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Don’t Forget the Hidden Costs of Commercial Relocation

By John Parkinson

Commercial relocations are almost always driven by business decisions. One company may relocate because there is simply not enough room at the current
location. Another might be relocating only a certain portion of the business in order to accommodate ongoing expansion. There are as many reasons for
relocating as there are companies doing it.

One of my jobs as a commercial property adviser is to help clients understand just what it is they are getting into with a commercial relocation. I often advise on the hidden costs of relocation that might otherwise be forgotten. These hidden costs can quickly add up, leading to problems that could eventually overwhelm the relocation budget.

Infrastructure Upgrades

Doing business in the technology age means having the necessary infrastructure to support all a company’s needs with flexibility and scalability. This suggests that a big part of relocating is making sure adequate infrastructure is in place. Where existing infrastructure is not enough, upgrades will be necessary. This can be expensive.

Paying to upgrade everything from network hardware to electrical service adds to the cost of relocating. And the more technology involved, the greater the overall bill is going to be. Companies working on limited relocation budgets would do well to focus on new locations that do not require infrastructure upgrades.

Equipment and Office Upgrades

As insignificant as it may seem, a company’s current equipment and office furniture may not work in the new space. I have worked with many clients who suddenly found themselves having to spend money to replace equipment and office furniture for that very reason. Doing so is never cheap.

Avoiding the extra expense of equipment and office upgrades dictates carefully analysing any potential new space as to how it would accommodate what the company currently owns. If a relocating company considers a new piece of property ideal even though it would not support the use of current equipment and office furniture, that company has to weigh the costs of upgrades against the benefits of utilising that space.

The Time Relocation Takes

This third hidden cost of commercial relocation is something a lot of companies simply do not consider until circumstances force it on them. As a commercial property adviser, I can tell you that most relocating companies lose at least some amount of productivity time as a result of relocating. It can be as little as a few hours or as much as a few weeks, depending on the complexity of the relocation.

Lost time is a hidden cost because it is time the relocating company is not generating revenue. As such, lost time is an indirect cost that is easy to forget about.

If your company is planning to relocate, step back and do a thorough analysis of all the costs involved. Carefully consider those costs in relation to your relocation budget. If I can be of assistance, I would be happy to bring my years of experience to bear for the benefit of your organisation.

By John Parkinson.

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