The monthly rental a business pays to operate from its premises should positively add to the business’s productivity and bottom-line profits. “In the life of every business there comes a time when the option to relocate arises. A move can be a logistical challenge, yet it can also be the best thing that could happen to your business if done with careful thought,” says Leon Breytenbach, National Manager of the Rawson Property Group’s commercial division. There are many motivations for relocation, and several aspects to consider before you move.
Workforce
Relocation may be the right decision if your business can improve its location while attracting and retaining the right workforce. Every business requires suitable access to the majority workforce, whether they are basic labourers, skilled artisans, qualified technicians or clerical staff. Excessive staff turnover is counterproductive for any operation. Retaining employees for longer periods of service avoids disruption and allows the business to deliver higher levels of consistency, thereby sustaining the business’s ability to generate income and pay its rent without having to continually train new workers.
Consider the basic needs of your workforce before you relocate. A contented workforce means you don’t need costly staff retention incentive schemes. Some factors to keep in mind include: proximity to affordable and efficient transport systems to and from the workplace; safety and security at work, and when arriving at or leaving the premises; and proximity to retail outlets, medical facilities or educational institutions accessed by the workforce en route to or from work, or during lunch breaks.
Operations
Relocation is in your best interests if you improve your location as well as the normal course of business. Most businesses start small and then expand over several years. “Limitations of space and layout may, in time, negatively impact the business’s ability to maintain its income-generating abilities or to grow, making a move worth considering,” Breytenbach advises.
Factors such as delivery truck access, on-site security, access to Wi-Fi, fibre-optics, cell phone reception and storage facilities are all important. Parking for employees and consumers, and traffic congestion, which delays the workforce or discourages consumers, will impact on the business. Owners will be inclined to look for premises that tick all the boxes for their business.
Clients
“Businesses often have to choose between establishing themselves close to their target markets at a slightly higher cost, or selecting a facility which costs a little less but is slightly further away,” Breytenbach notes. This decision will depend on the nature of your business. A business that relies on walk-in clientele, or needs to be located in a major shopping centre, or requires high visibility from a main road, will struggle to escape the higher rentals which often come with these requirements. In contrast, businesses that are predominantly online or service-oriented would benefit from reduced rental costs by avoiding prime locations and selecting less costly spaces.
If the move comes at a reasonable cost, with a strong likelihood that the new location will attract new clients without losing too many existing clients, providing the relocation will assist in growing the business, then moving may be the right decision.
Cost to the business
When businesses are unable to meet their monthly rental costs, they are often inclined to delay the decision to move until it is too late. Their reasoning seems to be that relocation costs are an unnecessary expense when the business is already under pressure. “Drastic steps are required if the business’s future is to be secured. The initial relocation outlay should be seen as an investment into the sustainable future of the business, and not as an unnecessary expense,” says Breytenbach.
Where a lease agreement has expired, or where a landlord is willing to release a tenant from an existing lease agreement, relocation can be justified if its cost will contribute positively to the productivity or bottom line of the business. If the new site has a similar or lower rental, without compromising too much on the location or layout of the business, the decision to move becomes easier, even if there is an interim additional cost to the business.
There are risks
Relocating may be good for your business, but a move does not guarantee future success. The process can be expensive and disruptive, so think through all aspects of the move beforehand. “Mistakes may occur, but these can be avoided or forestalled if you are aware of them,” Breytenbach advises.
The following tips could make your next relocation less stressful. Take your time, rather than rushing to make your decision. Consider all the relevant factors and avoid the temptation to focus solely on cost. Allow for future growth. Pay attention to elements that influence your employees’ quality of life. Find out if there are environmental or regulatory issues pertaining to the new premises.
In conclusion
When preparing for your relocation, keep in mind your business’s specific needs and time constraints, and remember that productivity will be interrupted in the short term. Allocate a realistic budget to prevent complications that can arise from cutting corners. “Plan all aspects of the move carefully and it should go smoothly with few, if any, problems,” says Breytenbach.
Alan Straton
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