When to Raise the Bar
I’ve been working from my home in a small business for some time. When is the right time to move the business out of my home? I know I will incur additional overhead expenses, but I will also get more exposure which could build the business quicker. A lot depends on the type of business you own. If your business doesn’t require a lot of equipment, yet moving would increase customer traffic substantially, you might want to take the leap. Even so, be sure you have enough income to cover overhead expenses for your first year while the additional exposure increases income. If your business requires major equipment (purchased or leased) and moving would also require additional staff, I recommend that you have capitol set aside to cover the increase in overhead for that first year as well. Relocating any business – even a well orchestrated move – will send shock waves through every area of your operation - particularly in sales. It takes a while for existing customers to adapt to a new location. Many never will. Loyalty and personal convenience are not always friendly bedfellows. When you move your business the following changes occur immediately: • Additional rent and utility expenses • Additional furniture/equipment • New signs/business cards/stationary • New telephone service and (unfortunately) a new business number • Time needed traveling to and from the new location for you • Customers who will not follow you This is a short list of issues you must address. Assume the worst case scenario when it comes to cash flow and plan accordingly. A few suggestions for acquiring additional monies are: 1. Borrow from family 2. Save until you have the one year overhead banked 3. Get a small business loan 4. Find investors who will back your business None of the above is to discourage you – only to inject precaution so you make wise decisions. Often businesses are not realistic in their projections and are forced to close the doors due to poor planning within the first 6 months to a year of relocating. Think it all the way through – get wise advice – don’t move too quickly. When you do move, don’t assume things will run smoothly. Prepare, prepare, prepare!