Friday, November 16

Pros and cons of moving

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Many factors must be carefully considered before a business makes the decision to move premises

In the life of every business there comes a time when the option to move comes up, and although a move can be a logistical challenge, it can also help increase profits and productivity if done with careful thought.

There are different motivations for relocation, says Leon Breytenbach, national manager of Rawson Property Group’s commercial division, and important aspects must be considered.

These include:

  • Your workforce;
  • Operational requirements;
  • Clients;
  • Cost of the move;
  • Risks.

Breytenbach says relocation may be the right decision if a business can improve its location while attracting and retaining the right workforce.

“Excessive staff turnover is counter-productive.

“Retaining employees for long periods of service allows the business to deliver higher levels of consistency, thereby sustaining its ability to generate income without having to continually train new workers.”

This means the basic needs of a workforce must be considered before moving.

When considering the workforce, 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;
  • Proximity to food and retail outlets, medical facilities and educational institutions.

Most businesses start small and expand over the years, meaning limitations in space and layout may negatively affect its abilities to earn income or to grow, making a move worth considering, Breytenbach says.

Factors such as delivery truck access, on-site security, access to wi-fi, fibre-optics, cellphone reception and storage facilities are important.

Parking for employees and customers, and traffic congestion, will affect the business.

Current clients must be taken into account, and future clients too.

“Businesses often have to choose between establishing themselves close to their target markets at a slightly higher cost, or selecting a facility which costs less but is further away. This decision will depend on the nature of the business.

“A business that relies on walk-in clientele needs to be located in a major shopping centre, or requires high visibility from a main road. But it may struggle to pay the higher rents that often come with these requirements. Businesses that are predominantly online or service-oriented would benefit from reduced rents by avoiding prime locations.”

If the move comes at a reasonable price with a strong likelihood that the new location will attract new clients without losing existing ones, and providing the relocation will help grow the business, then moving may be the right decision.

Breytenbach says the relocation costs should be seen as an investment into the sustainable future of the business.

“When businesses are not able to meet their monthly rents, 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.”

He says when a lease has expired, or when a landlord is willing to release a tenant from an existing lease, 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 rent, without compromising too much on the location or layout of the business, the decision to move becomes easier.”

Even though relocating may be good for a business, it does not guarantee future success, Breytenbach cautions.

All aspects must be carefully considered as common mistakes can be avoided or anticipated.

Business owners should not rush the decision and avoid the temptation to focus solely on cost. They should allow for future growth, pay attention to elements that influence their employees’ quality of life, and also find out if there are environmental or regulatory issues pertaining to the new premises.

“When preparing for your relocation, keep in mind 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.”

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