We’ve talked before about expanding your business into places outside of the GTA, and easing your way into those markets so that you have plenty of networking opportunities. But what if you’re relocating your business entirely? Regardless of the reason for the move, there are some important steps you need to take to ensure a smooth transition that doesn’t leave you short on clients and cash and long on stress!
Why relocate your business?
One of the most frequent reasons that people relocate their business—particularly businesses in the micro to small business range—is because of family. Whether a spouse is moving to a new city to accept the job offer of a lifetime or parents need help in their golden years, moving a family to a new city is always a big decision. Moving a family AND a business is even bigger one.
Another good reason is to tap a market that isn’t available at their current location. While the emergence of eCommerce makes this less of an issue for many businesses, some product or service operations really lend themselves to ‘in real life’ interactions rather than digital ones. For that reason, relocating the business to reach those new customers is an option.
Many business owners don’t have family commitment reasons for considering a move and are simply looking for a change in lifestyle. People go to cottages and resorts every summer and wonder to themselves: “How can I live like this all year round?” It’s possible, depending on what your business is and where your customers are!
Still others outgrow their current location but want to factor in lifestyle or lower costs of living and running a business into a move. All of these are perfectly valid reasons to relocate a business, but all require serious consideration before you take action.
In this post, we’re going to get down to brass tacks on the details of what it takes to relocate your business completely, from one place to another.
Step 1 – Research
Assuming the decision to move has been made, it’s time to plan. If you’re moving to a new area because of reasons that are outside of your control, you still need to do research to see if there is value in relocating your business as is, or if it might be prudent to adjust your business model to suit the area. If you’re moving for lifestyle, this is the time to really research different locations for your move. Some considerations might be:
- Proximity to larger markets;
- Availability of local market for your product / service;
- Proximity to national and international shipping options;
- Cost of living – housing, taxes, utilities;
- Expenses related to the business – rent / purchasing of location, for example;
- Availability and quality of personnel in your new geographical area (a particular issue for businesses that require employees with certain technical skills);
Depending on the nature of your business, some or all of these considerations could be deal breakers in terms of selecting a new location. One thing that is true almost everywhere outside of the GTA is that the cost of living and the expenses related to the business are sure to be less than they are in Toronto.
Step 2 – Create a timeline and a budget
Knowing how and when your move will all take place is important for the continuity of your customers, if you’re bringing them along with you. A freelance writer, for example, would be able to move anywhere and take her clients with her. A hair stylist? Possibly not. But knowing the timeline will help you to be able to not only wind down your business at your current location in a way that doesn’t feel rushed, it will allow you to wind up some interest in your business at your new location.
Another consideration is not planning your move during your busiest time of the year! It can’t always be helped, but if you can avoid that, you’ll be better off! Also, if some of your staff are moving with you, there has to be room in the timeline to ensure that they can manage it too, both personally and professionally. Depending on how far the move is from your current location, this could be a big upheaval for them too!
The timeline that you create will be a living document in that there can always be hiccups.
Perhaps your first choice of retail rental is no longer available and you have to wait an extra month to get access to another one. Or maybe you are finding it is taking longer than you thought for your financing to come through, in order to renovate a building that you are buying for your business. You can almost, in every plan, count on hiccups. If you have a FIRM “must be open by” date, then you had best pad your timeline to include leeway for things going a little off the rails.
You also need a budget for your move, distinct from any costs of moving to a new home in the same area. The cost of moving a commercial enterprise versus a private home can be quite a bit more, in terms of movers, setting up of equipment and services (telephone, internet) and cancelling existing ones (which can come with a termination fee), rent / purchase costs including real estate fees, creation of all new marketing materials and advertising options and more. Your budget needs to be realistic and, like your timeline, should include some “cushion” for unexpected expenses.
You might want to also factor in some of the hidden costs involved in relocating a business, to see if you can project some and account for others:
- Loss of production with its resulting loss of revenue and dent to cash flow;
- Cost for staffing at the new location: it costs money to hire, so consider that.
There are grants / funding options available for relocating businesses, so look into those with the economic development committee of the area you are moving to. There might even be tax incentives and other perks, depending on the size of your business!
Step 3 – Find a location
This can be a tough step, particularly if you are looking at a location that is some distance from your current space. You need to be able to vet your options and then take the time to go and see them in person. A FaceTime walkthrough with a real estate agent is great but not necessarily sufficient, depending on what your needs.
Remember what they say about real estate: it’s all about location. If yours is a retail business, you really need to be where there is the right amount and quality of foot traffic to run effectively. If you’re business is all about exporting goods, your links to high speed shipping need to be solid. Check in with the local economic development group to see what insight they can provide on these issues. Other considerations?
- Accessibility issues for clientele;
- Delivery zones for suppliers;
- Services nearby that you will require;
Also, consider the value of leasing versus purchasing!
There are cost considerations to both but ultimately, if you’re not sure about your growth potential, or how this market will work out for you, you might want to consider leasing. This gives you more flexibility over the shorter term. Whichever option you choose, team up with a local real estate professional who specializes in commercial properties, to ensure that you’re negotiating the best possible terms.
