Despite its laid-back vibe, Atlanta is considered a rising star of the business world. Here's how to navigate its challenges.
At Octane, a trendy independent coffee shop in Atlanta, owner Tony Riffel says sometimes he feels more like he's running a business incubator than a corner hang-out. That's because customers sometimes treat him like a business consultant, seeking his suggestions for a graphic designer, contractor, or skilled craftsperson. "I can just look around the room and point out three or four people," Riffel says. "Atlanta's kind of like a big small town. You run into people you know all the time. It doesn't feel nearly as big as it actually is."
Atlanta is one of the fastest-growing cities in the South and, for much of the last decade, was the fastest-growing metropolitan area in the whole country as its population grew by 20 percent between 2000 and 2006. Business owners and experts tick off the reasons they consider the face of the New South to be a rising star in the business world: among them, the climate, the airport, the univesities and technology incubators, the lack of red tape, and the sense of civic pride.
For those who like Atlanta's lower level of intensity compared to other cities, the future, they say, is promising enough to make the nickname "Hotlanta" apply to more than just the weather. But doing business in Atlanta is not without its share of challenges. Local restaurants are booming and the art scene is vibrant, but several high-profile technology companies have picked up and left town for the West Coast or elsewhere. The sprawling metropolitan area and lack of public transit can make traffic oppressive. So is Atlanta a good fit for your business? Here's what you need to know.
Starting a Business in Atlanta: Why Atlanta?
Ask someone why they do business in Atlanta, and the answer is almost invariably the same: 'It is a confluence of great climate and a relatively low cost of living,' says Michael Blake, an entrepreneur whoco-founded StartupLounge, a non-profit that aims to foster the startup community. 'You still find many of the amenities you'd find in most metropolitan areas.'
To Blake's point about the cost of living, a person earning $40,000 a year in San Francisco, for example, only has to earn a little more than $23,000 for the same standard of living in Atlanta.
Attracted by the low cost of doing business, corporations such as Coca-Cola, Home Depot, UPS, and Delta Air Lines, all have major operations in Atlanta. That concentration of buying power is good news for entrepreneurs. 'If it's a business-to-business type company, you've got a lot of really good potential clients in the backyard,' says Greg Foster, an Atlanta businessman who was a partner with Atlanta venture capital firm Noro-Moseley Partners and formerly ran corporate development for Turner Broadcasting, which is also based in Atlanta.
Hartsfield-Jackson International, the world's busiest airport, makes business travel easy, and attracts international clients, says Gail Margolies Reid, an Atlanta CPA and business consultant who this year wrote the book The Complete Idiot's Guide to Low-Cost Startups. Add onto that the two large Georgia ports out of Savannah and Brunswick, in addition to a train system, and the city becomes very attractive to large corporations. 'It all makes it much easier to move goods in and out of Atlanta,' she says. 'Atlanta is very commonly a distribution center.'
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Starting a Business in Atlanta: Sprawling Options for Location
With only a small downtown area that doesn't hold much residential housing, the sprawl of the city creates challenges. The city of Atlanta comprises 131 square miles, but the greater metropolitan area extends much farther. Consider that Boston, a city with a comparable population, is only 48 square miles.
Is foot traffic important? If so, the hip, walkable neighborhoods of Virginia Highlands, Little Five Points, and West Midtown are probably your only location options. If space is a more pressing factor, new office construction has popped up out toward the suburbs at a rapid pace.
The stock of office space in Atlanta is at an all-time high, says Richard Bowers, president of Richard Bowers & Co., an Atlanta commercial real estate firm. 'You've got some world-class trophy buildings that have been around Atlanta for almost 20 years,' he says. 'You can make a great deal right now because of the office market and the economy.'
When Bowers first started in Atlanta, the city had just 30 million square feet of office space; in the last three decades, it's increased to 50 million square feet in the urban area and 90 million square feet in the suburban corridors. Two-thirds of all growth right now is in the suburbs, he said.
Some of those suburbs that were once part of Atlanta have broken off and formed their own municipalities. Reid advises new business owners to pay attention to which borders they're crossing: some governments are easier to deal with and more business-friendly than the old bureaucracy of Atlanta proper, she says.
Many large companies prefer the suburban areas such as Alpharetta to be closer to the housing markets, Bowers says.
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Starting a Business in Atlanta: Scouting Space
George Frangos lucked out when he found a location for FarmBurger, his farm-to-table grass-fed beef burger joint.
The reason he lucked out? The struggling economy.
He found a site on a main thoroughfare of Atlanta-adjacent Decatur that once held a bakery, with pre-installed restaurant infrastructure.
'There are a lot of opportunities given the economy,' Frangos said. 'We got in really cheap. We bought a lot of used equipment, did a lot of the work ourselves. We didn't have to have the huge backing of mega bucks to get going.'
He feels bad for feeding off other business's failings, but his plan so far has been a hit: Farm Burger has been receiving rave reviews for its sustainable beef burgers from its farm in Athens, Georgia, since it opened in April.
While Atlanta's economy has wobbled recently, office space remains at a relative steal compared to other metropolitan markets.
In the up-and-coming area of Buckhead, office space can be found for as little as $15 per square foot per year, said David Cummings, CEO and co-founder of Pardot, a provider of interactive marketing solutions, which was named Atlanta's fasted growing technology company at the 2010 Atlanta Business Chronicle Pacesetter Awards.
'If you want to go to the suburbs, it's wildly cheaper than New York or San Francisco,' he said. Commercial space occupancy was well above 90 percent in the 1990s; in the last decade, it dropped to 80 percent, Bowers said.
When chef Kevin Rathbun was looking for a place to open his first restaurant in 2004, he scoured all neighborhoods of the city looking for an affordable location. He eventually had a good feeling about an old potbelly stove works facility in the Inman Park neighborhood. The area was unimpressive at the time: only about two or three restaurants and defunct industrial spaces. Now it contains more than a dozen eateries, and Rathbun's has been lauded as the best restaurant in town by Creative Loafing, Atlanta Magazine, in addition to receiving national acclaim from Zagat, Travel & Leisure, and a host of other publications.
'I think this area was up-and-coming. I hit it perfectly,' Rathbun said. 'It was an area that was going to re-gentrify and become the cool area of Atlanta. A whole lot of people have seen the growth and they just keep coming. It's a cute neighborhood, it's got a history.'
Frangos estimates he saved $150,000 alone just by finding his pre-used location. 'Other people's losses might be your opportunity,' he said. 'The barriers to entry dollar wise were a lot lower given this economy.'
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Starting a Business in Atlanta: Traffic Issues
