There may be many reasons for relocating your small business. Knowing what type of impact a relocation will have on your business is essential in order to determine your success.
If you are planning a move in order to be closer to customers, conduct demographic research, examine competitors in the area and determine whether or not you will interface with customers prior to making any move. Take a look at references such as The Statistical Abstract of the United States, which provides useful information that can help you narrow down your list of choices.
If you want to streamline business operations, consider whether or not you should move a specific part of the business to another area (such as moving a manufacturing arm). Another alternative is to combine sales and manufacturing in one location. Examine these options closely and determine which choice is best for your small business – it could provide the flexibility and convenience that you need.
Although, saving money is always a factor in making business decisions, make sure you’re looking at the big picture and vet all financial possibilities. For example, if you move to an area with a more favorable tax structure, will you then lose money on transportation costs or having to remodel your new space? Additionally, although you may save money on real estate, does the new area you’re choosing have the talent pool you will need to drive your business forward?
If you are considering opening more than one outlet for a retail operation, be sure that your stores are far enough apart geographically that they don’t cannibalize each other’s revenues. Additionally be sure that you have the manpower to staff both locations, as well as the personal bandwidth to manage multiple locations.
If you have considered these factors and decide to move forward with relocation, the following are some tips to remember:
Investigate lower rates for new businesses in your potential locations on everything ranging from electricity to workers compensation insurance to tax concessions for certain types of businesses.
Undertake an audit of environmental and/or regulatory issues long before you sign a contract for a new space. Failing to look into whether your new location is near a landfill, or has sewage run off underground, can require an expensive remediation effort that can quickly eat up any cost savings you hoped to realize.
Apply for all the relevant licenses and permits and register with state and local tax authorities, no matter how redundant it feels.
Consult a tax advisor to determine if you can deduct relocation costs on your tax return, including research trips, travel and moving costs.
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Finally, make sure the timing is good. Ensure you and your staff has the energy to undertake a major project at this time. A relocation effort can take anywhere from several months to several years before it is complete, and there will be some inevitable interruption of business. On the other hand, once you are settled in your new location, you may rediscover some of the excitement that you had when you started your business the first time. Relocating your small business naturally involves some risk, but as an entrepreneur, you know that’s when you have the opportunity to earn greater rewards.
