With the UK economy firmly bouncing back from recession, many companies are seeing renewed growth. Somewhat paradoxically, expansion can be a bit of a double-edged sword for some businesses and can present a dilemma in terms of whether to make the most of their current workspace or relocate their office to somewhere that better-suits their ever-growing needs. In this guide, we’ll take you through the pros and cons of both options and draw upon our decades’ of industry experience to offer some guidance on the scenarios where moving makes the most sense and when it’s best to stay put.
There comes a point when things come to a head for a burgeoning business in its current premises. In the majority of cases it comes down to two issues – the practicality of the space and the cost. Expanding companies often out-grow the premises they’re in, whether through taking on more staff, hosting more client meetings or having to share the space with a growing array of equipment. Cost concerns can similarly prompt thoughts about moving, whether it’s due to an influx of new work, landlords putting the rent up or with a view to downsizing to save money.
The industry a company works in can also play a role, with different sectors requiring very different uses for their workspaces. For instance, a team of web developers is likely to need a lot less meeting space than a solicitor. There’s also the potential for swift changes in the market to radically alter your company’s outlook – meaning you might need a great deal more – or less – space than you originally envisioned. So needless to say, it pays to plan ahead. With those caveats out of the way, let’s plunge into the nitty gritty and help you figure out whether it’s time to go or if you’d be better off sticking it out at your current premises.
Changing your office space obviously entails parting with some money, but there comes a point when it can actually be more cost-effective to move, especially if you’re planning for the long term. While you might’ve been able to bridge various gaps through sheer ingenuity so far, you’ve got to assess whether this strategy will be both effective and financially efficient in the long run. Often, just the exercise of reviewing your needs can prove beneficial in terms of finding shortfalls, mounting issues or inefficiencies in your current space that might negate the need for a move altogether – making refurbishment the preferable choice.
If you run a business, you’ll be all too aware that things can – and do – go wrong with logistics, regardless of the amount of planning you put in. And even if you detest your current workspace, you’re likely to have everything functioning as intended.
Cost and time over-runs can occur with practically every aspect of a move, from IT equipment to expected dilapidations costs and moving. Also, many SMEs facing their first move tend to overlook issues like:
• Removals costs
• Advisory fees
• Marketing costs (for reprinting materials with the new address, etc)
• Travel expense increases
• Employee relocation
• Recruitment and/or redundancy costs.
Transport links and access to services and amenities can be vital for staff recruitment and retention, as well as the image and general day-to-day running of a company. But a desirable postcode tends to come with a hefty price tag. Some businesses simply have to be where the action is, while in others, there may be room to compromise. There’s no silver bullet for the trade-off between location and price and you’ll need to carefully consider the advantages, drawbacks and potential risks before making a move.
The state of the market also comes into play and the availability of new premises isn’t guaranteed. If you are considering a move, it’s well worth investing in an initial consultation to gauge the prevalence and quality of space in your desired location(s).
You may have put up with an office that’s less than aesthetically pleasing, or been forced to linger in a 70s-style brutalist box office, for several years and are yearning for a chance to make your mark in your next space. And while moving will give you something of a blank canvas to work with, you shouldn’t underestimate the wonders that can be worked with a thorough refurbishment. Utilising the space properly can free up additional room, which you could use to situate a growing workforce, new equipment or even sub-let to provide a source of extra income.
However, both routes obviously entail an investment and you might have to tailor your expectations of what’s achievable within your desired budget. After all, not everyone can have Google-style breakout suites replete with music studios.
Similarly, in both cases your plans might be tempered by the constraints of your existing space or the one you’re looking to move into. You might also run into unexpected complexities that could hamper your plans or make them economically unviable. In either case, it’s crucial to get a consultant in early, before you start making grand plans.
A full-blown move will necessitate paying out migration costs, however, these can often be offset by rental incentives from your next landlord. Similarly, these fees can be mitigated by negotiating a more beneficial or flexible lease agreement at your new premises.
It’s also worth exploring the possibility of renegotiating your current deal, seeing if you can make any changes to the term of the lease, try and negotiate downwards in view of current market trends or even alter the period between rent reviews. This can be an especially good option if you can get advice from your solicitor beforehand, who may be able to advise on issues like:
• Break clauses
• How long your lease lasts
• Rent reviews
• Liability for repairs
• Rent-free settling in period
• Legal costs.