Rarely does a one-size-fits-all solution work…off the clothes rack or on the business track.
And when it comes to scaling your business at the proper time in the most efficient way, you’ll find that what worked for one company may bring financial strain for yours. A stringent checklist of pre-determined steps simply doesn’t deliver well, since flexibility and situational analysis are key to business success.
However, there are guidelines that can help you make those weighty decisions as it concerns your business growth and expansion.
As a commercial property management company, we hear tenants often grappling with whether or not they should move to a bigger commercial space. But it’s not as easy as simply determining whether or not you’re out of space. A variety of other factors play into making a wise decision about when it is time to move to a bigger unit.
Should I move to a bigger commercial space?
Here are a few guidelines to assist in your decision making process.
1. Determine Why You Should Move
First, write out a list of reasons why you think you should move to a larger commercial property. Go ahead and list all of your reasons, whether they be frivolous or not. Next, determine if any of those reasons could be fixed simply by adjusting your space, discarding unused items, organizing your inventory or streamlining the way you run processes.
Now look at what’s left? Are there still substantial obstacles to your company’s success because of the current space you’re in? And don’t worry. If you’re wondering what obstacles we’re talking about…we’ll get to that.
2. Look at Your Capital
Your size upgrade won’t just result in a slight monthly rent increase. It often takes much more cash than expected just to move. Moving expenses, deposits, cleaning fees, utility transfers, new furniture and much more can quickly deplete any cash reserves you may have set aside for other purposes.
If a move is in your near future, just make sure you have a thorough understanding of the costs associated with it.
3. Analyze the Motive
Okay, admittedly, we’ve all probably been pulled into a decision that was based more upon emotion than logic. You’ll want to make sure this isn’t one of those times! Do you want to move just because you found “the perfect little spot for your cute boutique”? Or perhaps you’ve been approached about a bigger space that is “suddenly available, but it’s going to go fast!”
There will always be good opportunities. Don’t base a decision such as this one on the fear of missing out. Base it on the facts and the numbers.
4. Get an Outside Perspective
Outside perspective will prove invaluable in any business decision. This one is no different. Ask a trusted business colleague or mentor to visit your space and take a good look at how it is used. Do they hold your same opinion about the space being too small or inefficient for your business? Do they see any areas where you could change your current usage to better serve your needs in the existing space?
Also important is the input of your property management company. At PMC, our tenants’ success is our main goal. We are always open to ways in which we can adjust space in order to best accommodate our tenants’ needs. If you’re not with us for your commercial property lease, hopefully, you are with a property management company that has these same values. They should listen to your needs within the current space to see where improvements can be made.
5. Analyze the Obstacles
Remember that list of reasons to move? Some most likely were tied to observed obstacles. Here are a few you may be considering:
- Not enough meeting room space – Are your employees leaning on door frames, sitting on the floor and tripping over each other just to attend an all-company meeting? Do you constantly apologize to clients about the tight quarters when they visit the office?
- Productivity suffers because of lack of space – Do employees have to move multiple items out of the way to access another? Is it a lengthy process to find needed items because of the lack of visibility? Is your storage overflowing into other rooms and offices in order to manage? If so, it may be time for a new space.
But remember that many of these issues could also be the result of too much junk and too little organization!
- Customer experience suffers because of the space – Does your showroom space limit the amount of products you’re able to display? Or perhaps you don’t limit it, and customers feel overwhelmed with the tightly compressed visual space.
Or worse, have you had potential customers tell you they didn’t come in because a lack of parking, difficulty finding you, etc.? If your space is clearly turning away customers, it’s time to look elsewhere.
- Your company brand is hurting because of the space – While this also applies to the organizational aspect of your space, we’re talking more about the image of your company here. Perhaps when you first began, your business was surrounded by a variety of other quality businesses. But ten years down the road, three spaces in the shopping center are empty and two of the other businesses have somewhat shoddy reputations.
At this point you need to ask…How is my business being represented by staying here? Could my brand be better represented elsewhere?
6. Analyze the Numbers
In the end, business always comes down to the numbers. So we have to ask…Have you analyzed the numbers? Do you know exactly what the additional costs associated with the move would be? And more importantly, have you determined a projected increase in traffic from visibility, sales, revenue, savings from process efficiency, etc. because of the move?
These numbers are perhaps the most important determining factor. If it doesn’t make sense on paper, then the fancy, new space won’t bring any more sense to the situation.
PMC Can Help Determine Your Space Needs
As we mentioned before, at PMC we care primarily about your success as a business. If you’re not succeeding, neither are we!
Our goal is to fit you in the best possible space for your unique needs, business size and growth opportunity. We don’t want to strap you financially with a space that is too large for your budget or needs. But we also don’t want to stunt your growth in a space that has you bursting at the seams.
Our expert team has had decades of working with business clients to determine what space best fits their goals. Let us help you find the right fit at the right time!
Call us today at 1.304.485.8000