Has your business grown to a point where you’re too big for your current office space? While it’s a good problem to have, it does create a little bit of extra stress.
Between selling your existing space and buying a new one, running your business can begin to feel like an afterthought.
Practical Tips for a Painless Office Transition
You’re going to run into some issues and challenges in your transition from one office to the next. The key is to be as prepared as possible, so these impediments are speed bumps, not roadblocks.
- Understand 1031 Exchange Rules
Are you familiar with a 1031 exchange? It’s an IRS tax code that allows businesses and real estate owners to defer the capital gains taxes that would otherwise be due on the sale of property. In this situation, the revenue from the sale must immediately be put back into a property of “like kind.”
If you want to avoid paying exuberant taxes on the office you’re selling; you need to make sure that your new office meets certain criteria. Depending on the value of the property sold and the property purchased, this could save tens of thousands of dollars.
Even if you’re familiar with the 1031 exchange, it’s highly recommended that you speak to a tax specialist before making any permanent decisions. A failure to account for even the smallest detail can prove to be a very costly shortcoming. When in doubt, cover all of your bases.
- Assign a Point Person
While you, as the business owner, need to be heavily involved in the transition, be wary of putting all of your time and effort into it. You still have a business to run and don’t want to compromise the integrity of your company at the expense of finding a new piece of real estate. For best results, assign a point person to head up the transition and deliver regular reports. This will save you time and money.
The point person doesn’t necessarily have to be your secretary or assistant. It should, however, be someone who is reliable, knows the business inside and out, and is a good ambassador for your organization. When you hand off some of the responsibilities to a person you trust, everything else goes much smoother.
- Buy With Growth in Mind
One of the most challenging aspects of buying a new office space is that you have to account for growth. How big will your company be in three, five, or ten years? You have to balance those projections against your current budget and find a space that allows you to get the most return on your investment.
If you can get a property that’s big enough to house your current team while allowing you to lease out office space to another company, this often ends up being a good setup. It ensures you won’t have to move shortly, but also allows you to monetize the unused space until you need to expand into it.
- Think About the Details
Don’t just look at price, location, and room for expansion. You also need to take into account the finer details – such as whether it’ll support your culture.
“Every company culture is different. Find something that supports your culture, don’t just pick something that looks cool,” advises Kevin Eichelberger of Blue Acorn. “We’re in our fourth office in six years, and this one was designed around the way we work, configured around our agile team structure and supports the culture of our organization and our people. You might be surprised how much the wrong office can inhibit that.”
- Furniture and Office Design
Speaking of the finer details, you may be surprised to learn that things like furniture and office design can have a significant impact on productivity and morale. Your office environment is a direct reflection of what your company stands for, and you have to be careful in how you choose to include or exclude certain elements.
One issue that a lot of businesses are encountering when they switch office space is the decision of whether or not to go with an open layout, which is becoming increasingly prevalent in many companies. The belief is that open plans support a culture of transparency and collaboration, but that may not always be true. Many employees perform much better when they’re able to retreat to the quiet and focus of a secluded space. Make sure you’re aware of these nuances.
On a more surface level, things like paint and carpet colors, the presence of artwork, and greenery and natural light have a direct impact on productivity. Keep this in mind as you picture how you want to use a particular space.
“The design and outfitting of a workspace is a significant capital investment for any organization that can affect some business outcomes, including productivity, employee satisfaction, engagement, talent recruitment, and brand impact,” explains Peter Bacevice, Ph.D., director of research at a global architecture and design firm. “Given the myriad ways to design and plan a space, leaders should approach workplace design in a strategic way. Imitating the latest fads start-ups are adopting won’t necessarily get you the results your company desires; asking the right questions – and, above all, listening to employees’ answers – will.”
- Proximity to Resources
Most business owners think about location when moving offices, but it’s usually only viewed as a big-picture detail. In other words, things like property taxes and commute are taken into account. But you also need to think about proximity to vital resources.
For example, let’s say that you have a design company and work with clients who are remodeling their homes. It’ll be helpful if you’re within a short drive – or even walking distance – to suppliers and stores where you frequently meet clients to discuss materials and products. The last thing you can afford is to be 30 minutes from these places, as the opportunity cost doesn’t justify the investment.
Along with this same line of thinking, it’s a good idea to position yourself near restaurants (for grabbing a quick lunch or entertaining clients), one of your bank’s local branches, and perhaps even your child’s school or daycare. You obviously can’t account for all of these things, but the key is to position yourself in a location that’s convenient and accessible.
- Pack Smart
“The major goal in a corporate move is to be cost-efficient. One of the ways to obtain that purpose is to be time-efficient,” explains Michael Danzig of 123Movers. “The less time you spend moving, the more cost-efficient you will be for your company. To get a head start on the moving process, make sure you give yourself at least three months to prepare for your move, so when moving day arrives, the entire process flows smoothly and efficiently.”
If you’ve ever moved in the past – whether an office or a house – then you know just how important it is to be strategic with packing. It’s better to be meticulous on the front end than to end up disheveled on the back end.
The first step – which should start as soon as you know a move is imminent – is to start throwing away things you don’t need. Call the city and get permission to place dumpsters in the parking lot. Anything that won’t be moving with you should be tossed.
Once you’ve cleared out the trash, you know everything remaining has to be moved. Start by boxing up things you won’t need until the move is complete. This may include old filing cabinets, seasonal equipment, and extra office supplies.
“Before moving any technological machines, make sure you know what you are doing,” Danzig says. “Many machines need to be handled certain ways. If you are renting any of your equipment, make sure you notify your rental company before the day of the move.”
As soon as you find your new office space, you’ll want to create a floor plan of this space and start creating a color-coded packing and moving plan for all boxes, desks, and office equipment. This will allow everyone to know exactly where stuff goes on move-in day.
Feel free to come up with a more accurate plan that fits your individual needs, but this is a good place to start. The key is to take everything one step further than you think you need to.
- Don’t Ignore Your Employees
When transitioning, you have to think just as much about the people as the place. How you treat and prepare employees during a move will play a vital role in how they respond.
It may be easy to put your head down and focus on the challenges you’re facing, but don’t do so at the expense of your employees. Interact with them, answer questions, and help them feel comfortable.
Take it Slow
Running a business can be stressful. Throw in the challenge of moving to a new office, and you’ve got a lethal concoction that can leave you struggling. The key to managing a transition in the midst of running a growing business is to take things very slowly. By pacing yourself, you can avoid rushing into poor decisions and make the most out of the opportunity.