Any business, even internet-based, must have a physical location that is suitable for its main activity. Finding such a location might seem easy at first, but can prove to be an arduous task. There are numerous things that should be calculated in, such as rent, location, accessibility, size etc. Even top-notch managers in charge of relocations cannot fully grasp the real estate game, but we can offer some help. The following points should be considered in advance when relocating your business.
Every business is unique and requires a certain type of resources that can be ready and at disposal. For some companies, this might include a developed road network of highways. For others, it might simply mean that office space has proper plumbing and electrical wiring. For each possible location, look at its surrounding area to see if it meets all your needs. For instance, employees should be able to have access to food and drinks during the lunch break if there is no canteen. A building on the outskirts of the city with nothing around for miles is not suitable, no matter how low the rent is.
Tightly associated with the infrastructure is the location of the business. If there are good roads and public connections, then a location outside the urban area can be considered. Otherwise, choosing a downtown space is more desirable. Since you are relocating, there are bound to be disgruntled employees whose old location was just across the street from they live. On the other side, there will be those who are thrilled with the move, so make sure there exists a balance between these two groups. If the price and the infrastructure are right, you might consider providing some of the employees who live far away with a company bicycle or a monthly bus/train pass.
Buying or renting?
This issue mostly depends on the fact how much you are willing to spend and what your plans for the future are. The former can be resolved by a bank loan, but the latter should involve much more planning. If the company is doing well, then consider purchasing the property for the years to come. If you are relocating for reasons other than business expansion, then renting is perhaps wiser, at least at first. For example, in Australia’s capital, which is a world-class start-up hub, the discrepancy between the costs of buying and renting office space can be quite large. That is why local businesses aim to hire a reliable Sydney property agent that can assist them with every relocation or setting up a new business. Anyhow, the decision to buy or rent should not be taken lightly and requires much deliberation.
Your company probably already has a security system installed or you work with a security firm. However, after the move, the crime “microclimate” changes completely. The old security measures you once took might prove inefficient if the crime rate is higher in the new neighbourhood. Erecting a fence, installing CCTV or improving the locks are just some of the ways your security might need improvement. Of course, if you move into a more affluent area, it could be possible to do away with some old security measure if it’s safer there. Best consult security advisors or the local police department on what to expect.
Many businesses move precisely because of the location that would make them more competitive with the customers. However, a more attractive location does not necessarily guarantee a bigger turnover. What entrepreneurs fail to do is to research the market for existing competition there. This results in over saturation of the local market, failing to provide the desired increase in revenue the new location was supposed to bring. Additionally, competition intensifies if there are several businesses packed close together, so you could be forced to lower the price of the goods or services you provide, which results in a decrease in profits.
How to spot a bad neighbourhood
Sometimes even when all the major prerequisites are met, a certain location can still be bad because of the neighbourhood. You should learn to recognize such areas by several telltale signs. Firstly, students will leave this area to get a higher education, which means that the number of potential customers (and employees) is shrinking by the day. Be sure to check the unemployment rate because a high one might indicate that the residents simply do not earn enough money to afford your product. Check the overall sales of other enterprises and if they are all experience a significant drop, then this might not be such a good location after all. While considering a potential location, you can contact the local chamber of commerce and inquire about investment opportunities.
All in all, planning is a key factor in business relocation. Make sure that you timely take into consideration all the factors, including, but not restricted to: infrastructure, price, competition, and security. By doing so early on, you save yourself the later troubles.