|Planning ahead can make relocating
your company a headache-free experience
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
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:
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, 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. 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,"
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.
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, 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.
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,"
Most of all -- before the move -- make sure the new space will accommodate
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: June 6, 2003