How to Move a Small Business Out of the House

As your small, home-based business begins to expand, chances are you are going to out-grow your home office at some point. Since moving a small business out of the house requires a substantial investment that will be a big draw on your cash flow, you need to approach the process with careful consideration as well as professional advice from a qualified lawyer.

Here are some tips to guide you along the way.

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Warning Signs it’s Time to Move a Small Business Out of the House

The first step to moving is being aware of the signs that your current space can no longer do the job:

1. You feel cramped. With growth usually comes more workers, more equipment, more supplies and more stuff. Move a Small Business Out of the HouseIf you find yourself competing for space with any of these things, then it means you need a bigger physical set up. The more cramped you are, the more it will drive down your productivity.

2. Inadequate or unavailable facilities. As your business grows, you may find yourself needing space that does not exist at home, such as a conference room, or a reception area for customers. Certain equipment may also require special renovations that you cannot do in your house.

3. Strict Zoning Laws. If you live in a region with strict zoning laws, then you may be limited in terms of how many people you can hire or how often customers can meet with you at home since the increase in noise and decrease in parking may bother your neighbors. If this is putting a strain on your business, then it is another sign that it’s time to move elsewhere.

4. Location, location! Your location may be inconvenient for customers, (after all it is located in a residential area and not commercial one) and thus it may be hurting your sales.

5. Boundaries. If you start to see that boundaries are getting crossed between your work life and your home life, then this is also an important consideration. If family members seem to always “get in the way”, if customers or workers are seeing a bit too much of your house, if you seem agitated because being at home is a constant reminder of work, then take note. All of these are possible signs that it is time to move your small business out of the house.

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Deciding Where You Should Locate Your Small Business

Choosing the best location for your business will involve several factors. You need to decide how important location is to the success of your business as well as the kind of facilities and services your business will need to operate smoothly and efficiently. You also need to know how much you can realistically afford. Here are some major points to consider:

What kind of business are you running? You may have more flexibility with a business that is based online as opposed to a brick and mortar establishment, such as a store or a restaurant (though even here you may have some degree of flexibility, as I’ll explain below.)

How many people will be occupying the location? Keep this in mind: people = space. If you plan on having on-site employees then your location will need to have enough physical space to hold them and any equipment that they may need to get their jobs done without stepping on each others toes. You also need to factor in space for customers and any other kind of foot traffic.

What services, facilities, or support do you need? Does your business require distribution or delivery services? Administrative services or equipment? Do you need specialized equipment or a specific layout?

How important is customer proximity? Will you or your workers be traveling to your customers? Will your customers being coming to you? If so, then how will they get there? Will you be delivering goods to your customers? In some cases being too far from your customer base may either result in less business or costs that are unsustainable.

How important is visibility among potential clients or customers? If you are planning on opening a retail, food service, other service-related operation, then visibility could be a key factor in your business’ success or failure. Even if a given, high traffic or high profile location is technically more costly, it may be worth it if it will result in more customer interest and business.

After you have answered these questions, then it’s time to find a suitable location. If you don’t have much capital to work with, then there are typically three available options that depend on the nature of your business:

Commercial Property. Moving into a commercial lease or subleased property may be a good option for a retail or service-related business that needs a visible and/or centralized location yet doesn’t have access to a whole lot of start-up capital. With a subleased commercial property, the you would take over only a portion of a property that is already being leased to another party. Just make sure any lease agreement is thoroughly investigated by qualified commercial lease professionals before you sign on the dotted line.

Shared Office Space. A shared office space is similar to a subleased property. In this case, however, the setup is less formal and restrictive since the renter is not bound by a subletting agreement. This means there is no long-term commitment nor liabilities. Some shared office agreements can last as little as 3 to 6 months- which may be something to consider if you want to try out a certain location, setup, or work schedule before making any serious investment of money on a more permanent space.

Virtual Office Solutions, Business Centers, and Offices “By the Day.” If you will be primarily based at home, but need some standard business services, such as office equipment, call forwarding or a receptionist or an occasional place to meet, then you may want to consider a virtual office or a serviced office within a business center.

When it comes to a small, home-based business, leaving the nest is a very big deal, so make sure you do what you can to treat it that way.

*This post was brought to you by Woodgrange Solicitors LLP

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