Who doesn’t like to grow their business and move towards the greener side of the financial farmland? Entrepreneurs are always looking for opportunities to expand their business in any way possible. Relocating to a new place is definitely a salient option if that’s what it takes, however it comes with a tag of ‘Proceed with caution’.
Change in your business location can increase your proximity to your target consumer market, or put your business in a position where you face less taxation, and/or in a position where you have access to better resources and inputs. Some decisions might boost your business up to new highs and some, can be catastrophic. Here are the few worst mistakes you need to avoid while relocating your business to a new geographic location to increase your chances of making this move work for you.
Underestimating Customer and Client Retaining
Old clients are not always drawn to the new location of your business as they are open to a whole new market once you move. Techniques like social advertisement and marketing, offering discounts are of course some of the many ways to retain customers but it’s not necessary that they will follow you to your new location. You should have a strong idea and the appropriate information of your client-base so you know how many are going to follow you and how many probably will not.
You find a place worth moving to, choose the moving company, you move to the place, you set up your business, all is working fine. Initially you hire new workers, but gradually you may find that it gets difficult with time to find more new workers for the job you need to offer and for the wages you are offering. It’s best to have keep a record of the hiring and pay-grade status of people in the new city/state before actually relocating.
Miscalculating Start-Up and other Costs
The calculations you made in your mind and your diary can turn out to be wrong when the actual transition happens. The costs for moving your home and business might shoot up like a star in a blink of an eye. You need to be very careful before and after moving since it might change the financial and social state of your business. You have to think about living and working costs. You will not be able to predict everything but you should be able understand the big picture and the key moving facets or you are turning this into a guess game and a gamble.
That is not what solid business professionals do.
You need to be thorough with the future plan and monetary risks involved. You will have to position your business in such a place which offers a huge scope of success for the future keeping in mind the socio-economic aspects of the place you are planning on moving to.
Lack of Knowledge of Tax Advantages and Disadvantages
Tax breaks are offered to attract new businesses in some cities to create more jobs and economic activity for that city. Tax incentives are often in the form of sales tax exceptions, income tax reductions, or property tax abatement, etc. Small business cannot be always garner the same tax incentives to relocate to that city or area the way large business is able to. This is only logical and needs to be understood.
A loss of tax incentives can prove bad for your growth which can happen when your business is not able to hire or fulfill the required number of jobs as expected from that business move. This can be quite unnerving and this is why this needs to be understood before any move is attempted.
Not doing Regulatory/Environmental Check
If your business interacts with environmental limits by any means, you might end up paying even more than what you were supposed to than if you just remained put. You should look at the local politics about this. A Democratic region is going to be a little more anti-business and have stronger environmental regulations than an area that is more pro-business which is what a Republican area would most likely be like. This research can be done with some phone calls and using the Internet.
This extra tax burden will hamper business growth.
“Don’t fear change – embrace it.” – Anthony J. D’Angelo. Well, considering how many businesses have found the going tough after relocating because of some gross miscalculations, let’s just say that the D’ Angelo’s adage is best taken with a pinch of salt.