Planning ahead can make relocating
your company a headache-free experience
By Dana Dratch • Bankrate.com

Relocating a small business takes plenty of patience, time and money -- not necessarily in that order. Moving offers chances to grow, shed cobbled-together equipment and reinvigorate your staff, but it can also lead to unexpected headaches.

When David Gould moved Gould Plastics Inc. just a few miles down the road to Duluth, Ga., he thought his phones would be out for one day. A phone company error stretched the blackout to 3¹/₂ days.

"It was really annoying," says Gould, whose $6-million-a-year business receives many orders by fax.

Though he and his 30 employees did most of the work themselves, the final tab for relocation topped $30,000 -- and that didn't include equipment upgrades or improvements to his new building.

Gould's advice to business owners: "Allow for more time and more money than you think it will take."

Do the math
Any businessperson considering a move should think about overhead, says Francis R. Carroll, who runs the Small Business Service Bureau Inc., a private small-business organization and consulting firm in Worcester, Mass. "Is your basic monthly cost going to increase? If so, how will that affect your bottom line?"

Sometimes increased efficiency allows businesses to slice staff. Other times, relocation offers better access to skilled workers.

Carroll worked with a call center in Houston that doubled its labor pool after relocating to a site that was on a bus line. That same company underestimated the cost of renovating its new location. The end result? Better access to workers, but a moving bill twice what the owners had anticipated.

Other factors to consider include parking, visibility and the location of your customers and vendors. If a new low-rent retail location also means less visibility, business owners may end up pouring the money they "saved" into marketing. Net gain: zip.

To move or not to move
For Shimon Harosh, president of Twin City Bagel Inc., keeping the same St. Paul location he's had for the last five years is not an option. His lease is up in January, he has a lot of wasted space in his 37,000-square-foot facility and he doesn't like his landlord.

When the city of South St. Paul offered Harosh financial incentives to help him buy a building for what he now pays to rent, that was the cream cheese on the bagel.

"I figure I can make the move, solve the lease problems and get more efficient," says Harosh, who predicts his company will increase production 30 percent in the next year.

Planning is key
Moving a business is like staging a wedding or a war: the success is in the planning.

"You have to have backups -- and backups of your backups," says Robert Andoh, area director of the University of Georgia's Business Outreach Services/Small Business Development Center.

"Plan ahead of time, have contingency plans for every step of the way: 'If this fails, where do I go?'"

The Plastics Group, a $2-million-a-year engineering and manufacturing firm, did exactly that when it relocated in July of 1998. Although the company was only moving two blocks, managers started preparing more than six months ahead of time.

Buzz Brockway, operations manager with the Lawrenceville, Ga., firm that employs 35 people, says a series of meetings helped managers think through the company's move. "We laid out the planning of what would have to be done and who would be responsible for it," he says.

Let customers and vendors know when the company will be shut down to move -- and supply them ahead of time, if possible. If the business is a retail store, stage sales before and after the move -- to reward loyal customers and entice new ones.

A move can reinvigorate
For many businesses, a move is more than a change of address -- it's a chance to shatter the status quo.

When Wendy Tapp moved her $2.5 million business in June of 1998, she used the 50-mile move from the south side of Atlanta to suburban Suwanee, Ga., to update the company's evolving image. Because Label Technologies Inc. was doing 70 percent of its business in specialty dye cutting, "we didn't want to be known as a label company anymore," she says. After the move, the company became LTI Atlanta. "We changed our name, our letterhead, our image."

For The Plastics Group, the move was a chance to maximize manufacturing space. The company consulted engineers at the Georgia Institute of Technology and centralized the production of one high-priority job -- something that was impossible in the old location. End result: production on the project is up 50 percent, and the company's earning an extra $10,000 per week.

Not every move brings high production and profit.

In the late 1980s, Tapp moved her company from Minneapolis to Atlanta to better serve a textile client that comprised 40 percent of her business. Within a year, the client took its business in-house -- and hired away several of her key employees. "It was devastating," she says.

Size matters
Most of all -- before the move -- make sure the new space will accommodate growth.

The Plastics Group spent more than $30,000 renovating a building that was substantially larger than it needed. But the company, which now uses 75 percent of its floor space, has plenty of room to expand -- and one less incentive to relocate.

Says Brockway: "I don't want to do that again for a long time."

Dana Dratch is a freelance writer based in Georgia

-- Posted: Nov. 18, 1999