Impartial advice needed for change of business location

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grandslam

Guest
We are in the signage and print business, currently operating from a rural location that is somewhat out of the way, it has done us fine so far, the rent is reasonable enough but it is in a shared facility and the landlord is letting it get scruffy looking. Current space = c. 1500 sq. ft.

During the ‘good times’ we doubled turnover every year but only in the last 6 - 8 weeks have we noticed a significant slowdown in business.

A shop unit and warehouse nearby has recently become available the size is approx 2500 sq. ft, it is edge of town location and fronting a busy road, it is also adjacent to one of our exiting customers who also refer business to us. By the time we consider rent/rates, etc we would be looking at an increase in outgoings of about €1,000 per month. There may also be an option to buy in the future – but that is a different story!

My gut feeling is that to move the business is the right option for our business, speaking to my employees and friends the majority say it is also a good idea, my partner has a wait and see approach to the situation.

Am I looking too optimistically at this or is my partners strategy correct?

I consider the options to be


1. do nothing
2. move and introduce new lines to utilise the space
3. move and try to sub-let a section of the building

Considering option 2 – at the moment I don’t really want to invest in new products/lines in case the downturn is protracted, we don’t really keep stock, the majority of supplies are available overnight from suppliers

Do we have any other options here?

Considering option 3 – what sector could we share with? A designer is the obvious choice but we do work with several designers and would be concerned that this would alienate others.

I feel I am too close to this to see the wider picture – what other sectors would we have natural synergies with?

There is a lot of words used here to paint this picture and frame the three key questions. Any advice and opinions gratefully received.

Thanks
 
An increase in outgoings of €1,000 per month is €12,000 per year.

As you have already suffered a significant slowdowm in business, could you really afford that?

It is not something that I would personally consider at the moment. I would suggest you wait and see how business goes for a while longer.

What do others think?
 
Hi Grandslam,

Could you maybe see if the landlord of the new premises might accept a reduced offer for the premises, in line with what you are currently paying? At the moment with reduced activity in the market he could be looking at a long void period, he might consider a low offer in the current market.

I would bargain hard and even see if you can get a rent free period which would mean you might actually make a saving for moving.

Might be worth a try.

Good luck
 
1: try and bargain the rent of the new premises down, you have nothing to loose by asking

2: you need to try and estimate the cost of the move, both in terms of the physical "lift and shift" of your existing operation, but also the cost of any fit out or premises changes that you need to make and also how long will the move take to complete and will this mean that during that period, you won't be producing and therefore earning

3: Is there merit in talking to the local enterprise agencies to see if there is any support they can offer you, either in terms of other options in relation to premises or in relation to launching new lines. (which may mean more employees)

4: it's unlilkely in the current environment that you'll be able to sublet, there is too much empty property out there
 
thanks for the suggestions,
BetterBiz & mpsox - we did haggle on the rent and got a dig knok down on the asking and what we are prepared to pay/ can afford to pay.
i didn't think about asking for rent free period while we move in. I think it'll take the guts of a week to decommission our equipment, move it and get set up.
Feb is a poor month for us every year for some reason and our figures reflect this, so for the next couple of months it is the wait and see approch as Domo suggests.

thanks

grandslam
big ideas - little money!
 
grandslam said:
A shop unit and warehouse nearby has recently become available the size is approx 2500 sq. ft, it is edge of town location and fronting a busy road,
Click to expand...

Without knowing the details I would say go for it, given you say your business is in a rural location already. The extra business you should be able to generate ( because of location + extra size etc ) will pay the increased rent.
 
grandslam - really, your only problem is that the building is 'a bit scruffy looking' - am I correct?

You mention possible location benefits for the new alternative site but is edge of town location and main road frontage really that important for a print/signage business? And let's not forget the actual cost of physically moving and all that involves + an extra 12K a year in outgoings + increased bills/heating etc possibly together with having to inform customers of change of location, maybe scrap existing stationary etc etc

If your landlord is reasonable enough how about approaching him with a view to sprucing the place up a bit, offering to make a contribution?

Very tempting to move I'm sure but for me the main motivation in moving to larger premises is increased business/capacity requirement or the likelihood of increased business - which seems to be far from a certainty at the moment.

If I were in your shoes, I'd stay put for now.
 
I think your gut feeling is probably the right one.

Don't underestimate what the extra visibility will bring you in increased trade.
 
Grandslam, If €1000 is a big hit to your cash flow then ask yourself if the new location will increase business (do you get passing trade) if not then insist that your landlord spends a few Euro doing the place up and stay where you are. If €1000 is small beans to your business then move.
 
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