Whether it’s your business, or a business you’re investing in, it’s important to understand the significance and logic behind business relocations. After all, they aren’t cheap or easy. And while it may seem like a waste of time or unnecessary hassle, the reality is that – under certain circumstances – relocating a business makes a lot of sense.
First off, you should know that relocating is easier than ever. A number of professional moving companies have mastered the process, meaning even interstate moves are efficient. These services handle everything from vehicle transport and packing and unpacking services to utilities transfer and paperwork. So go ahead and get rid of the idea that relocating a business is an administrative nightmare or clerical headache. Instead, focus on the many other benefits, including the following:
1. Cheaper Real Estate.
One of the first things to think about is the price difference in real estate. The differences can be drastic depending on where the business is currently located and where it’s going. In some cases, the price per square foot in one city can be three, four, or five times the price for a comparable building in another city.
For example, for $5,000 per month you can get approximately 2,861 square feet of commercial office space in Atlanta. However, for that same amount, you can only expected 811 square feet in New York City. Chicago affords you 1,714 square feet, whereas San Francisco only lets you enjoy 921 square feet.
Again, it depends on where the business is moving from and where it’s intending on relocating to. The price difference in real estate alone can be a reason to justify or avoid relocation.
2. Better Access to Talent.
The second thing to think about is access to talent. Certain cities have much better talent pools than others. If a business is struggling to find the right employees or executives, a move may make sense for long-term success.
Very rarely will a lack of talent in a current location justify a relocation on its own, but it’s certainly a factor to consider. It may make sense to move closer to colleges and universities that have excellent business programs, as these schools always like to develop hiring pipelines for their graduates.
3. Tax Breaks and Benefits.
Many states and cities offer tremendous tax incentives and financing benefits for relocating a business. For example, the state of Texas has an initiative called Texas Wide Open for Business, which is designed to make it easy for businesses to move to Texas. Other states have very similar programs, too. In some cases, a move can save hundreds of thousands – if not millions – of dollars over the course of a few years.
There are also lots of tax codes and laws that discuss which expenses can and cannot be deducted or exempted during relocation. A tax planner or accountant can analyze these circumstances for businesses and determine whether or not it makes sense – from an accounting perspective – to relocate. Many times it does.
Relocating May be Practical
As you can see, relocating a business can be valuable under many different circumstances. Whether it’s your own business, or one that you hold a large ownership stake in, it may be worth considering a move. According to one study, some of the top cities to start a business in include Shreveport, Tulsa, Springfield, Chattanooga, and Jackson.
While relocating a business isn’t a decision that should be taken lightly, it is a discussion that needs to be had if a current location is placing unnecessary constraints or limitations on a business’ ability to maximize profitably. Consider the aforementioned benefits when weighing the pros and cons.