Moving your headquarters is never a decision to be taken lightly. Long distance moves can be costly, disrupt your business operations and impact your ability to expand. So, why then do entrepreneurs choose to relocate their businesses?
Because a change in location can also lead to opportunity that doesn’t currently exist for the business. The potential revenue growth outweighs the nominal cost of hiring long distance movers and the risk of uprooting the operation. Coming to this conclusion takes careful consideration and usually includes one or more of the following scenarios:
There’s a Better Pool of Employees in the Future Location
A business is only as strong as its weakest employee. Finding highly qualified employees is a constant challenge for businesses, particularly those that rely on employees with special skill sets or expertise. One example of this is the relatively new green energy industry, which needs employees that are properly trained. When the current location lacks a qualified pool of applicants, it’s time to consider your relocation options. Oftentimes, areas near higher education facilities are desirable because of the ready supply of college graduates.
The New City Offers Tax Breaks and Incentives That Can Make Your Business More Profitable
Many cities across the country are attracting new businesses with lucrative tax breaks and incentives. The city of Round Rock, TX is a prime example of this. In recent years city officials have approved a number of relocation and expansion incentives in an effort to attract more businesses that can improve their community.
The Business’ Current Location is Declining
The Great Recession has given many of today’s entrepreneurs a first-hand look at how a city can rapidly decline. When a city’s economy is struggling it’s much more difficult for most businesses to prosper, especially if they are dependent on the local market for revenue. Cities like Detroit serve as real world examples where mass exodus occurred due to the decline of the local economy.
Overall Lower Cost of Doing Business
One of the most common reasons why businesses relocate is to lower their operation costs. The cost of doing business can vary significantly from one city to the next. Chief among these concerns is the cost of owning/leasing and operating a facility. The cost of energy alone can determine whether a business is profitable or losing money every month.
Another City Offers a Better Quality of Life
The happiness of employees matters significantly because it impacts productivity. When a city offers a better quality of life it can ultimately determine the success of a business because it’s also easier to recruit top quality employees. Quality of life factors include lower cost of living, better education systems, the cultural environment, entertainment options, crime rates, healthcare services and the state of the surrounding area.
The Business Needs to Upgrade Its Facilities
Startups tend to start small and move up to larger, better-equipped facilities. When the time arrives to find a new facility some businesses discover that their current city lacks viable options. At this point companies have two options: build a facility or relocate to another city. Most businesses don’t have the capital or time required to build a facility as well as invest in upgraded systems. The easier and more affordable option is to relocate.
Businesses are well positioned to benefit from a relocation because they already know the shortcomings that are stifling growth. By looking outside of the immediate area business owners improve their chances of finding the location that’s best suited for the company’s needs and will support revenue generation. However, this requires that company clearly define what a new location must offer. If you take your time to fully access all viable options and research all of the factors above the risk of a relocation is usually lower than the rewards.