If done correctly, relocating or expanding your business to a new place can increase your revenues and profitability. However, it also requires some adjustment. Here are things to consider when relocating or expanding your company.
1. Site Selection
When selecting your new company location, consider why you are moving or expanding. For example, is one of your goals to move closer to potential or current customers? Or, are you seeking to locate operations in a lower-cost city? Your goals will guide you toward an initial list of potential cities.
Before you make a final choice, ask other business owners what they think of the location. Also, check if local organizations or governments provide relocation assistance, such as tax incentives, training grants, and site development help.
2. Market Research
Research the demographics, competitive landscape, and needs in the prospective location to ensure your product or service has a niche there. Also, understand consumer habits in the region before making a move. Your lender will want to ensure you’ve completed this research step if you need financing.
3. Financing
Often, a business expansion requires financing either through a loan or the equity of the current or additional owners. Before the move, consider which of these options will work best for you and take steps to put your financing in place.
4. Ecosystem Support
If you are trying to break into a new market, you’ll want as much support as possible. Consider who in your network knows people within the new ecosystem and ask them to help you create relationships in the new location.
5. Cost
Cost is a critical factor in every business decision, including locations. Cost affects you in several ways. The first is the rent, taxes, and utilities you’ll pay for the new space. The second is the cost of living for employees. If you’re moving from an inexpensive region of the country to a more expensive one, you’ll need to pay much higher wages to convince employees to work for you in the new location.
If you want to expand to an area with a small budget, consider the minimum viable expansion option to achieve your goals. For example, you may not necessarily need to open a large office at first. Perhaps you can start with a smaller space and one or two employees to test the market before committing to a more extensive operation.
6. Culture and Customs
Cities have different cultures. Some regions, for example, are more casual about appropriate dress or time schedules, while others are more formal. Employees also differ in their expectations of employers based on region.
7. Leadership Options
If you are relocating, you’ll want to identify key leadership candidates among your current staff and offer the necessary relocation packages to encourage them to relocate.
If you are expanding into a new location, you’ll also likely want an employee to relocate to head the new venture, at least initially. A current employee understands your company values and can better represent the brand than a new one. Once settled, you can hire a new head from among the local staff.
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Contact us for help with your office relocation. In addition, we can help you with the planning and execution of this significant undertaking.