Moving to a new city is oftentimes exciting but scary. Relocating or moving your business to a new city? That can take some adjustment. It is something you should do with careful consideration and analysis for all of the shareholders that could be potentially impacted.
As a business leader, the last thing you want to do is to make a decision that could severely impact your employees and investors or cause your small business to suffer a financial loss.
With that in mind, the weight of this procedure is what makes it such a critical process for those involved in the decision making.
Before delving into the nitty-gritty, let's find out what relocating a business actually involves.
For once, moving your business to a new location can mean several things. It can be simply moving your office from one town to another, potentially across the state. On the other hand, it could mean moving a portion of your office to a new location while still owning the original location.
When you say, "I'm relocating my business", that could mean a series of different things. However, it should never be taken lightly.
That's one of the most obvious considerations, but also one of the most complex because of all the hidden or additional costs involved with relocating a business.
First, business owners should consider the costs that come with relocating a business. It's that simple: the bigger the distance, the greater the potential cost for the relocation. For instance, relocating a 1000-person office across the state will be a lot more expensive than moving a 20-person office across the city.
You will also want to consider how the ongoing costs of operating your business in the new location will impact your everyday operations. Things like your mortgage payments, or lease, shipping, utilities, and salaries could be all impacted. As far as other relocation costs are concerned, there is nothing a reliable forklift operator or moving company can't for your business equipment and other valuable goods.
Let's say you're moving your business from Kansas City to New York. In that case, the renting costs for the new office space and the cost of salaries would most likely increase by a lot.
The "hidden" costs of moving also enter in this picture. Such expenditures vary from one organization to another, so it's critical for those involved in the moving decision to thoroughly assess any financial wonders that could manifest as a result of the relocating.
Building on the previous situation, if you were to move your business from Kansas to New York, would you be able to handle all the costs of your relocating staff?
People are much eager to work for and with an organization that makes commuting a piece of cake. Think of all those times you went somewhere that had problematic parking. Wasn't really nice, right?
But place yourself in your employees' shoes. Having to be dissuaded from going to work just because the parking was hell. Particularly in the winter months when it means having to walk several good minutes in the cold.
To handle the commuting dilemma, your company can lease a lot, build a parking lot, or reimburse for parking. Be wary, though, as this will impact the costs of your relocation and must be taken into account. Having to commute into an office for a great 30 minutes isn't really ideal, so make sure you take your employees' needs into consideration when relocating your business.
When moving cities, states, or even countries, it is critical to evaluate the tax situation of your new business location. Depending on the location you choose and your original location, taxes could make or break the profitability of your business.
Some companies also receive tax credits for having the headquarters in different locations, so make sure to consider those then assessing the tax impact of your moving.
Your customers are the lifeline of your organization's financial health. Therefore, when moving to another place, you should consider the impact it will have on your customers.
That usually comes in the form of great costs (due to the increase in overhead), or maybe a decrease in cost since you will be moving closer to a client.
Some advice: if your organization is hugely reliant on one particular client, then you should be able to understand the risks associated with moving closer to that customer for cost savings. There's also the chance of losing that relationship in the future, a thing that could break your business. But worry not, that's not always the case.
When moving your business to a different city, state, or county, you name it, it is important to consider how the new location will impact your short term but also over the long term.
Let's say you're reaching new levels in terms of business growth and that you plan to double your staff size in the next two years.
Your location matters. Why? Because the location you're dreaming about may or may not have the pool to actually support your business growth. If this growth is most likely around general business professionals like accountants, developers, marketers, and lawyers, it might not be as much of a fear.
However, if you plan on hiring 40 more professionals with an extensive background in Farm Science, you might want to spend hours and days to determine if the new location has the talent pool for that.
Another thing you should think about is the business community, and relocating it might impact your organization. In this case, it's your duty to assess and reduce the community impact associated with moving a business. Do the research and make sure your decision won't impact small businesses in the area due to a decline in patronage from locals.