Just as the housing market is seeing improved movement in 2010, after a long period of stagnation, so too is the commercial property sector now seeing signs of recovery. The Cluttons' Commercial Property Market Outlook Report for July 2010 reported that in Q2 the value of transactions in office real estate had returned to a level last seen in early 2008, before the recession took hold(1).
After sitting tight during the downturn, some firms are finding that they can negotiate lower rent rates or rent-free periods if they relocate. A rise in remote and flexible working in many businesses has also enabled some to consolidate their offices into less floor space, and make savings by moving to smaller premises.
But moving office takes careful planning so here is our guide on how to avoid some of the most common headaches associated with making the move.
1) Have a timetable
With the huge range of services that need to be organised to set up an office, coordinating them to one start date can be tough. Start negotiations with service suppliers early in order to allow for installation time, but bear in mind that lease negotiations can drag on until near the move date, so you may need to keep your service suppliers informed and move start dates with them if necessary. Think about the services that you will definitely need from day 1, prioritise them, and look out for providers who can offer a quick installation guarantee.
2) Location, location, location
Make sure your new premises have ease of access to transport, suppliers and customers, as it will help keep your costs down and facilitate trade. With suppliers that are most crucial to your business, research whether any particular area offers a cost benefit. For example, companies who rely on super-fast internet connections to run their business effectively currently benefit from being within the M25, where 100Mbps fibre connectivity is available at a fixed, affordable rate. However, good quality alternatives are available everywhere; just make sure you find out first.
Also check with your employees whether your new location would affect their commute to the extent that they would reconsider working for you. This will effect whether the office you move to is good value for money — cheap rent is rarely as important as minimising costly staff churn and maximising staff productivity.
3) Consider expansion
According to our research, most small and medium-sized businesses are expecting a return to sustained growth in 2011(2). If you are moving your business between now and then, it is advisable to at least give yourself the capacity for growth. This can mean either building into your contract the option to take more space, or taking a bigger office to start with and sub-letting any space you don’t need.
Forward-planning for expansion also extends to your service suppliers. Setting up in a new location can be a good opportunity to start afresh and update your technology and services, in preparation for future development. For example, if you are organising an internet connection for your new premises, then opting for a fibre line (rather than traditional copper services) will ensure your connection is future proofed, as fibre has unlimited bandwidth potential. The bandwidth capacity of your connection can then be scaled up as your company grows, or as higher speeds become the norm.
4) Avoid making immediate long-term contractual commitments
With some negotiation, landlords should agree to a ‘settling-in’ period before tying you to a long-term contract. Again, this also applies to service providers, some of whom will offer no minimum term agreements, giving you a flexible contract and more control over your financial commitments.
5) Don’t build infrastructure that you don’t need
You will be more flexible as a business and keep your costs down if you outsource where possible during the move. Look into moving your servers into secure data centres, and find out whether having your network managed remotely by an ISP would suit your business. Also use the relocation as a time to embrace new technology and systems that can save you money, such as cloud computing services, and make sure you get the right security and managed firewalls needed to protect your business.
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