Relocating Your Retail Business

Relocating your business is a major undertaking but there are various reasons that may make this necessary including lack of customers, poor peace and order situation or limited space. But it’s not as easy as simply moving your setup from one place to the next.

One thing in your favor when just relocating as opposed to starting a business is that you already have a lot of knowledge of the location factors that affect your business. With this in mind, here are several key points to study when planning to move your business to a new location:

1. Government Policies. Local governments will have different laws in every city. Perhaps there is a plastic ban in the area and you have to replace your plastics with paper bags. Maybe there is a strict curfew for minors at night, which means you’re better off closing your arcade before curfew time and that you must make enough sales during the period to compensate for the curfew.

Aside from those unique policies, cities would have different levels of taxation for businesses in the area and varying degrees of difficulty in securing permits. To be sure, it’s better to check in the city hall about these laws so you are better guided in setting your business in the new location.

2. Client Accessibility. Relocating to a cheaper but less visible place could probably be the worst false savings decision you can make. On the other hand, going for the highest traffic location regardless of price is also as irrational. Do not be lazy, observe the place and do the math. Construction and renovation are already bad enough for your expenses, so you must be sure that the new place would give you more sales. Check whether your planned location is easily accessible by public utility vehicles if their passengers are part of your market. Have ample parking spaces if there would be a need for them. Moving to a new location will be best if you know for a fact that your facilities would improve.

3. Employee Accessibility. You’re not the only person to have to adjust their waking schedules to beat traffic on your way to work. All your employees would be affected by this decision, some would be closer, but some would be farther away. Will this affect the business? Will they still be able to come to work earlier? If not, do you think it would be better for them to take the afternoon shift? Of course, you don’t necessarily have to change schedules if you operate on a nine-to-five basis. Your employees are still the ones who would decide for themselves if they want to continue. But remember that talent and experience are hard to find, so you might want to make a few adjustments to keep these people at least for the first few months.

4. Supplier Accessibility. Moving in a different location, you have to check if inventory acquisition would be affected. Whether your lead time increases or decreases, you have to compute again your economic order quantity, or the optimal volume of purchase per order you need to make so you don’t run out of stock in the middle of your operation.

If you think your previous supplier just won’t be able to fill in your order fast enough, then you may consider looking for a new and closer supplier. For the first few months of operating in your new location, you don’t want to be out of stock as you are building your image in the area from scratch.

5. Layout. See if the size of the new place is enough to house your equipment and setup. Your layout is important in promoting efficiency in your operations, especially for restaurants that need to find a good balance between their kitchen and customer spaces. If the layout is entirely different from your current place, you have to start designing the new layout that would still be as efficient as the previous setup. Take note of where you place the new reception area and the space you need to allocate when customers line up.

6. Profitability. Why do you want to move your business to a new location? Your main goal in relocating should be to increase your sales by moving somewhere more accessible to your target customers and where there are less risks from external factors such as street crimes, flood, or traffic. Changing places will not just take a lot of money, but also a lot of getting used to for you and your employees. Customer volumes may increase drastically, which is good because that means you profit more, but this will also be a challenge when you need to hire additional employees to handle the workload.

Relocating a business is a risky venture. You build credibility and familiarity the more years you stay in the same address and it is uncertain if people in the new location will patronize you. Despite all your preparation and research a new location can still present you with surprises. Still, making calculated risks is inevitable for entrepreneurs.
*Originally published by the Manila Bulletin, C-6, Sunday, October 2, 2016. Written by Ruben Anlacan, Jr. (President, BusinessCoach, Inc.) All rights reserved. May not be reproduced or copied without express written permission of the copyright holders.