Many times, small businesses can save money by scaling back on the size of operation. Rental prices are dropping on many commercial properties and some people are even moving into home-offices to reduce operating costs. Depending on the size of your business, moving to a smaller office could save you thousands of dollars a year. Here are some of the pros and cons to consider:
- Immediate cash flow. Moving to a smaller space will put cash in hand that can help offset business losses or increased expenditures in transportation, equipment or other operating costs.
- New location. Closer proximity to your competitors or to busier areas of town can actually increase foot traffic as well as visibility for your small business, even in a smaller space.
- Cleaning house can help you find money in your move. Use your move as an opportunity to streamline your equipment and supplies. Evaluate your inventory and purge things you simply don’t need. Consider selling old equipment, furniture, uniforms and unused supplies.
- Fewer employees. A smaller space means less room for as many people as you had in your former office. You may have to let some of your workers go and compensate for their loss with an increased workload for the remaining employees.
- Moving costs. Depending on the size of your business, you will need to pay movers to ship your furniture, electronics and supplies to your new location. To save money here, plan your move six to eight weeks in advance and avoid moving around the first of the month (if possible) and in the summer, as these are the most popular times with the highest rates. Have employees box up their essentials and move them on their own, leaving only the large furniture and electronics for the movers.
- Loss in customer service. The last thing you want to sacrifice is your presentation and service to customers. No matter if you deal with the public or only B2B clients, you want to make sure that a smaller space does not give your customers an impression that you aren’t doing well or that you are less professional than before.
Other things to Consider
Before moving to a smaller space, make a phone call to your current leasing company to see if there is room to renegotiate your current rental price. Particularly in large commercial plazas where vacancies are high, you might find that your leasing manager is willing to permanently or temporarily reduce your rent to help accommodate your financial needs in slower times.
When looking for smaller space, you might also consider renting industrial space over an office in a commercial building. While the neighborhood may not be as glamorous, these spaces are traditionally much less expensive.
Downsize within your existing space and rent out unused areas. If you can divide your large office into two or three smaller spaces, you can earn money by leasing to other small businesses without having to move.
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