In some industries, it can be easy to outgrow a home-based business.
A good question to ask
“Why did you start a home-based business in the first place”? “Was it to do with lifestyle, convenience, money, family, low overheads? And why are things different now”?
Obviously, in some industries, it can be easy to outgrow a home-based business because of space for employees or warehousing needs.
If starting your home-based business was a dream come true, then take the time to consider any moves to an office complex, commercial or industrial premises? You might just be heading into a new environment that doesn’t suit you or you family or your lifestyle.
With today’s technology, customers can’t tell whether you’re working from a high-rise building in the CBD of a big city or a fourth bedroom in a remote regional area.
While you will continue to save on expenses, you may not be feeling the love for the home-based business anymore, you might even be missing the buzz you had once working with a lot of other people in the same building.
Is running your company from home actually hurting your business?
You’ve outgrown your home- based facilities. The most obvious reason to move the business out of your home environment is a lack of space for expansion. Whether you need space for more equipment, files, or a creative workspace, you know when the spare bedroom or dining room table just won’t cut it anymore.
“Just as you outgrow your clothes, you outgrow your status quo, premises and acquaintances, at times before they’re past their use-by-date, or worse still before you have found new ones”. Peter Sergeant
Ask yourself if you’re turning down business because you don’t have the room or if the clutter is not only creating a disorganised work environment. It could be interfering with your family and the living space as well.
The decision to move can be difficult
When you have reached the point where working from home no longer suits you, the decision to move to new premises can seem daunting. You know that without acceptable premises, you and your small staff may feel that your business doesn’t seem as professional as your competitors. Or that customers are less likely to buy if they can’t see your merchandise in person before they buy.
New and expanded premises can give your business a real boost.
But new premises also require a large up-front payment in the form of a deposit or rent. Monthly rent or mortgage payments, rates and utility bills become ongoing overheads for which the business is liable from the outset. You could also lose the offset on you home mortgage payments.
It’s no secret that business owners struggle with the question of whether they should get premises or not. The right answer to this question will depend on what’s right for your particular business, for your customers and for you and your family personally.
Things you should carefully consider
If you’ve arrived at the point in your business lifecycle where you’re wondering whether it’s time to take on premises, scale back or struggle on here are some questions to consider, which are in no particular order of importance:
- What does the family think? Are they happy with the status quo or are they fed up with all the problems?
- Have you established the viability of your business, and proved you can easily generate consistent enough extra revenue to support additional expenses?
- Will you be taking on employees and are you ready to take on the responsibility? With the right type of employees be readily available in the location where you want to move.
- Have you plotted your business growth trajectory? What does it really look like? Is the current situation just a business cycle boom, or a seasonal influx that will pass in a matter of weeks?
- Do you have a steady stream of repeat customers who will approve of your move and follow you?
- Will your creativity be impacted along with your capacity to innovate? A change in the environment could be both good or bad.
- What are the logistics problems you might have? Is this in the right location for your customer base? Can I access the premises 24/7? Does it have appropriate disabled access? Is there good parking facilities? What are public transport links like?
- What other businesses operate in your area? Do these complement your own? Will you be first to market? Are there too many competitors?
- If your image is a problem, what sort of image do you want to convey?
- I know this is negative, but do you have the option to sublet if required? Once you’ve signed agreements can you get out of them if your business suffers a downturn, or doesn’t meet expectations in some way?
- Are there any social issues that should be considered in the new location, like crime racial issues, aesthetics, shopping or supplier issues and social differentials.
- Perhaps there is not sufficient space in the community for me to make a move at this time.
Have you considered the options you might have if you stay put?
Could you continue to work from your home-base if you:
- Aggressively outsourced more activities that were not your core business to contractors. Often outsourced activities can be done cheaper and better as well as save you space.
- Rented some aspects of a serviced office facility, such as a board room, secretarial support, phone answering services and telemarketing support.
- Hire meeting space shared with another compatible business. Share storage space or work space with another business.
- Hire employees who can work from their homes. There are many people who would jump at the chance to work from their own home either part-time or full-time.
- Add on to the existing home or build a shed in the backyard. Think of the benefits that you would retain.
Your cash flow forecast will tell you if, and when, you can afford to take on premises or take up one of these options. Good budgeting will give you the answers you are looking for and give you the better timing of your actions.
The biggest issue and frustration you will have is indecision.
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If your business has a created a mobile or flexible working arrangements, one way to improve could be to outsource more of your activities. You will find many businesses can keep growing with outsourcing and making use of some of the new technologies.
Bringing in an external advisor can be a huge leverage in terms of your capacity and capabilities in a home-based business. Their ideas could at least help with a transition to a retail, commercial or industrial environment if that is what you decide to do.