An important part of managing your space is knowing whether or not it’s time to move. While the decision to relocate can be triggered by many factors, such as expansion or growth requirements, space availability, a desire to improve one’s image and/or location preferences, the cost to relocate should always be considered before you make any final decisions.
Relocating involves direct costs (e.g. physically moving) and indirect costs (e.g. notifying suppliers, clients etc.). In this article we will outline direct and indirect relocating costs you should consider before deciding whether or not to move your office space.
Direct Relocation Costs
Direct relocation costs are some of the costs which can be more obvious to businesses that are considering moving. Some of the most common direct moving costs affecting business owners include:
- Physical relocation costs: $2/sq. ft.
- Changing address in stationary/business cards: $1/sq. ft.
- IT distribution connections: $3/sq. ft.
TOTAL ESTIMATED COSTS: $6/sq. ft.
Indirect Relocation Costs
Indirect relocation costs are often not considered by business owners. Below are some of the most common indirect relocation costs to consider before making your office move.
- Personnel time: You will lose productivity as you assign staff for activities such as the following:
- The actual move in and move out: This can include designing executing layouts, coordinating movers, moving files and furniture, and making sure employees are familiar with the layout of the new space.
- Changing printed materials: This can include the redesigning of calling cards, letterheads and brochures to include the new address.
- Organizing cabling and telephone service providers
- Organizing security features such as access cards
- Notifying suppliers, clients and your financial institution
- Down time: There will be a couple of days where your employees will be focusing more on moving vs. production
- Using the move as an opportunity to improve systems: As a growing business, a move can also be the trigger point, where you can force system improvements such as:
- Improving the efficiency of your office layout: A move is a great opportunity to have a survey, focus group, or feedback session with your employees to get their feedback on their wish list for the new layout of the new office space. You might be surprised how a simple idea, such as putting two co-workers who work together a lot, or putting a photocopier in the hallway, may translate to more efficiency in the long run.
- Changing Provided Materials: You can update and upgrade your printed materials to improve public awareness and marketing.
- Organize Cabling and Telephone Service Providers: While you move you can upgrade your IT systems, improve your networking capabilities and optimize to accommodate long-term business plans
- Organize Security Features: Improve the layout and execution of security clearances systems
- Announce your move and associate it with an improved image
- Increase Employee Morale: Use this time to get your employees excited about the move and the new space by making it the symbol of your company’s expanding business. This can also be a time to improve working conditions and spread the word about opportunities for advancement within the company.
Should You Make the Move?
Taking the above direct and indirect costs into consideration, you may be wondering if it’s worth it to move your office after all. Before moving, be sure you have also taken the following into consideration:
- Be sure you fully understand the reasons for your move, and analyze the risks vs. the benefits.
- Know your options. A good real estate agent will investigate and examine all your options for you. For example, your existing landlord may have a relocation clause in the lease that provides you with the ability to expand, or your landlord may relocate your company elsewhere in the building or within its portfolio.
- Offset the costs! Turn your move into an opportunity to offset your costs by improving your company image, employee morale and company system efficiencies. Also, should you choose to relocate, a good real estate agent will help you use these costs of relocation in negotiating with your potential new landlord. These costs can often be offset by an early occupancy or free rent period in your new lease.
Are you considering relocating your office? Bedrock Realty Advisors Inc. has been helping companies negotiate new office leases, subleases and lease renewals for 14 years. For more information or assistance negotiating your next commercial lease, Contact Us.