The Real Cost of Relocation

In todays economy, the lure of a less expensive lease is the primary motivator for businesses to quickly pack up and pounce" on that relocation opportunity.

(PRWEB) December 26, 2004 -- Is your company considering relocation? In todays economy, the lure of a less expensive lease is the primary motivator for businesses to quickly pack up and pounce" on that relocation opportunity. But, before making any swift decisions, companies need to consider many other expenses (both long and short term) that could potentially invalidate the cost savings on a less expensive lease.

Business executives need to look at the overall picture and perform more of a risk analysis". By analysis, we arent talking about running the actual numbers on every facet of relocation, but we are talking about estimating all the short and long term costs and comparing it to the savings on a lease.

There are several factors to consider. First, what will relocation mean to your employees? Relocating will most likely affect their commute. If it affects employees negatively, for example by doubling their commute time, then you risk employee turnover. Is the status of the address really important? Yes and no. It depends on your business. As a moving company, we at Humboldt dont need a swanky address. We need to be located in a commercial/industrial area because of our transportation fleet. On the other hand, if you operate a real estate business, you would probably choose a premiere location with great visibility to increase your foot traffic.

Now, what about those hidden" costs? When we say hidden, we mean those that are long-term costs that are often overlooked when companies consider relocation. How much will it cost you to update your stationary and collateral material? Will you need new furniture, equipment or special wiring and technology in the new space? Do you know how much it will cost to dispose of unnecessary items, pack everything and move it to the new location?

For one of our storage clients, the KAF Financial Group of Braintree, a lower lease just didnt justify the total cost of relocation. The fast-growing company liked their address, but needed more space for additional staff and storage. After considering both short and long term costs, they decided that a few thousand dollars they could save on a lease just didnt validate the cost of moving the office and relocating their employees. The company decided to renovate their existing space and ultimately, with the help of a design expert, created a more modern space to accommodate storage needs and future growth.

What if your company rationalizes the cost and decides to go ahead with relocation? Then a smooth transition becomes key. A smooth and efficient move from one office to another is essential for profitability, continuity and sanity, whether youre moving a few blocks or across the country. There are several aspects that can make the move much easier on you, your staff and the movers.

Keeping Costs Down. Summertime and weekends are the busiest times of year to move. If you try and schedule a mid-week move during the fall, winter or spring, youll get a better rate.

Extra Costs. Dont forget that the labor is not the only thing you will pay for. There will be a travel-time charge, which is drive time from the moving companys home office to your original home to your destination and back again to the moving company's home base. You should also budget for packing supplies such as boxes, tape, bubble wrap, pads, etc. Generally, moving supplies can run approximately 10-15% of your labor costs.

Be Honest. Did the conference room table not come into the office in one piece? Have you remodeled an entrance way and access is smaller? Can you not get access to the elevators? Any details that would impede the emptying of your office need to be told to the movers before they show up so they can make special arrangements if need be.

Price overruns. Most moving estimates are non-binding. And the best way to ensure that your moving costs doesnt escalate is to give the movers an honest list of what to expect and how easy or difficult access is.

Moving Insurance. Your belongings should be insured during the move against any unforeseen circumstances. Check with your insurance policy. If your insurance provider does not cover items while in transit or in someone else's vehicle, or if they only cover against major disasters versus minor damage to individual items, you should definitely purchase moving insurance from your moving company. Without insurance, per Massachusetts State law, moving companies are only liable to cover your goods for 60 cents per pound. As for the amount of coverage you should purchase, most moving companies insure the goods as a whole, and don't insure individual items. Therefore, you should consider the total value of your goods and purchase enough insurance to cover all of the contents of your home.

Labels. To help organize your move, be sure to label all boxes and equipment as to what room or area they will be going to in the new location. This will speed up the unloading of the truck and save you money in the long run.

Get a Recommendation and References. Dont be afraid to ask the moving company for a list of references, types of moves they had, and dates of the move. Be sure to speak with previous clients to make sure youre getting what you think you are in a mover.

Verify their license. Call your local state's Department of Transportation or other regulatory body as required by law and make sure that the movers certificate number is legitimate. Make sure the mover you are considering is duly licensed by your state as well.

Every business faces the challenge of keeping a tight rein on costs and one of the best ways to cut costs is to reduce overhead. But before deciding to relocate in favor of a lower lease, perform a risk analysis that considers all the factors that could ultimately cost you more in the long run.

For more information, visit www.humboldt.com.

Editors Note: DArcy Cannava-Goldman, President, joined the business in 1989 to add to the better half of the Goldman husband and wife team. She is responsible for the continued growth and success of the company. A graduate of the University of Miami, D'Arcy is the past president of the Women's Educational & Industrial Union and a member of the National Association of Female Executives and the South Shore Women's Business Network. For an interview with DArcy, contact Steven V. Dubin, PR Works, (781) 582-1061 or email sdubin@prworkzone.com.

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