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Feb. 21, 2005 — As nanotechnology companies mature from pure research to commercialization of a product, many will face the challenge of finding appropriate facilities to conduct research, manage businesses, and in some cases, manufacture products. University labs or other government-funded laboratory facilities will no longer be sufficient.
Similar to most businesses, facilities will be one of the largest expenses that nanotechnology companies will incur in the operation of their businesses. In fact, for most corporations, the real estate/facilities expense is the second largest line item on the income statement after personnel. Managing this expense effectively will be crucial in determining the success (or failure) of many nanotechnology companies, particularly in light of the specialized nature of the improvements that will be required in these facilities.
Focus on stages
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When it comes to securing a facility, nanotech companies should focus on four key stages: team selection; development of a strategic plan; site selection and negotiation, and project management.
Selecting the right team provides the baseline for the entire project. The team should consist of internal employees and outside advisers and consultants. From within your organization, it is important that representatives from finance, information technology and human resources all participate. Many smaller companies understandably will not have dedicated personnel in each of these roles, but the internal representatives must understand the goals of each of these functions.
The next step is the selection of a qualified real estate adviser who understands nanotech facilities issues, has market knowledge in the geography of your future location and can assist in assembling other temporary outside consultants. In most cases, a qualified project manager is the next team member you will need. The project manager is critical to the development of the strategic plan, and also to the validation of assumptions made during the site selection process. In addition, he or she will help hire, coordinate, and in some cases manage the remaining members of the team you will require to successfully complete your move (e.g. architect, vibration consultant, contractor, cabling contractor vendor, moving company, etc.). Working with a real estate provider who delivers both corporate advisory and project management services can simplify the team selection process.
Construct a strategic plan
Once you have assembled the key members of your team, it is time to put together a strategic plan. This really comes down to accurately defining the research, business, and production needs of your company, which your team will then “translate” into a facility that fits those needs. For example, your real estate adviser may put together a demographic map and drive-time analysis to insure that your future location will allow you to retain your key employees and attract new ones. A space program that takes into account the growth of your business over the projected lease term and beyond is an essential step to ensure that your facility will have enough space to accommodate your growth, but not so much that you are needlessly paying for space that acts as an expense anchor on your bottom line.
Nanotech companies have many factors to consider that other companies don’t need to worry about. For instance, does your research require vibration isolation for certain applications? Do you require a clean room, and if so, how much and what class? Will you be installing fume hoods? It is important to take these factors into account in the planning stage, so you don’t waste efforts during the site-selection stage looking at facilities that won’t accommodate your needs.
Move on to site selection
Using knowledge garnered in the strategic planning stage, you are now ready to proceed with site selection. Your real estate adviser should be able to assemble a list of logical properties that fit your space criteria, conduct tours and work with you to narrow it down to a short list. Your project manager can help you evaluate the feasibility and cost of each site on the short list, taking into account any existing infrastructure as well as any required improvements. Your real estate adviser can then prioritize specific requirements during negotiations with the respective landlords. Finally, after negotiating the best possible business terms on your chosen site, your real estate adviser and legal counsel will assist you in negotiating a lease document that reflects your business objectives.
The final stage is effectively managing final preparations and coordinating the move. Your project manager, along with your internal team members, will oversee the construction of the required tenant improvements, the installation of furniture, information technology infrastructure and any equipment your facility requires, and the physical move of your business to the new location. This is the point where the vision laid out in the strategic planning stage becomes a reality. Defining and maintaining a realistic project timeline, along with the integration of the correct resources at the proper time, will lead to an occupancy that is achieved on time and on budget.
There are many hurdles for a nanotech startup nearing commercialization of a product. By following a defined process as described above and working with a full-service real estate advisory project team, business interruption can be minimized and opportunities to drive real savings to the bottom line for core business reinvestment can be realized.