Relocation

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Relocation

Businesses move for the same reason that families do: they outgrow their quarters or shrink in size; they need to follow those who provide their income; they perceive new opportunities—and sometimes because they just decide to do it for altogether other reasons: a change in scene, the ocean, the mountains….

Business relocation is never simple but its expenses, complexity, the analysis and planning the move requires, and the time horizon needed to do it well will depend on the type of business it is, its size, and the distance moved. The easiest relocation will be associated with a service business which provides intellectual or information products to its clienteles from an office setting—provided it is relatively small and moves within the same metropolitan area. But even in such a situation, moving the company's computer network will present special issues and managers will typically worry about the commuting distances imposed on some of the employees.

The most inherently difficult and potentially risky relocation is associated with a retail operation—unless the business sells a line of unusual, rare, and difficult-to-get products so that customers will find the way to the store no matter what—or unless the retail business is mostly Web-based. A well-known phrase associated with real estate applies to retail: location, location, location. For this reason, also, retail stores are often forced to move if the "location" where they find themselves suddenly or gradually loses its value, as may happen because of changes in the highway system or gradual loss of customers. Many businesses have moved from decaying urban centers to suburbs—and sometimes from decaying suburbs to areas of urban gentrification.

The move of a manufacturing operation is typically the most complex. For that reason production facilities are usually moved as part of long-range corporate modernization plans, take place in stages to minimize down-time, and extend over longer periods.

Businesses that relocate from one market to another—thus a retail store or a locally oriented consultancy, for instance, moving a significant distance, city to city—are in effect restarting their businesses and must view the relocation as a new start-up. But every relocation has some impact on customers and suppliers and will signal gains and losses in these categories.

A special category of move sometimes faced by managers is the "consolidation"—under which, for instance, a departments must absorb one or more operations located in different cities. These tend to have additional dimensions in that all the usual aspects of a move are involved along with reorganization and integration of new staff and equipment in an existing function.

THE MOTIVATION

The motivation for business relocation is always and unfailingly money. Businesses move because they fear that they will lose business, incur substantial new costs if they do not move, or because they perceive substantial new revenues resulting from the move. Even arbitrary relocations obey this rule, e.g., an owner who decides that he or she must live in Seattle or finally go home to Charlotte, N.C.: in such cases the move will be accomplished because the owner has the surplus funds to undergo the great adventure. Some relocations, indeed, are forms of corporate self-assertion, public ways of signaling having come of age. A new building has been erected in a fashionable business park, and the business proceeds to its new quarters with some fanfare.

THE PROCESS

Shelley Seale, writing in the Austin Business Journal with a focus on retail (but her words apply to all types of relocations) spoke truth when she said: "The most important aspect of relocation is allowing yourself enough time to plan for the move. Most retail stores should plan at least six months in advance—possibly as much as 12 months if your business is large or is moving a long distance. Proper planning is vital for both the logistics involved and your marketing plan. It can make the difference between your business growing and thriving or withering after a relocation." Seale expresses the process under five commands: 1) be prepared, 2) be focused, 3) be timely, 4) be realistic, and 5) be customer focused. The first command relates to planning, the second emphasizes that the relocation must be under the single command of an individual who ties the project together and delegates all other work. Timeliness refers to the scheduling and staging of the move itself. Things can go wrong, and a realistic expectation of disaster suggests that fall-back plans must be in place. Finally, no business moves effectively unless its constituencies are informed well in advance and helped to make the transition with the company.

Moves have a way of looming ahead for a long time before the first steps are actually taken—with all those directly concerned with management well aware that a move will be necessary sooner or later. The process tends to begin with looking for new quarters. By the time this begins, usually with discussions with real estate agents, the general area has already been fixed upon. Depending on the business, targeting itself may have been preceded by market analysis and visits to different areas by management. In parallel with finding the location, the business will typically begin planning on a technical level. Moves tend to be periods of renewal. Old equipment and systems are replaced; acquisition steps begin early and well before the new site is found. Difficult operations are analyzed and logistical issues examined. In many professional service businesses possibilities exist for temporarily operating from dispersed locations—and early staging of computers and people to their homes for temporary work will begin. In retail operations inventory will be sold out to reduce the amounts of goods that must be moved. In manufacturing operations production may be increased to have inventory to sell even as the factory is moved. In an operation of any scale, these many activities become complicated and need coordination. It is good practice to establish a "move committee" which regularly meets to keep the action organized.

Detailed plans for the move itself tend to be nailed down once two dates are fixed. The first is access to the new quarters and the second is the move-in date. The latter is fixed after site-improvements are completed and service installations (like telephone and computer networks and/or special power and gas facilities) have been made. Moving plans involve employees who typically assist in packing, internal and external specialists required to prepare equipment for moves, the sourcing of moving specialist, and arrangements with landlords at either end. In parallel with these activities, fall-back strategies will be tested, including communications, emergency service of selected customers, and the actual provision of services from temporary locations. A public relations campaign is always involved—even if the company is too small to call it that: customers and vendors must be notified in advance and provided with points of contact.

The move itself, for most small businesses, may be accomplished rapidly, usually over a weekend. In larger operations, of course, the move may take several weeks with different centers and departments moved in logical sequence, brought on stream and then assisting from the new location. Following the move itself, most relocations require a period of start-up at the new quarters and "mop-up" operations at the previous site. The mop-up operation can sometimes be complicated and involve the sale and movement of excess furniture or equipment. The reopening of the business at its new location is often a significant event for a retail business, long planned, and launched with appropriate hoopla. In the case of service businesses, the celebration may take the form of a formal reception to which important buyers are invited.

STRATEGY AND ADMINISTRATION

Relocations may have a predominantly strategic motivation or the strategic purpose may be minimal. Retail stores are almost always moved for strategic reasons, but office-based operations or those that deliver services to customers directly often simply move because they need more space. In either case, successful relocation is above all an exercise in well-planned, disciplined, and therefore effective administration—an art that tends to be undervalued in an era of marketing. To be sure, poor strategic choices can doom a relocation. Bad outcomes are due to neglect of necessary research of the chosen location, its demographics, and cultural traits. But the actual movement of a business from one place to another is one of the most exacting management tasks any business will undertake—requiring foresight, anticipation, and attention to the most minute details. Timing is very important, especially an ability to predict how long something will take. Unusual circumstances must be envisioned in advance and planned for, thus all manner of comfortable assumptions must be questioned. The effective manager of a relocation will not assume that all employees will make the move, even within the city, and have temporaries at least on call in the event this happens. Alternative systems of communications will be in place and will have been tested. Zoning ordinances and permit requirements in the new location will have been consulted. System will have been tested early enough to be reliable. The business that relocates well manages well. And nothing is as important as good plans, long to do lists, intensive attention to detail, and rigorous follow-through.

see also Site Selection; Zoning