05/ 06/ 2008
by Maggie Flynn
It happens all the time. A new shopping district opens and takes customers away from your location. A competitor closes shop, leaving open a storefront you've always admired. Your spouse gets transferred out of state and you must make the decision whether or not your business can make the move with you.
Whether you're contemplating relocating your business to a new neighborhood or an entirely different state, this is not a decision that can be made easily. Could closing your doors or setting up shop in a different neighborhood or city help your business thrive? Here are some questions to ask to help you start figuring out if a move is right for you.
Have you run out of space at your current location?
One of the most common reasons for a small business to relocate is outgrowing the space needed to effectively run a business. While this means that business is good, finding your new location still may not be an easy task. You'll still want to take time with the process and not rush into signing a new lease, so if you feel that moving shop is going to be inevitable, it's better to start the process sooner rather than later.
How is the health of the adjoining businesses?
Another reason small business owners relocate has to do with downturns in their present location. If, for example, your business started 30 years ago in a thriving downtown, you may now be one of the last holdouts among many empty spaces with "For Lease" signs in the window. While this won't deter your loyal customers, a declining area won't bring in any new business, either. It might be a good idea to start checking out real estate in more thriving areas.
How would a move affect your customer base?
You want to make it as easy as possible for your ideal customer to find you, so moving closer to them might make sense. However, you also want to consider how a move would affect your existing customer base. Let's say that your business is currently in a historical district in close proximity to a bus stop and you get a lot of foot traffic. If you move to a more suburban area, you risk losing a good number of existing customers who may not have the means or desire to drive out to your new location. If they do make the trip, will they find a place to park? If the effort they make isn't rewarding, they likely won't be back.
While it's important to think in terms of the customer base that could help your business grow and thrive, try to also comprise when choosing a new location so that the customers you currently rely upon will still come through the door.
What is your employee situation?
If you're considering relocating to a new state, you won't likely be hanging on to many of your employees. In fact, even if you live in a bigger city and are considering moving to another neighborhood, some of your employees may not choose to make the commute across town. So beside the strain of relocating, you may also be looking at the hassle of finding and training new employees.
Of course, there is an upside to this. A move could ultimately mean better employees. If, for example, you're running a technology firm in a small town and decide to relocate to the Silicon Valley, you'll encounter a highly-qualified employee base that wouldn't have been available to you in your old location.
What's the competition like?
Before making a move, thoroughly research your competitors. Perhaps you're thinking of moving your printing shop closer to a university, where you'll be closer to a target customer base. But if there are already three print shops competing with each other in the area, you're probably better off staying where you are, unless you can offer something they can't.
The exception to this is moving to districts that are known for certain things. If you live in a bigger city, there are streets or blocks known for housing certain types of businesses. Los Angeles, for example, has a fashion district, a furniture district, a jewelry district and so on; while most of the businesses look somewhat identical, they all manage to thrive due to the volume of customers.
If you're serious about moving your business, you may want to consult with a relocation firm to help you make the best decision. Also talk with your accountant to make sure you're aware of all the costs and that your business is financially sound enough to take on the burden. While moving is an intimidating prospect, it may be the necessary step to keep your business growing.
