Business This Report Recommends Online, Inc.'s Relocation Term Paper

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Business

This report recommends Online, Inc.'s relocation from San Francisco to Dallas. There are substantial savings in the major components of operating costs including office space, labor, and overhead. Exhibit 1 contains a breakdown of the estimated annual operating costs for Dallas which totals just $3,253,373. Labor and overhead will be approximately $433, 836 lower in Dallas with other savings potential coming from very inexpensive office space and lower tax rates. Also, the quality of life is very attractive to Online as a corporation and to its employees.

Data has been gathered from a variety of sources to calculate the cost of office space, replacement labor, and overhead. The findings show potential savings across all categories. First, the total cost of meeting Online's square footage requirements for sales office, manufacturing, and warehousing is only $148,000. Dallas is currently experiencing a tenant's market and offers many affordable options for renting space.

Replacement labor costs are also significantly lower in Dallas than San Francisco as shown in Exhibit 2. This report assumes that Online will not be adjusting the pay scale of employees that it transfers from San Francisco to Dallas.

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Online will save approximately $399,360 if it replaces thirty factory workers, ten management and professional staff, and fifteen sales and customer service employees with employees hired in Dallas. Although the cost of sales employees will be $27, 456 higher in Dallas, this figure is significantly offset by a reduction in the cost of factory workers of $290,160 and a reduction in the cost of professional and managerial employees of $136,656. As Online continues to expand its business operations, labor savings could potentially be in the millions.

Finally, Online will also enjoy substantially lower overhead costs in Dallas. Based on a nearly forty-three percent reduction in the cost of living in Dallas vs. San Francisco and Online's current overhead of $60,000 per year, the annual overhead savings of relocating to Dallas will approximate $34,476.

Dallas was voted the number one best city for business by Fortune Magazine in 1999. Online can expect to draw on the talents of a highly capable workforce thanks to Dallas's thirty-one colleges and universities and more than one hundred technical and vocational schools. Dallas's population is well over one.....

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"Business This Report Recommends Online Inc 's Relocation" (2003, March 05) Retrieved May 22, 2025, from
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