Once you have decided your business needs a new location, choosing that location is not a decision to be made lightly. Your business location can affect many aspects of your business including your overhead, employee morale, customer acquisition—and for existing businesses, customer retention.
There are many factors to be considered before deciding where to locate a new business or deciding to move an existing one. You want to be sure you do your homework before committing to purchasing or leasing business property. Moving a business is often much more complicated than moving your family. Like finding a home for your family, finding a home for your business involves setting a budget, looking at “neighborhoods” and choosing priorities. Unlike finding a family home, you will also need to consider traffic patterns, nearby businesses, proximity to your customer base and your employees’ commutes.
To help you decide what to do, here are some of the things you need to consider before making your move.
What is the difference between buying and leasing and which one is best for my business?
Most smaller businesses lease their space, but depending on the market in your area, your financial position and your business plan, purchasing your business property might be the right choice for you. This is a decision that is probably best made in consultation with your attorney and your financial advisor, as well as a commercial real estate broker. Find out what the risks and benefits are before you start looking, so you can make a wise and informed decision that will benefit you and your business in the long term.
What kind of space do I need?
Where you are going to locate your business depends a lot on the type of business you are running. If you just need office space, your needs will be very different than if you are going to run a retail store or walk-in service business like a market or dry cleaner. Many cities also have zoning rules for different types of businesses. If you are running a manufacturing business, you may be restricted to a certain part of town. Be sure you know what the zoning laws are for your business before your start looking and get your heart set on a place.
What is my business plan?
Before even beginning to look, you need to have a plan for where your business is headed and how you plan to grow and manage your business for at least a few years. While you don’t want to pay for space you don’t need, you also don’t want to worry about outgrowing your space before you’ve finished unpacking. This is probably more of an issue for younger businesses than it is for well-established companies. To get the right space, you need to have a pretty good idea of your business needs.
How well will my business fit in this space?
This one goes right along with the previous questions. This question is about both your current needs and your future ones. Does your business include large pieces of equipment or machinery? How easily will you be able to move it into your space and how well will it fit? Does your growth plan call for more equipment or more employees? Is the space laid out in a way that works with the way you do business? Does your business need a large, visible sign on the building? Can you put a sign there? Do you need to pay for a sign and installation or is it part of your property agreement? If you are planning on growth, is it possible to have the option of obtaining additional space in the same building or will you have to relocate? In addition, does the look and feel of the space fit with your business image?
Can I terminate my lease if I need to?
Most short-term business leases run three to five years and long-term leases can run 10 years. Will the space work for you that long—if you are thinking that three to five years is too long, you may need to rethink your business plan. Moving again in less than three years can be hard on your business, especially if you are dependent on customers coming to your location. Moving too frequently may plant concerns about stability in your customers’ minds. If you experience an unexpected change in your business during the lease term is there an option to end the lease or to sublease your space to another business?
If you are leasing, how responsive is the property manager?
How quickly does the property manager respond to questions and even more importantly, to emergencies? Are they local and do they have the authority to make decisions and solve problems or is there a corporate office in a distant city that will make you wait on a response? You want to know that problems that may impact your ability to run your business will be addressed as quickly as possible.
What other businesses are nearby?
Before committing to your business location, take a look at the businesses who will be your neighbors. Are their businesses complimentary to yours or will they draw business away from you? Will you be attracting a similar type of client or will their clients make your clients reluctant to visit your place of business?
Are there amenities?
Adequate parking for both employees and visitors is critical to business success. Depending on the market in your area and the type of space you are looking for, a landlord might help with the remodeling of the space for your business If you are moving into a larger office building or campus-type environment, are there any extras or niceties (like a gym or workout room) that you might be able to offer to your employees as perks?
And finally, what impact will a business move have on my employees?
How do your employees feel about this move? Yes, you are the owner and have the final word, but not taking your employees’ needs and feelings into consideration could be a move to disaster. Will this move lengthen or shorten their commute time? Is there public transportation nearby for employees who don’t want to drive to work? Are there local services nearby that might appeal to your employees? Considering their needs and morale can make your move much easier—and can help with team building.
Finding the right home for your business may seem overwhelming, but with planning and forethought, it can help your business become even more successful.