By Simon Markland
There are many reasons why you might need to relocate your startup. However, the decision should not be taken lightly. It’s essential to perform extensive research before moving any business – neglecting to do so could result in the failure of your startup. Here are some of the most common problems and potential pitfalls to look out for when relocating a company.
1. Existing Customers
If your startup is still in a fledgling stage, you might not have an existing customer base to worry about. However, if your company is well-established, you’ll need to consider the value of your current customers before you move away. If you provide an online service, you may be able to retain your customer base – but if you own a physical store, you’ll probably lose most of your existing business. Can your startup survive both a drop in sales, and the costs involved in building a new client base? If the answer is no, you should think twice about relocating.
2. Market Research
It would be fatal to relocate your startup to an area without performing extensive market research first. Is your product or service likely to be popular in your new location? Will you be able to charge the same amount? Are there any viable competitors? What works in one area won’t necessarily prove popular in another, so be sure to perform both primary and secondary market research before coming to a decision.
3. Overhead Costs
It’s important to consider the overhead costs of your startup when deciding to relocate. Rent, utilities, taxes, and transport costs can all vary hugely from region to region, and you need to be sure you can afford to pay the difference. Similarly, research the cost of living and average local salaries –if they’re significantly higher than your current location, you may need to pay your staff higher wages.
4. Staff Retention
Depending on the size of your startup, you may need to consider staffing issues when relocating. If your existing team members are indispensable, you’ll need to consult with them; they could refuse to move with the company. It’s also important to research the local talent pool in your new area, particularly if you’re hoping to expand your startup. Local universities and colleges are good staffing resources, as are other businesses.
5. Tax Implications
The tax implications of relocating your startup should never be overlooked. Generally, there are few concerns if you remain in the same country, although you should always check. However, if you’re moving to a new country, tax changes can potentially be extremely large. Always request the assistance of a professional financial expert before you make the final decision to move – many startups have been ruined by tax issues.
Relocating a business is undoubtedly a difficult decision to make, and there are many different factors to consider before you make the move. However, with the right research and planning, most startups will successfully survive relocation and will continue to thrive in their new home.