Growth is the essence of a successful business. If you operate a home-based firm, expanding your operation could mean having to move to an outside site. But how do you change venues without upsetting your bottom line?
Making the transition from your home to a commercial setting isn’t as easy as loading office furniture onto a truck and filling out a change-of-address card. It requires developing a new approach and attitude to running your business.
“It’s almost like starting over because home-based businesses and marketplace businesses are two different things,” says Rudy Lewis, president of the National Association of Home-Based Businesses.
For example, as a home-based business owner you may have no employees. After moving to a new location you may have to hire help. Whether you take on one employee or 100, your business immediately changes: you have to deal with such things as payroll, employee benefits and workers’ compensation.
Home-based entrepreneurs often think it will be business as usual when moving to an outside site, but you’ll have to make several changes. To ensure that your transition is a successful one, follow these tips:
- Factor in more money for expenses. Fixed expenses such as rent, utilities and employee salaries increase, as well as some variable costs including office supplies, equipment and advertising.
You must determine the costs of operating your business outside the home and then secure enough working capital to support those costs.
- Get rid of old home-based habits. Working outside the home will require that you reinvent yourself. Customers and employees will expect you to dress and act professionally. You will now have to adopt normal business hours. Your level of interaction among employees, customers and suppliers may also change with the move. As a result you may need to strengthen your interpersonal and management skills.
- Adopt new advertising methods. Some home-based business owners use little advertising beyond word-of-mouth. But to attract customers once you’ve moved into the actual marketplace, you may have to adopt new marketing strategies. Consider newspaper and radio ads, or if you’re short on cash, try creating flyers, brochures or eye-catching business cards.
In 1996, when Trina FortÃ©, owner of Face’N Reality, moved her designer gifts business from the basement of her Baltimore home to a retail space, she revamped her entire marketing plan. “I still told all my friends and current customers about the move, but I also did mailers, a radio announcement and held a grand re-opening to draw in more people.”
- Write a new business plan or revamp your existing one. Map out what changes you’ll have to make and then test them. For example, if you know you’ll need to bring in a few employees, if possible, hire them while you’re still home-based. This will give you the opportunity to see if you can afford and manage a staff.
“Create a model that reflects you operating outside of your home and then test that plan for at least a year,” says Lewis.
So when should you make your move? There are many signs. Space is a major indicator. But