Selecting a business location requires
more than looking at the base lease
rate. A plethora of elements must seamlessly dovetail to lessen the impact on the bottom line.
“Moving day is not the time to discover
that crucial features of a new location are
unsuitable for your operation,” says
Barbara Cooper, an adviser for CRESA
Partners Orange County. “Choosing the
right location for your business is a major
decision that requires time and expertise to
achieve an optimal outcome. A company
can waste time and money spinning its
wheels in trying to make the right decision
about relocation. Hiring a corporate real
estate adviser helps a business incorporate
the key business functions into its relocation equation; identify competition, existing, potential and future customers; and
target the most optimal new location based
on its criteria.”
Smart Business spoke with Cooper
about how real estate decisions are made
and how advisers can help companies
complete successful relocations.
Why is it crucial to invest time and seek
expertise when relocating your business?
Relocation for any business involves
strategic planning. The first question a
company should ask itself is: ‘What is
involved when considering a relocation?’
Corporate real estate advisers have come
up with many key questions that a company may or may not be asking itself at the
time of a relocation evaluation.
Is the company downsizing, expanding,
or needing to place itself in a more strategic environment for its customers?
Will the proposed relocation make sense
on the balance sheet?
Will this relocation increase or lower production cost?
Is the relocation financially feasible for
the company? (At the end of the day, it has
to make financial sense.)
Which new location is best for the firm
and why?
Should the firm purchase land and/or a
building, or continue to lease?
What are the company’s existing real estate circumstances and what are its
options?
Will this relocation enable growth in
terms of space and work force requirements?
At what rate is the firm growing?
Is the firm/facility dependent on being
located in a specific time zone?
Should the firm be located along the
Eastern Seaboard or the Pacific Coast (if
remaining in North America)?
Does climate affect the business?
Would proximity to the Mexican or
Canadian border be beneficial?
Does the firm/facility need to be within
close proximity to primary customers, suppliers, or specific distribution channels?
What about key locations for transportation like airports, train/rail lines and sea
ports?
What local legislation could affect the
company’s operations?
The real question is, ‘How many firms are
going to ask themselves these questions?’
The answer? ‘Not enough.’ That’s why real
estate advisers do the asking for them.
What are the benefits of a well-executed
relocation?
A well-executed relocation plan will yield positive results. Hopefully, the company
will experience a seamless move and relatively few or no interruptions nor delays in
business operations. As a result of the relocation, the business should experience
benefits such as cost efficiency and closer
proximity to core business requirements
like key suppliers, distributors and customers. Thorough analysis of the pros and
cons of a move before it takes place is
essential. The time invested in this process
will pay off in the end.
What are the consequences of an ill-planned
move?
A poorly executed relocation plan can be
devastating to a company. Time and money
will be wasted. Also, the company could
suffer in regard to its core business functions. Business could be delayed, which is
extremely costly to any firm, and its reputation could suffer as well. The public
assumes that a company has done its
homework before it selects a new site.
How can experts help companies minimize
the financial and operational impact of relocation?
Again, saving time and money is critical.
The key reasons a firm elects to relocate
must be addressed from the beginning. A
real estate adviser will honor the firm’s
objectives for relocating and make it a top
priority to resolve those issues in the move.
A relocation should facilitate core business
operations and make a positive impact on
operating expenses.
The relocation must present multiple
solutions: employee retention, image,
future growth potential, key/ideal proximity to customers, suppliers, distributors,
and the total cost. Cutting costs is almost
always at the top of the list, but it is one of
many factors that lead to a successful relocation.
BARBARA COOPER is an adviser with CRESA Partners Orange
County. Reach her at [email protected] or (949) 706-6600.