Whether you’re looking for office space, retail, or industrial space, once you’ve signed a lease or had a purchase offer accepted, it’s time to get a handle on the space BEFORE you arrive, in case it requires any work to be done before you get there. Even a new coat of paint is better done before you start moving in furniture, equipment or stock.
If you’re planning to renovate the space, you need to get in touch with the local municipal office to check on guidelines and rules / restrictions, licencing / permission requirements and so on. The Township of Innisfil has a one stop shop system for this kind of work, and will even provide a FREE pre-consultation with their team of subject matter experts from Building, Planning, Engineering, Fire and Operations to provide valuable feedback on your construction project plans. If you’re planning to lease, they can help you with site selection, given the nature of your business, and advise you on what areas would best suit your needs.
If possible, get a floor layout of the space so that you can start planning where everything will go, making move in day a breeze. Don’t forget to add any of these items to the budget, so that you’re not surprised when the bills arrive!
Step 4 – Revisit your timeline and start adding concrete tasks
Now that you have a space, your timeline might need to shift, to allow for work to be done, or simply the date that you can first access the space. Revisit your timeline and make sure that it works for you still.
With a moving date now in sight, you can now start adding tasks that will need to be carried out:
- Book movers;
- Pack up non-essential materials from the current location;
- If you produce a product, you might want to spend some time increasing your current inventory to allow for time gaps when you will not be in production, during the move;
- Book service providers for installations, repairs, cosmetic work and services, like telephone and internet;
- Cancel existing service providers / utilities that cannot be ported to the new location;
- Hire a contractor for larger renovations / repairs / expansion plans;
- Purchase necessary stock, equipment and so on;
- Check in with your business insurance provider to make sure that your current location, your stock and your new location are all covered, as well as the period during which you are physically moving;
- Consider any storage needs for stock or equipment if you need to move out of your current space before your new space is ready or available;
- Advise current customers of the closure of the current space and how they can reach you starting on which date;
- Redirect mail from your current location;
- Refine all your digital listings: if you’re online, you’ve got a presence and likely business listings. Make sure you change them all!
Step 5 – Moving day!
If you are having movers either move from your current space or from a storage unit to your new space, you need someone on site at the new space well before the movers arrive to:
- Make sure it is all in good shape and order: no leftover garbage from the previous tenant / owner, for example.
- Turn on A/C in summer, heat in winter and make sure those services are all connected;
- Set up the internet and phones, to ensure seamless service for those customers who access your business online.
In a perfect world, you wouldn’t have to move in and flip the ‘open’ sign on the door on the same day. If you can plan for that, to give yourself some cushion and time to recover, do it!
Mistakes people make when relocating their businesses
Here are the top 5 mistakes that people make when relocating their business:
#1 – Waiting until the zero hour!
Yes, a move means a slowdown in production or an inability to serve clients in the way you would normally. This notion frightens business owners and so they wait until the last possible second to shut down operations and expect to be able to stick it all in a box and make a dash for the new location. Wrong. Instead, communicate long and often with your clients that will be coming with you. It’s important that they never be able to say ‘Oh, we didn’t know you were going to be shut down for a few days to move! We really need this order!’
#2 – Bad timing!
Moving in the middle of a January blizzard isn’t optimal. Neither is moving during peak sales periods for your product based business. Think clearly, taking into account historical patterns of your business, to see where the optimal timing is. You may not have that entirely within your control, in that your ideal space may become available on February 1, but it’s best to try as this will minimize the number of difficulties you have during your move.
#3 – Moving everything!
Odds are, wherever you are located now, you’ve accumulated ‘stuff’. In the same way that we tend to keep things we don’t use in our homes, and end up moving them and the kitchen sink to a new home, many of us do the same thing with our businesses. This is why a floor plan, if you can get one, of your new space is so helpful. You can really get a sense of what you can take and what you should sell off or donate because it simply won’t work. The cost of moving furniture or equipment that you aren’t going to use, or are going to end up paying to store, isn’t worth it. In planning your move, plan for clearing out some of the old to make space for the new. It’s a great time for a stock clearance sale!
#4 – Ignoring insurance!
Even if you’re moving to a home office, from a previously leased space, you need to consider your insurance needs. Many insurance companies offer home office policies to cover your equipment and provide alternative space, should a disaster befall your home.
For larger offices, leased spaces, or industrial buildings, adequate insurance is needed through the move and onwards, for building and contents. If some of your equipment was damaged or lost during the move, you need to know that you can replace it. Sit down with a commercial broker to make sure you’re covered!
#5 – Doing it all yourself!
Regardless of the size of your business, or whether you’re moving a home as well as your office, you need to get some help if you want to get it all done relatively problem free. Get professional movers, instead of your extended family. Use the services of a professional real estate agent, rather than a DIY firm. Talk to a lawyer and an accountant to make sure you’ve got all your bases covered and don’t forget that previously mentioned insurance broker.
Get advice at your destination about any zoning requirements or licencing you might need. Ultimately, you don’t want to make a move only to find out that you’ve made a bad one, or one that doesn’t really work for your business. Most locations are happy to see new businesses arrive in their area and are open to helping you however they can, so leverage that option! And don’t forget to breathe! It will be over before you know it!