The thought of relocating your startup to greener pastures is tempting for new entrepreneurs. You could potentially be exposing yourselves to an untapped market where growth is limitless and where labor is easy to find. However, it’s not a task well-suited for everyone. You need to consider the processes of packing, transport, and other logistics. Being a startup makes the pressure of relocating worse, as you tend to work with limited resources in terms of money and manpower.
While this shouldn’t serve as your only guide, this article will provide you with some quick insights on what to consider when you relocate your startup.
1. The Costs Involved
This is one of the first things to consider before your move. However, it is more complex than you may think. In addition to the obvious costs such as hiring movers, you must consider the secondary and hidden costs.
The further you move, the more expensive it will be. Obvious. But you have to factor in gas and toll prices too when you drive and scout new areas to setup shop. A weekend trip will cost you a hotel stay, meals, and parking.
Consider the hidden expenses of your move as well. They vary depending on the moving service you choose. Here are a few hidden expenses of moving:
- Landlord’s alterations approval
- Loss of productivity
- Contents insurance
There are a few ways to cut costs during your move. They include:
- Choose your moving date and time strategically
- Get quotes from several movers
- Don’t hesitate to ask for discounts
- Examine your contract and look out for hidden expenses.
Your tax situation will change if you move. Things are different across cities, counties, states, or countries. Take time to assess the tax situation in your new business location.
Depending on your new location, your taxes could impact the profitability of your startup. Some businesses may get tax credits for setting up offices in different locations. Consider these factors before relocating your business. As of late, businesses have been flocking to Texas due to its tax-friendly environment and relatively low costs of living.
3. Employee Impact
How will the move impact your employees?
Let your employees know about the move ahead of time. That way, you can understand their anxiety and address potential concerns. Employees that are expected to relocate, will expect to be fairly compensated for their struggles. If they have families, you may need to factor in time off and productivity loss as they will need time to scout for a new place to call home, find new schools, and slowly adapt to new surroundings. Then again, there is no guarantee that your employees will be happy in the new area despite a generous relocation package. It’s up to you to communicate well with your employees and factor in the morale of your team.
4. Growth Potential
Consider your company’s potential for growth in your new location. Analyze your long-term goals and determine if the location facilitates growth. Consider the availability of labor and skill sets in your new location. Can you get a workforce to help with your operations? Does the new area have a supply of highly-skilled labor? Or are they in such demand that you will need to pay a premium for their work? Consider the location issues and how they may impact the growth of your business.
What is a business without its customers? They are the foundation of your startup and its financial health. Consider them when relocating. How will your move affect the cost of your products and services? If you are moving close to the customers, there may be a decrease in costs. If the move causes an increase in overhead costs, customers may need to pay more.
If your business heavily relies on a specific type of client, understand the risks of moving. Losing that customer could destroy your business.
In conclusion, relocating your startup can majorly impact its operations. You can’t afford to take it lightly. However, the process can be complicated and frustrating. Amidst the stress of things, you might forget a few essential things. Consider the above factors to make sure you’re making the best decision.