Tuesday, July 13, 2010

Moving your business - More cost or profit?

It is one of my underlying commercial real estate philosophies that business owners, do not give one of the most important decisions in their business life the importance it deserves.  I mean,  the choice of where we locate the business.  We have a general idea of where to locate,  but have you really thought about all the numbers.  Sometimes, overlooking a few can be very costly.  I have met business owners whose business location or building is actually hurting their business. If they looked at the whole financial picture,  they would be gone already.

If you are considering a new location, here's just one item to consider for example:  Will your service or delivery vehicles be closer or further away from their customers?  Six additional miles may not seem like much until you crunch the numbers.  Six  times eight trucks times 600 trips per year adds up quickly.  At a reasonable seventy-five cents a mile,  that's over $20,000. Also consider an additional twelve minutes per employee per trip. Even at minimum wages,  that's about $10,000.  Now consider that you moved six miles closer.  These become savings or additional profit.

You know your business better than I do,  so think about your customers,  your employees,  your vendors.  Can you save money, or improve your service by moving.  If so, then it is the right decision.

There are many more factors to consider when we start to look for a new location for you.  Not the least among those are lease versus buy. But we can crunch those numbers  once we find a place to move and calculate its value to you.      

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