Relocating Your Business? Watch Out for These Fees

Author: Robin for Stratton Date: July 15, 2013

Relocating BusinessMoving your business is a costly endeavor, but a few smart solutions can help minimize expenses.

On the road again? Many small businesses likely will be this year, according to Citibank’s recent Small Business Pulse survey. Researchers found that 6% of small businesses are planning to change locations in order to achieve business goals. Some seek international opportunity, while others are reaching for new domestic prospects. Some just need more space.

Whatever the reason for the move, one thing is for sure: It will cost you. Moving is an expensive proposition, and the costs go beyond the obvious boxes, movers, travel. Here are a few of the lesser-known moving expenses, as well as some advice on how to keep costs down.

Manage the Paperwork

"A physical move typically costs about $1.50 per square foot. If you have 3,000 square feet, figure on a minimum of $4,500 to pay the movers," says Jerry S. Neitlich of IN/House Corporate Real Estate.

Why let paperwork make it any more expensive? All your letterhead, envelopes, business cards, brochures: They are likely to become obsolete when you take on a new address. But it is possible to contain the costs.

"Two strategies are to either let your present supply diminish, so the reprinting costs are not 'new' costs...or simply print stickers that can be placed over the old address—not as cool, but it sure saves some money," he says.

RELATED: 5 Reasons to Relocate Your Business

Plan for Telecom

As the owner of Envision Marketing & Design Inc., Jeffrey Shaw has moved his four-person team twice in 11 years, most recently three years ago. To his surprise, the new space was only minimally wired.

"You come into an office and now you have to wire the phones, the computers, all of that is an extra. It’s something we kind of forgot about until we got into the space," he says. "I kind of figured it was in there, and they did have the basic electric, but the data communications was a separate deal."

That’s $1,000 he hadn't included in the budget. In retrospect, it would have helped to clarify the point in advance.

RELATED: How to Audit Your Business’ Phone Bills

Do It Yourself

For his most recent move, Shaw priced a number of full-service deals from big-name movers. They’d bring in the boxes, do all the leg work, haul it and put it in place. Needless to say, it’s a pricey proposition.

"So I went to Craig’s List and looked for smaller outfits. Then we did the boxing ourselves, and these guys basically just did the move," he says.

There would seem to be a trust factor involved. Can the guy-with-a-van really follow through the way a national brand likely would? Shaw figured proximity would carry the day. "It’s not like we were moving across country. We were there on site the whole time, from the packing to the unpacking. We didn't have any fragile equipment or fine art," he says.

Take It Slow

When chiropractor Robert Failla decided he needed to move from a home office into a professional space, he took his time about it. As president of ChiroCover, which provides temporary chiropractors for local practices, he took several months to investigate every local option he could find.

"There are a lot of different office facilities out there to choose from. We wanted a location close to our home that provided a community conference room and seminar space, that had its own parking lot," he says. After surveying many potential sites, he found the perfect space, an upscale location at a reasonable price. It was worth taking the time, he says.

"You have to do your homework, take your time. Sometimes a move has to be done in a rush, but if you can, you need to be slow and thorough."

RELATED: 4 Pitfalls to Avoid During a Business Move

Pursue a Tax Break

As a sole proprietor or partner, you can deduct some or all of your personal moving expenses if you meet two IRS tests. You have to move at least 50 miles from the old site, and you have to work at least 39 weeks in the new location during the 12-month period after you make the move. As the owner, you can write off all moving expenses; employees can write off fewer, more specific costs.

As always, check with your accountant or the IRS before deducting moving-related expenses, or anything else, for that matter.

READ NEXT: How to Retain Customers When Relocating Your Business

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