There are many factors to consider before relocating your company. BusinessZeal will cover all the important points that you should consider before moving your company, which will enable you to take an appropriate decision.
“If one does not know to which port one is sailing, no wind is favorable.”
– Lucius Annaeus Seneca
Relocation can be an important make-or-break decision for your business. Take such a major step if relocation is the only option left. A number of factors, like business growth, hike in rent and labor costs, personal reasons, availability of raw material, etc., may prompt you to relocate your company.
However, before you take such a decision, make a list, and weigh the pros and cons of relocating your business. If you think that the current location is not helping the business and there are many benefits in relocating, then go ahead with your decision. Some people even keep both locations working simultaneously for a few days. This helps them to test how the new location fares for their business.
Apart from this, there are a few more factors which you should consider before relocating your company. This BusinessZeal article will inform you about the same.
Safety and Reputation
Consider the safety quotient of the area that you are planning to shift your business to. If it does not have a friendly neighborhood, you will have a difficult time in finding and retaining talented employees. The number of customers approaching you may also subside due to this factor. Also, it can affect the image of your brand drastically. Hence, ensure that you move to a safe area where people will not feel threatened to approach you for business.
Proximity to the Target Consumers
It may so happen that most of your target consumers will be placed near your new location. In this case, it will be highly advantageous for you to relocate your business to that place. However, if your target audience is located near your current location, then there are chances that your business will suffer. Hence, it is best to consult the clients first and ensure that they will be ready to travel for your product or service. Also, verify if communicating over the phone or email is okay for them. If they say no, then there are chances that these clients will move to your competitors once you relocate.
If the area you are planning to move to has many businesses which offer similar products or services, then it may become extremely difficult for you to establish yourself and survive the competition. Hence, ensure that when you relocate, you do not face much competition from the existing businesses in that particular area. This can be done by shifting your business to a location where there are limited number of competitors and a good demand for your product.
When you relocate, you will have to be prepared to lose a few good employees. They may not want to relocate with you, and may prefer to leave the job instead. This can affect your business drastically, as many times, clients are used to dealing with a particular employee, and may move their business with him to a competitor. Also, training the new staff will incur you additional expenses. You must take all these things into consideration before you decide to relocate your business.
Consult Someone Working in Same Area
Do some online research about the demand for the product or service you are offering in the same area. To get this information from a credible source, it is advisable that you consult someone who has been working in the same area. He will be able to guide you about the business prospects in that particular area. Also, you will be able to get a firsthand account about the location, and will also be able to corroborate the facts you read on the Internet.
Visibility and Promotion
It is important that your business is located at a prime location in the new area. It will be especially advantageous if it is located near commercial areas, malls, train stations, other larger businesses, etc. As many people will be visiting these areas, it will make them aware about your business, and, thereby, your products or services. Once the news about your business spreads by word of mouth, it will gain popularity. Try to arrange for promotional schemes which will draw the attention of your potential customers.
Research if you will be getting any kind of tax advantages or if there are any tax disadvantages involved in shifting to a new location. Consider the amount of sales taxes as well. Some states may charge a tax for commercial leases. This means that you will have to pay more cost on your rental commercial property. Find out how this move will affect the taxes of your customers, or else they may have to shell out more. This may cause them to switch to your competitors.
After ensuring that the business premises and the surrounding areas are safe, check out the cost of renting them. If it is too high, calculate how long you will be able to afford it until the business picks up. Check if the other businesses in the area have a similar clientèle as yours; this may not work in your favor. Check out the amenities which will come with the business premises. If they do not have a proper parking facility for the clients and employees, it may have an impact on your business.
Ensure that the new location is conducive for the growth of your business. If there are too many competitors and too less customers, the result may not be as desired. Also, it will be difficult for you to establish yourself as a new business in that location. Consider if the location will support your business expansion plans and multiply your profits. If this move will not boost your business growth, then it is not worth the effort.
You may observe a sea change in the attitude of people in different locations. This means that you will not be able to easily implement the same work culture as the current office in the new one. There may be disparity in the way people look at their work and take it seriously. Think about this as well before you decide to relocate your company or you may regret this decision later.
Relocating a business is going to cost a lot. Imagine moving everything from one location to the other. Transport costs are going to skyrocket. You will also incur heavy expenses in furnishing the new premises and training the new staff. You may also have to spend a certain amount for advertising. Making contracts with new vendors for raw material, transport, etc. will also cost a lot. Also, even if you decide to import raw material from some other state, it may increase your costs. To cover up these costs, you will hike the prices of your product or service. This may cause you to lose customers and, thereby, revenue.
Apart from this, also ensure that you have a proper access to raw material in your new location. Speaking to someone who has recently relocated his business in the area will also help you. Don’t forget to take a strategic decision by calculating the risk involved in the relocation. Check the lease agreement of your current location; you may not be able to leave immediately. Visit the new site personally a couple of times, and understand how your business will survive in the area. Now that you know what to consider before relocating your company, conduct a thorough research before going ahead with your decision.