efficient solution for reestablishing production domestically. In this blog, we'll explore the 11 tips to help you find ready-built factories for reshoring.
1. Define Your Manufacturing Needs and Objectives
The first step in your quest for a ready-built factory is clearly defining your manufacturing needs and objectives. What are your specific production requirements and industry standards you need to adhere to? Understanding your requirements will help you narrow the search and find a factory that aligns with your objectives and cost expectations. Search for a facility that fits your needs rather than trying to adapt a poorly suited facility to your requirements.
We have seen factories that tried to force their operations into an overly large facility or one with too many floors, making overall production more difficult and costly.
2. Leverage Online Resources for Manufacturing Locations
The digital age has made it easier than ever to find ready-built factories. Start your search online using real estate platforms and industrial property listings. These platforms often provide comprehensive information about available factory spaces, including location, size, and features. Additionally, incorporating government and local economic development websites into your search can provide a broader perspective on available properties and insight into regional incentives and labor dynamics.
While online tools offer a comprehensive starting point, they should ideally be complemented with thorough in-person evaluations and expert consultations. This dual approach ensures that the selected factory meets your digital criteria and aligns seamlessly with your operational needs and reshoring objectives.
3. Partner with Real Estate Experts to Find Factory Locations
Consider enlisting the help of real estate professionals who specialize in industrial and commercial properties. They have access to a wealth of information on location, size, and factory requirements and can guide you through the process, helping you find the right factory that meets your reshoring needs. This is especially true if you are in an area you are unfamiliar with.
4. Attend Manufacturing Industry Events and Trade Shows
Industry events and trade shows can be an excellent way to network and discover available ready-built factories. Attend exhibitions and conferences in your sector, where you can meet potential property owners and real estate experts who may have insights on available properties.
5. Connect with Economic Development Agencies
Many regions and countries have economic development agencies promoting reshoring and offering resources to help companies find suitable factory spaces in their regions. These agencies often have databases of available properties and can assist with incentives and information on local markets. We have used these organizations when helping previous clients reshore back to their domestic markets. These economic development agencies have helped us receive hundreds of thousands of dollars in tax breaks for previous clients.
6. Consider Existing Manufacturing Industrial Parks
Industrial parks and zones often have pre-built factory spaces and lots ready for occupancy. These locations are designed with manufacturers in mind and offer infrastructure, utilities, and logistical advantages that can streamline your reshoring efforts and lower site development costs. These are especially advantageous in Vietnam and Mexico as new industrial parks are being built rapidly.
7. Explore Special Economic Zones (SEZs)
Some countries have special economic zones (SEZs) that offer tax benefits, simplified customs procedures, and other incentives to attract manufacturers. These areas may have ready-built factories and manufacturing infrastructures available for your use. However, SEZs often have strict material controls, so be aware of the conditions before making any commitments.
8. Conduct On-Site Factory Visits
Once you've identified potential options, it's essential to conduct on-site visits to assess the suitability of the factory spaces. This will give you a firsthand look at the facility, its condition, and its proximity to transportation hubs. Prepare questions about your needs and a good understanding of what you will do with the manufacturing space. We previously worked with a client who had to reinforce the floor because they initially neglected the weight of their equipment, which the factory floor couldn’t support.
9. Check Legal and Regulatory Compliance
Ensure that the chosen factory complies with all local and national regulations. Verify zoning, environmental, and safety regulations to avoid any legal complications in the future. Hiring a local attorney or expert is vital here, as regulations can be complicated and dense.
10. Evaluate the Long-Term Viability of the Factory
Consider the long-term viability of the factory location. How does it fit into your reshoring strategy? Is it close to your target market, suppliers, and workforce? Assess its strategic advantages beyond immediate needs. Your original manufacturing needs and objectives also come into play here, as you assess the long-term viability of the factory location against these objectives.
11. Negotiate Terms and Conditions
Once you've found a suitable ready-built factory, negotiate with the property owner. Discuss terms and conditions, including lease or purchase agreements. Additionally, discuss with the property owner about proposed modifications or renovations you plan to make to the factory floor or infrastructure.
The Road to Reshoring: Finalizing Your Strategy
Finding a ready-built factory for reshoring requires a methodical approach, and factors like cost must be considered. Just because many other companies are moving to a new location does not mean it is necessarily a good idea for you. By following the 11 tips above, you should be able to identify a factory location that aligns with your reshoring objectives. Careful evaluation and due diligence are key to making the right choice, and the journey to reshoring success begins with finding the ideal factory to kick-start your operations at home.
Want to learn more about tips for finding factories for reshoring? Contact us to learn more about how we can help you.
