Thursday, October 19th, 2017

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The Young Entrepreneur’s Guide to Relocating

This post is from guest author Jesse Johnson.

So, you’ve reached the point where you need to establish new roots for your business somewhere else. There are plenty of reasons to relocate, such as moving closer to your main clients, pursuing new market opportunities, seeking lower overhead costs, expanding to a bigger space, or attracting a new workforce. Whatever your reasons, this decision is going to come down to a number of factors, including the demographics of the new area, the potential for your business to engage target markets, the cost of living and operations, and the quality of life.

Although relocating carries risks, it can be the best thing you’ll ever do for your business. Here are a few major considerations any young entrepreneur should keep in mind when relocating.

Where Should You Go?

If you can go anywhere, be sure to choose carefully. There are plenty of smaller towns that offer the potential for strong customer relationships and low overhead costs. Lower costs could allow the business to experiment without the steep financial risks present in larger cities. However, anyone looking to engage within a large professional network may find themselves cut off from other industry professionals. Also, depending on your plans for expansion, it can be difficult to find and retain talented employees in smaller towns.

On the other end of the spectrum, moving to a place like San Francisco would offer a surge of culture, industry, and networking opportunities, but you’ll need to make sure you can afford the cost of living, which is among the highest in the U.S. For a better balance of culture and cost, Austin is a young entrepreneur’s paradise, featuring live music, great food and art, and a relatively young population with a median age of 31. Austin is also home to the University of Texas, which means as your business grows, you’ll have access to a steady flow of qualified graduates who are looking for work.

Of course, relocation doesn’t have to involve a cross-country move. You could find plenty of advantages to relocating within the same area. You might find a more suitable space just down the street that offers lower rent, a bigger space, or better parking for customers and employees.

There is also a trend of businesses moving to the suburbs surrounding large cities in order to lower their costs.

Finding the Right Space

If you have a general area in mind, it’s time to scour the place looking for just the right workspace. Early on in the process, you should make a list of all the requirements a new space must satisfy in order to support your business. This could include things like visibility from the street, a break room or kitchen, sensible parking, technological capabilities, plenty of space to work, room to continue expanding your workforce, and the maximum amount you could feasibly budget each month for rent and other costs.

Look for hard facts about the area, such as traffic numbers, distance to major highways and main streets, property taxes, insurance, operating expenses, build-out costs, the landlord’s reputation, and nearby businesses. You can also subscribe to the local paper or read them online in order to get a basic understanding of the cultural context of the area.

As you move forward with any space, pay attention to the length and terms of the lease. You wouldn’t want to sign on for a multi-year lease if it’s likely you’ll outgrow the space within that time or if business doesn’t pick up as planned. In some cases, even if you sell your business, the responsibilities of maintaining the terms of the lease might fall to the original lessee. This could be particularly disastrous if the person who bought your company hasn’t been paying the rent.

Once you’ve found a few spaces that meet your requirements, be sure to visit each location in person. Aside from inspecting the condition of the facility, make note of the traffic and people you see in order to better understand the dynamic surrounding the location. Spend some time exploring the city in order to get a feel for what day-to-day life might be like for you and your employees.

Employee Considerations

You should let your employees know about the plan to move at least 4 to 6 months in advance. If you are moving to another city, your employees may not be willing to relocate, and for more local moves, an increased commute can also put a strain on employees. You should consider the cost of living as it applies to your employees, and you may need to offer a pay raise or the option to work remotely in order to keep your most essential employees.

Quality of life for employees in a new location can have a significant impact on productivity, for better or worse. Take the time to look into nearby recreational opportunities, schools, crime rates, options for health care, and climate in the area. Moving to a safe place with plenty of fun things to do can increase the chance that you’ll retain current employees, attract new talent, and keep them happy in and outside of the workplace.

Financial Challenges

Before committing to the move, make sure you have enough money to safely carry your business through the transition, and be realistic about what is feasible. Even if the move is intended to save money in the long run, there are short-term costs that you’ll need to account for. These include hiring movers, transportation costs for yourself and employees, finishing and furnishing the space, buying new office equipment and technology, and hiring and training new employees. It’s also common to see a decrease in productivity for a while as your employees and customers adjust to the changes.

While some cities offer incentives for new businesses, some also have stricter laws for businesses as well as higher taxes. Thoroughly research all local regulations as you plan your budget.

Making the Move

Once you’ve decided where you’d like to go, there are all new things you’ll need to consider to make the move successful as well as common mistakes to avoid. If you haven’t done so already, create a comprehensive plan for the move and delegate different responsibilities to your employees. No detail is too small. This could include putting someone in charge of packing any leftover kitchen supplies as well as deciding who should update the address listed on your website.

By dividing the work, you can ensure that no one person has to shoulder too many burdens through the process, including yourself. Refer to this plan before the move, during the transition, and afterward in order to make sure you won’t have any unpleasant surprises later on.

Depending on the distance of the move, it might make more sense to quickly sell or donate some office equipment in order to avoid high shipping costs. If you choose to donate these items, you may be able to receive a tax deduction which can help offset moving costs.

Though you might ask for help from employees during the initial packing process, hiring a moving service is likely your best option for actually transporting equipment, furniture, and documents to the new location. You should plan to hire movers at least 1 to 3 months before the move in order to ensure they will be able to schedule your move well in advance.

Final Tips

Start early. It can take years to find the right place and ensure that you have the funds to sustain your business during the transition. If you feel like your business has the potential to expand to a new location, start looking now. It’s better to understand your options ahead of time rather than waiting until it’s too late and having to make a speedy, uninformed decision.

This may seem obvious, but it’s important to let your clients know well in advance that you’re moving. Consider receiving mail at both locations for a few weeks in order to make sure nothing is lost, and station an employee at the new location before the move so clients can begin engaging with the new number and address. This will also make sure essential services like phone and internet are working properly before you’ve fully moved in. It may be worth it to contract additional IT personnel to ensure this part of the transition goes smoothly.

It’s also possible that you don’t need to move at all in order to expand your business. In exploring all of your options, you could look into renting an adjoining space or find a separate location nearby while remaining active at your original site. Either of these options could prevent some of the disruption to productivity that typically takes place during a move and would allow customers who might be put off by a new location to remain loyal.

Even if you find the perfect space, it’s affordable, and everything goes well with the move, there is still a chance that it just won’t work out like you’d planned. Customers may not find the new location convenient, and even if you’ve chosen a location that is closer to your target market, you may risk losing your current customers. You might also find out too late that there isn’t as strong of a demand for your services as you predicted.

Despite these risks, relocation can be the key to expanding your business and creating a powerful brand with a solid customer base and loyal employees. By following these guidelines and creating a detailed plan, you can take the stress out of your move and have a successful transition to your new location.

About Daniel Matthews

Daniel Matthews is a freelance writer who specializes in finance, tech, business, and current events. You can find him on Twitter.
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