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Relocating your business can help you expand operations, attract and retain employees, and increase your revenue. But moving can also be expensive, especially if you don't properly prepare for the transition.
To set your business up for a successful move, check out these six commonly overlooked costs of relocating, and plan accordingly.
The costs of moving day can add up. You may have to pay for packing supplies, a removal service that'll pick up trash and large pieces of equipment you're not bringing with you, and moving insurance.
Arguably the biggest cost, however, is the team of movers you hire. Lisa Chu, CEO of Black N Bianco, a company that sells children's formal wear, had a challenging time with the movers she hired.
They fell behind schedule, which threatened to delay the entire move and setup process. "I had two options: fire them and spend more time looking for new movers, or hire additional help, Chu said. She chose to hire more help, a decision that doubled her original budget, but allowed her to complete the move on time.
When planning your move, carefully research moving companies in your area. But don't just rely on online reviews - call the most promising companies to ask about rates, hidden fees, insurance policies, timelines, and how they handle complaints.
To plan and execute a move, someone from your business needs to tour options for a new space, negotiate a lease, research moving companies, and organize moving day logistics. These tasks can all take away from time at work. The biggest loss of productivity, however, isn't the build-up to the move - it's what happens after the move when employees are getting settled.
Artem Volos, COO and co-founder of ClutchPrep, an education tech startup, moved his business from Chino to El Monte, CA. "When we just moved in, he said, "the office was still going through some construction, so the distraction that stemmed from that definitely affected everyone's productivity.
The business also lost valuable work time as employees adjusted to their new location and daily routines. "Even though some people lived in the area, Volos said, "others did not and had to commute - this completely changed the dynamic of our day. Because of traffic, Volos said some employees arrived at work later than usual, which shifted meeting times and work hours for the entire office.
Following a move, set realistic expectations with your employees about their workload and efforts. "Maybe let them work from home when the office is not fully set up, said Volos, and be sure to "do research on traffic patterns in your area.
Updating marketing materials with your new business location can be costly. You may have to reprint employee business cards, brochures, flyers, and more.
Plus, if you own a retail store, restaurant, or other business that relies on foot traffic, you'll need to spend money advertising your new location to current customers and new potential customers in the area. This may require you to revamp your website, run online ads, start an email campaign, or pay for signs and billboards around town.
Several months before the move, figure out your target clientele and brainstorm effective ways to reach them. Focusing your efforts can help you develop a more strategic marketing plan and avoid spending money on unnecessary marketing materials.
Unless you're moving to a recently updated, fully equipped building, you may need to remodel the space to fit your business' needs. Ed Brown, president and owner of Heli-Mart, a helicopter parts distributor, moved his business to a building that was larger than his previous space, but required a complete renovation.
Adhering to city and state codes for the necessary tenant improvements (TIs) cost more than Brown expected. "Aside from the aesthetic choices, he said, "factors such as ADA compliance and energy efficiency add up quickly.
Getting a realistic idea of renovation costs is key. "It's a smart idea to take a general contractor through the building before leasing or purchasing, Brown said, "and gather a rough estimate for TIs.
It's important to set up your business' phone system and internet as soon as possible after a move. Without access to company data and emails, it can be tricky to correspond with clients or work on certain projects.
Setting up your business' technology in a new space, however, can be pricey, especially if you're upgrading systems. Unless you have an IT team, you'll need to hire an outside expert to handle the set-up and onboarding processes, which could cut into your moving budget.
If you've been using the same outdated technology for years, look into switching to a cloud-based communications platform prior to the move. This can help reduce IT costs and eliminate the headache of installing landlines and individual desk phones.
At some point in the moving process, you may make a costly mistake. This was the case for Chris Hinds, COO and co-owner of Road Warrior Creative, a digital marketing agency. An accountant told Hinds to close his Colorado business before moving and reestablish it as a native entity in Texas, a decision that cost him several thousand dollars in unnecessary registration fees.
"This came with a rash of disadvantages and headaches including, but not limited to: Establishing new EIN numbers, new bank accounts, new lines of credit, [and] completely reworking our payroll and accounting systems, he said.
He later realized he could keep his Colorado LLC and register it as a foreign entity in Texas, but had to pay a series of penalty fees to do so. The fees, however, were small compared to the time lost. "Our time is very valuable and we ended up spending a lot more than we'd planned focusing on business relocation, he said, "instead of client work (which is what pays the bills, of course).
That's why Hinds said it's critical to get a second opinion on any major business decisions. "If I'd spent an extra $1,000 on a consultation with a business attorney, he said, "I'd have probably saved upwards of $8K to $10K in lost time and penalties. You may also want to consider contacting your local Small Business Development Center for free business consultation and advice, he said.
Depending on the time of year you're moving, as well as your business' size and new location, you may have to temporarily shut down operations to carry out the move. Company downtime, however, can negatively impact your revenue and cash flow.
If your business is closed for a day, for instance, you may lose money from current clients and customers, but if your business is down for several months, you also lose the opportunity to connect with and secure business from new potential customers or clients.
Chu said her business was down for almost a month following the move. "We almost lost a few clients because it was complete chaos in our warehouse and office, she said. That's why it's crucial to plan ahead. "You want your business to be back in operation as soon as possible, she said.
The best way to avoid unexpected moving costs is to do your research ahead of time. Create a spreadsheet that lists every known expense, said Volos, then pad your budget by 15 to 20 percent to account for unforeseen costs.
"Expect the slowdown in productivity for the first few weeks, he said, "and adjust goals accordingly.
If you need help financing your move, check out Funding Circle. Applying for a business loan is easy, and you can get a decision in as little as 24 hours.
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