Some years ago, a wise man said,

If you don’t know where you’re going, you’ll probably end up someplace else”.

The same idea applies to obtaining government incentives. If you don’t know what’s available, what you want, or understand past precedents, you’ll probably wind up settling for something far less than what you otherwise might have received, or maybe nothing at all.

Financial Assistance Can Be Significant

The biggest and most common mistake companies make with government incentive programs is that they often fail to realize the powerful impact of a properly negotiated incentive award. While many companies view incentives as a nice after thought, the reality is that these incentives can create a real, sustainable advantage for your business. In many regions throughout the world, it is not uncommon to negotiate incentive packages equal to 50 percent of a project’s total cost. Unfortunately, many incentives are lost because companies fail to properly pursue these opportunities in a knowledgeable and timely manner.

Do Your Research

Over the years, we have observed increased competition between states and regions to attract new industries, assist with business expansions, and to help struggling businesses avoid significant job losses. In addition, we have seen incentive packages become increasingly generous.

Surprisingly, many companies believe they will automatically receive the same treatment as their competitors, but nothing could be further from the truth. Our experience has shown that firms that are knowledgeable about available incentive programs, and develop an effective strategy for pursuing these government awards, generally obtain significantly larger incentive packages.

Another common and costly mistake is the notion that incentive opportunities are only made available when building a new plant or operation. In fact, business expansions and other restructuring events often qualify for substantial levels of financial assistance.

Develop an Effective Strategy

To maximize your incentive opportunities, your company must take the initiative. Seldom does the government seek out firms to give away money to, especially when it comes to mergers and acquisitions, as well as expansions of current operations. Therefore, once you have properly researched all available incentives and establish priorities for your business, it’s time to put together a comprehensive business proposal.

If you announce in advance you have firm plans to invest, the government has no reason to provide financial incentives”.

Unfortunately, many companies simply pick up the telephone and inform the government of their intentions by saying, “we intend to build a plant in your region, can you do anything for us?” The only thing less effective would be to announce that you that you built a plant in their region six months ago and now want consideration.

Hutchison Group Can Help

Prepare Comprehensive Analysis and Action Plans

Clearly, government financial incentives should be considered as part of any investment decision, and the labor relations consultants at Hutchison Group have decades of experience helping our clients to identify and secure these valuable awards. Our consultants work with state and local economic development officers to determine what types of incentives are available, review past awards, and develop an action plan to maximize value for our clients.


The above article was written by Cameron J. Hutchison, President and Founder of Hutchison Group, Inc. Established in 1996, the Hutchison Group is a highly regarded management consulting firm focused on all aspects of labor and employee relations; helping union and non-union employers improve productivity, teamwork and performance. Visit our web page at www.hutchgrp.com